Domestic Marketing of the Dairy Industry.

Tracey Perkins Kellogg Report
Kellogg course 44

The Domestic Marketing of the Dairy Industry: Have We Missed A Spot? A Deeper Look Into Our Social Licence.

Executive Summary

The dairy industry is a leading contributor to the New Zealand economy, making up over 5% of GDP in seven regions and employing up to 50,000 people nationwide (Ballingall & Pambudi, 2020). In spite of this, we see increasing local interest in vegetarianism and veganism (Colmar Brunton_Better Futures Presentation, 2020) and we see increasing resistance not only to dairy farming practises themselves but also to the accompanying practises required to maintain this industry such as pest and disease control.

This causes concern for several reasons, including given that the public have access to international platforms where our international market engages (statistia.com, 2021) and if New Zealanders do not believe in our produce, then how can we effectively market to the world.

This research was conducted with the purpose of understanding more deeply the current market in which we are operating and where our social licence currently sits. The major focus of our industry appears to be a focus on telling our story, which relies entirely on the truth of that story being palatable to the New Zealand public and the assumption that rural New Zealand shares the same worldview as urban New Zealand.

Given this dilemma, I researched the meaning behind a citizen’s statement of “I support the dairy industry” and why the meaning behind that simple statement could hold some answers for our way forward as an industry. Key insights included that:

  • Supporting the dairy industry does not mean that I am connected to the industry at all myself or through family.
  • Supporting the dairy industry does not mean that I visit rural New Zealand.
  • Supporting the dairy industry does not mean that I am aware of all of the practises carried out on farm.
  • Supporting the dairy industry does not mean that I am a consumer of dairy products.
  • Supporting the dairy industry does not mean that I agree with all of the practises carried out on farm, and some I may actively oppose.
  • Supporting the dairy industry does not mean that I like dairy farmers as people.

My research also revealed that the New Zealand citizen has two distinct and separate roles in dairy farming, and both should be addressed – that of a consumer and that of a stakeholder.

Viewed in that light, competitors to the New Zealand Dairy Industry include social marketing aimed at decreasing the consumption of animal products and perceived animal cruelty, as well as the likes of specific product such as rice milk, sold from the Health Food chiller despite research showing lower nutrient content than cow’s milk.

Overall, the New Zealand dairy industry sustains the life of hundreds of thousands of babies each year through infant formula (9% of overall dairy export, $1.8B) (StatsNZ, Sense Partners, 2020), brings joy at fine dining experiences around the globe, and produce over 1500 dairy products and product formulations (Ballingall & Pambudi, 2020). We invest water and soil and return a vital food source. And yet, milk consumption per capita in our own country has decreased and alternative products are on the rise, seemingly without strong opposition from the dairy industry.

The recommendation is for industry to discuss and determine appropriate engagement methods between the public and the dairy farmer, with a view to understanding shared and opposing values as a baseline for moving the industry forward. Along with this, of key importance is research to understand the relationship between the New Zealand citizen as a consumer and as a stakeholder in the land and the extent to which one influences the other. From there research is required to determine perceived barriers to change from dairy farmers in areas where values between the public and the farmer align.

We have three primary concerns facing us as an industry; engagement to reduce the urban-rural values divide, commercial marketing to increase perception of value of our product and social marketing to ensure the sustainability of our social licence. The way forward could certainly utilize all three methods.

Future Proofing the Red Meat Processing Industry: Sustainability at the end of the Chain.

Bridget Newson McNully Kellogg Report
Kellogg 44


Executive Summary

In an evolving world, with consumers aging out of the market and new tastes and values emerging with generational change, comes the microscope over New Zealand export markets. Stemming from strong primary sectors, questions are being asked now not just of animal welfare, food safety, price and provenance but also sustainability practices. As the topic of climate emergency and consumer awareness comes to the fore, consumers now want to know not just where their food comes from, but how did it get there.

The aim of this project is to uncover positive contributions being made by meat processors operating in New Zealand’s grass-fed red meat sector, and highlight any pressures that may arise in future to really shake up the paddock to plate story-telling, to include processor to plate messaging. Often, the important processing component of that story is not told well, if at all.

