Emerging primary sector leaders want deeper debate on GMOs

New Zealand's emerging agri-business leaders say affluent consumers in 2035 will pay a premium for products tailored to their needs and sold with a strong provenance story , according to KPMG's Agribusiness Agenda 2015.

The accounting firm asked a range of primary sector organisations to nominate emerging leaders and more than 50 of them – scientists, company executives, farmers, government officials and marketers – were surveyed on their priorities and the results compared to a separate poll of current leaders.

Both groups say maintaining a world-class biosecurity system is their top priority, and both ranked high-quality trade agreements and delivering clear market signals throughout the supply chain in their top five. 

But the leaders of tomorrow put a higher priority on the needs of the customer and have a stronger focus on people and communities. Both groups ranked commercial scale organic and biological production systems among their bottom five priorities.

The emerging leaders also put a higher priority on telling the "provenance stories" of New Zealand, rating it in their top view and saying it will ensure they attracted a premium price from consumers. The success of New Zealand's future food products "lies in a single, clear and cohesive primary sector brand, supported by the New Zealand story" and extending beyond dairy and meat, they say, according to the KPMG report.

Packaging should include some type of accredited symbol linked to a New Zealand primary sector brand.

Proof of authenticity will also protect New Zealand from what is seen as a growing threat from inferior, counterfeit products overseas that attempt to cash in on the country's reputation as a producer of quality foods, they say. 

By 2035, customers will demand "verification of environmental standards, product quality, animal welfare, and sustainable business practices" and there will "no longer be any room for lowest common denominator farming."

The KPMG survey shows strong support for a "transparent and meaningful debate on the use of genetic modification." 

New Zealand's primary sector doesn't have a clear strategy on genetically modified organisms and the country needs to quickly decide where it stands so agri-businesses can position themselves for the future.

Opinion is divided on whether the nation's primary sector should adopt a GMO-free strategy as part of building a clean, green image, or use the science to increase yields, stay competitive and produce products with traits consumers found desirable. 

There was some consensus that GM foods will be more widely produced in the future and that consumers will be more informed about the advantages and disadvantages, they say.

"If the New Zealand primary sector has a clear strategy on genetic modification, we could segment consumers and target those that will be more aligned to our products, genetically modified or not," they say.

KPMG New Zealand's global head of agribusiness Ian Proudfoot says that to prosper, the nation's primary sector should target the world's most affluent consumers, "delivering products that are differentiated, that markets are prepared to pay a premium for", and that complement their lifestyle and aspirations. And New Zealand should accept that it probably won't convince more than a billion Chinese people to become regular dairy consumers.

"These consumers will select components of our diet that reflect their new-found wealth and lifestyle aspirations – perhaps an occasional premium grass-fed hormone-free steak or a glass of fresh, grass-fed milk," Mr Proudfoot says. "But on a day-to-day basis they will continue to eat a diet that is an evolution of their traditional diet."

The emerging leaders came up with more recommendations for taking the primary sector into the future, including the creation of NZ Inc-owned distribution hubs that can be used by all primary sector businesses. 

They also favour a collaborative approach to distribution channels; flexible, modular processing plants to replace the big, under-used plants of today; use of emerging technologies for storage; 3D printing; drones; augmented reality; DNA sequencing; IP protection for processing technologies; and innovative use of waste.

They predicted the concept of foods as health products will be "the key food trend" in 2035, given the growth in demand for so-called functional foods perceived to have health benefits.

They also show strong support for overseas investment in New Zealand's primary sector, with appropriate controls, and called for greater investment in research and development, noting the local R&D spend in 2015 amounted to 1.26% of gross domestic product, compared to more than 2% in Australia, and more than 3% in Denmark, Finland and Sweden.

(BusinessDesk)