In this body of work I will aim to identify how meat processors in New Zealand are harnessing their sustainability potential and responsibility, why it is important and how their social licence to operate is affected during this process. To truly understand this, I have conducted interviews with red meat industry leaders to hear their experiences and learn about what action they are taking. I have also looked at literature relating to social licence to operate, sustainability and how our actions alter our supply chain within New Zealand’s export significant, red meat sector.

The method used to complete this project was qualitative research. Structured interviews designed to get the in terviewee thinking not just about the ‘what’ and ‘how’ of their changing practices but more so, why? Why does it matter and how can it be beneficial in each facet of the business.

During my interview research, the main message was resounding. Interviewees viewed their export product as:

  • Clean and green
  • Pasture fed
  • Antibiotic free
  • Hormone free

That is how New Zealand agriculture is viewed as a global product and has been for the past 50 years! All of the above reflect the fantastic industry many generations have enjoyed and worked hard to create and maintain, ever since the first shipment of frozen lamb left Port Chalmers on the 15th February 1882. But how are New Zealand’s meat processors viewed at the end of that chain, and how to we get the words climate friendly, sustainable, sophisticated and forward thinking onto that list. There is a level of social, economic and environmental responsibility required of New Zealand red meat processors which will be covered in more detail throughout this report.

Final recommendations include:

  • Coopetition models to combat labour shortages and enhance social wellbeing.
  • Equity partnerships around topics that matter such as the image depleting bobby calf industry.
  • Further research and investment into natural gas capture and reuse as fuel, water conservation and fertiliser alternatives from meat processor by products.

Can A Northland Dairy Farm Be High Input and Remain Sustainable?

Stephen Bell Kellogg Report
Kellogg 44
Nov 2021

Executive Summary

Dairy Farming in New Zealand comes in many different forms. Every farm business has to decide what level of input is best for them to be profitable and sustainable. Historically, the primary constraint on moving to a high input system has been the financial and management ability of the farm and business operators. While this is still a significant factor, the environmental impacts of dairy farming have come under increased scrutiny.

New policies such as the National Policy Statement for Freshwater Management 2020 (NPs-FM) are designed to improve New Zealand’s freshwater quality and include a series of minimum standards for specific attributes. Regional councils must have updated freshwater plans in place by December 2024 that reflect the desired state of the region’s freshwater, with attributes being at or above the stated National Policies bottom line standards. Farms will be required to have certified Freshwater Farm Plans in place that align with the regional councils freshwater targets (Ministry For The Environment, 2020).

What do these policies mean for Northland dairy farming? And does it alter the viability of adjusting to a higher input farm system?

Analysis of financial data (2010 to 2020) in the Dairy NZ Economic Survey shows, on average, higher input systems were more profitable than medium and lower input systems with a higher operating profit/ha and higher return on dairy assets. It should be noted that while higher input systems are more profitable on average, there is a wide range of results within each system. Case studies in this report modelling high input systems highlighted this variance with a range of profitability outcomes.

Analysis of freshwater river testing in Northland comparing sample results to various standards, including bottom-line standards set out in the NPS-FW, showed that sediment in Northlands rivers is the biggest concern, along with elevated phosphorus levels resulting from sediment loss. In the majority of testing sites, nitrate and ammonia levels met the policy bottom-line standards (Stats NZ, 2020).

The implementation of Freshwater Farm Plans will result in farms putting practices in place to limit their effects on the freshwater in their catchment. If sediment and phosphorus contamination is of concern, the farm business may be required to adjust management practices, including investment in infrastructure such as standoff areas and feedpads to reduce sediment loss.

This report concluded that a Northland dairy farmer could adopt a high input system under certain circumstances. The profitability of a Northland dairy farm business is heavily influenced by the level of investment required to meet environmental standards. Increasing the system’s intensity requires a higher level of investment to meet the increasing demands of environmental regulations, potentially reducing profitability. The case studies in this report reflected this, with farms requiring a higher level of investment being at higher risk of being financially unsustainable.

Should a Northland dairy farm business choose to move to a high input system, it is recommended that they:

  • Understand the level of investment required to move to the new system and remain environmentally compliant.
  • Be aware of any further environmental impact the change will have, particularly regarding nutrient and sediment loss.
  • Understand the freshwater concerns in the catchment the farm influences and what limitations may be placed on their business.
  • Understand their current and proposed greenhouse gas emissions and factor in a potential cost to the business once the policy comes into place.

Looking into the Future Sustainability of the New Zealand Avocado Industry.

Kellogg 44
Nov 2021

Executive Summary

The aim of this report is to investigate what the future sustainability of the New Zealand avocado industry looks like. The purpose is to provide an indication to my own business on how viable my business will be in the coming years in terms of industry growth rate and growers taking on more work themselves and less contracting out.

Will this be a recurring theme or are there potentially multiple factors at play?

This will be done by looking into the current scale of avocado plantings in New Zealand, how it has changed over time and what are the future plans of the Avocado industry. It will also cover off the challenges under the Covid-19 environment and how export has been affected due to the pandemic.

The ultimate picture of what the industry’s future looks like will be determined by the demand for New Zealand avocados and if there is still a viable overseas market. What the current market trends are and what direction they are going in and will New Zealand hold up against overseas competitors.

We will delve into the overseas markets and create an understanding of how New Zealand avocado supply holds up against them. If we can understand what the present situation is and the reasons that have shaped the avocado industry into what it is today, we can understand the direction, structure and psyche of the sector.

Once this investigation has been undertaken, our findings can be used to discuss our perceived future of the avocado sector.

The main findings include:

  • A 3-fold increase in the current production of fruit for upcoming years due to the rapid rate of new plantings.
  • The costs associated with getting fruit to market are rising
  • In New Zealand we struggle to compete on quality, logistics, shipping cost, reliability, and industry resources required to promote and expand our markets and market-share.

My recommendations as an outcome of this report are:

We should invest more time into seeking alternative markets, other than our closest neighbour, to export our premium fruit too.
The rapid rate of plantings will cause the fruit return to plummet unless we implement a restricted planting rate to ensure the market stays competitive and keeps new and old growers with a plausible return.

Industry bodies need to work together as one cohesive group to support growers, positively promote the industry and provide solutions to the common challenges.

Due to our little natural advantage of growing avocados in NZ, our focus to generate new consumer markets should move to organic production, carbon zero and further play on the clean, green, safe food aspects.

Land Use Change Diversification in Northland.

Rachel Weal Kellogg Report
Kellogg 44
Nov 2021

Executive Summary

Whenua (land) is valuable. It is a place for us to live, to make a living and to grow food and materials we need for ourselves and export. Across New Zealand, huge variations in landforms, soil, and climate influence how land across the country can best be utilised and managed (Ministry for the Environment, 2021).

The state of our land today is a legacy of the ways previous generations used it. Some former land uses limit how we can use it today. In the same way, our choices about land today can be irreversible and will affect future generations and the potential production and profitability of our industry.

The Northland Region of New Zealand is a vital province for agriculture, horticulture, and forestry and, with its subtropical climate and mixed topography, offers a key competitive advantage.

A range of factors can drive land-use change, all of which tend to interact and influence each other and can be generally categorised into the following areas:

  • Biophysical Factors
  • Economic Factors
  • Societal Factors
  • Regulatory Factors
  • Environmental Factors

These five factors are all interrelated. They are all equal in importance and in most cases, an aggregation of drivers will need consideration. An individual’s risk appetite, as well as any future succession plans, will also influence these decisions.

A person or entity’s drivers for change will be unique and must be treated as such. They could include:

  • Looking to make a change to either reduce risk or maximise financial return (economically driven)
  • Seeking an enterprise or activity that is more aligned to them personally (interest- driven)
  • To improve the environmental impact (environmentally/regulatory driven)

Good land-use decisions depend on being well informed and understanding the trade-offs between profitability, physical land characteristics and environmental sustainability. To achieve all aspects, a mosaic approach to land uses may be required across the rural landscape in Northland. Many land uses can complement each other, helping to:

  • Spread financial risk by diversifying investment
  • Reducing environmental impact
  • Improve the overall sustainability of the farm
  • Creating succession options

There are three main aspects of land-use change and diversification identified in the Northland Region that are prominent today. I believe these factors will also be of most significant consideration moving forward into the future. The three main aspects are environmental considerations (primarily availability of water and the use of forestry to reduce our impact on climate change and emissions), economic considerations (profitability and access to capital), and regulatory considerations (subdivision of rural land). Four examples have been given based on these factors.

From the research completed in this report and my professional experience, I make the following recommendations:

  • I suggest further analysis and information on current land use is required to ascertain what enterprises are covering what land areas in Northland. Similarly, information on soil types is difficult to obtain and is generally high level. Statistics are primarily restricted and usually well out of date. Information at a district or regional level could assist in future land-use decision making.
  • I suggest further investigation and research into different land uses, specifically for the Northland region, including new crops or subtropical varieties. We need to share our knowledge and experiences so others can make informed decisions regarding land use diversification.
  • I propose the availability of specialist consultants who can be accessed easily by farmers to assist landowners in uncovering potential land-use change options and what would best suit them as people, their land, and the viability. Having previous case study examples would assist with this.
  • I advocate that water storage investment for the Northland region remains a priority, and I recommend the proposed water storage sites continue to go ahead, as well as an investigation into other potential future sites.
  • I suggest local councils continue to plan urban development and weigh up the requirement of residential housing versus products produced from highly productive agricultural land.

Heat Pump Pollen Drying.

Nicholas Woolsey Kellogg Report
Kellogg 44
Nov 2021

Executive Summary

The project described in this report formed part of the Kellogg Rural Leadership Programme. It investigated the use of a heat pump in kiwifruit pollen drying in order to reduce energy use.

The author worked with a pollen producer to establish limitations in the existing conventional system, before researching and developing a concept that utilised heat pump technology.

Initial findings suggested such a system presents significant financial and environmental advantages that may be exploited by individual producers and industry bodies alike.

The recommendations were to:

1. Build a prototype pollen dryer using a Temperzone packaged water-cooled unit coupled with a reheat coil as per concept design.

2. Use the above prototype phase to gather more data, particularly around water volume requirements and heat transfer.

3. Investigate other potential sources of supplementary heat to provide further efficiencies.

Labour shortage – The role of technology led innovation in the kiwifruit industry.

Munazza Saeed Kellogg Report
Kellogg 44
Nov 2021

Executive Summary

Kiwifruit represents 32% of New Zealand’s total horticultural export revenue. Kiwifruit growers and the wider industry works hard to make sure consumers across the world can enjoy fresh, healthy kiwifruit; however labour shortage could easily put high kiwifruit returns into jeopardy. If industry doesn’t pick and pack kiwifruit on time it can result in substantial fruit loss in terms of quality and revenue.

The current and predicted labour shortage is already having a significant impact on the horticultural sector including the kiwifruit industry. Projected growth in kiwifruit sales is predicted to reach 190 million trays by 2027. However, with the record-breaking volume increase every year, the tsunami of kiwifruit may arrive earlier than 2027. An additional 8,000 seasonal workers will be required if projected growth targets are to be achieved successfully, in addition to 23,000 seasonal workers in peak season (2021 data). Hence the extent of the labour shortages is critical for the kiwifruit industry.

The aim of this study was to investigate the extent of the labour shortage in the kiwifruit industry especially within postharvest, and how technology led innovation can help to ease the burden of the shortage in labour.

The physical, inconsistent/seasonal nature of the job plus lack of training and work culture, tighter immigration laws and COVID-19 are among the main factors hindering the industry from attracting and retaining people year on year. In most of the interviews, lack of change management, work culture, effective communication and leadership were raised as major barriers in technology-led solution of labour shortage.

Kiwifruit, along with the other horticultural industries needs certainty of labour supply. Key recommendations from this project are discussed here. One way kiwifruit industry can attract labour is by supporting employment staggered year-round or fixed contract with flexibility to provide job security. Improving work culture, where everyone is treated fairly, will help to build industry reputation and would encourage everyone to work and stay.

To empower and attract young locals, the kiwifruit sector needs to incorporate innovation, sponsor apprenticeships, change marketing strategies, provide accommodation, and travel facilities for seasonal workers. Universities and Polytechnic institutes need to encourage students to gain horticulture knowledge to produce a future workforce for the kiwifruit industry.

Even if all the unemployed in NZ would work, industry would still need more seasonal workers. What should industry be focusing on, to resolve long term labour issues? Industry needs to be creative and look for innovative solutions to ease the labour shortage issue.

Technology adoption could serve two major benefits to the industry: first easing the pressure on manual labour jobs, and secondly generating technical jobs for young kiwis. This new job market will call for skilled people to build, service and maintain technologies. To successfully introduce and implement innovation in the industry, employers need to follow a change management process. Industry needs to make sure that contractors follow compliance requirements and keep investing in fit- for -purpose innovation to improve supply chain efficiency.

All stakeholders need to understand that continued small and large operational improvements and enhancements will move the industry toward efficient and reduced labour efforts. A dedicated investment in technology innovation and a collective effort for adoption needs to be supported by Zespri, postharvest facilities, Government, and the private sector to improve performance and brace for future challenges.

Permaculture-design and the implementation of regenerative agriculture principles.

Michael Green Kellogg Report
Kellogg 44
Nov 2021

How can permaculture-design inform the implementation of regenerative agriculture principles to address global macro-challenges while creating better outcomes for pastoral farming in New Zealand?

Executive Summary

World agriculture is dependent on and supported by cheap and readily available fossil fuels which have led to huge increases in global population, consumption, and economic prosperity.

Unfortunately, this has created undesirable side effects such as resource depletion and environmental degradation, and we may now be reaching the planet’s bio-physical limits. Renewables are unlikely to fill the energy void left by declining fossil fuels and agricultural systems need to adapt to face the threats posed by declining net energy, environmental effects, and approaching bio-physical limits.

Regenerative agriculture is gaining momentum as a profitable low-input farming system that addresses the current threats by treating the farm as an ecosystem, by delivering benefits to soil health, biodiversity, and plant animal health while reducing the impact on the climate and the environment.

When integrated with permaculture principles and implemented through a design process at farm scale, regenerative agriculture can provide better economic, environmental, and social outcomes to pastoral farmers when specific site and operational context is considered.

This report makes recommendations including that farmers better understand permaculture, and regenerative agriculture principles and the suggested design process to implement them at farm scale and that farmers create a 100-year plan for their farm based on these principles that considers economic, environmental, and social outcomes including well-being.

Farming Whenua Māori in Tai Tokerau: Pathways to Success.

Mihi Harris Kellogg Report
Kellogg 44
Nov 2021

Executive Summary

Legacy responses to improving unproductive land-based assets have failed Māori resulting in only a few high-performing Māori owned land blocks in Tai Tokerau. As such, when engaging in the primary sector, many Māori landowners – Incorporations and Trusts – are often starting from a zero-base or worse.

This is particularly the case in the rural community of Waima, Hokianga. Well known constraints to development of whenua Māori include legislative obligations and regulations, under-investment, limited access to finance and opportunities, lack of capability and sometimes fraught relationships.

Emerging research is beginning to identify learnings and insights of Māori landowners who have successfully overcome one or many of these constraints to grow high-performing farming operations that thrive both commercially and culturally.

This project is concerned with understanding the learnings and insights specific to Tai Tokerau and how they can inform enduring, sustainable agricultural production systems to unlock opportunities for future generations in Waima.

This report is based on a series of conversations, meetings and a literature review of select sources comprising primary and secondary sources to identify relevant and current content, themes and a brief case study of the Waima Topu B Ahuwhenua Trust.

The report concludes with findings and recommends that are fit for the Tai Tokerau context that encourages collaboration as stepping stone to collectivisation supported by a high-level business case that sets out a pathway for investment.

The purpose is to grow high-performing Māori farms in Tai Tokerau through investment in infrastructure and capability including governance and skills and training; establish and strengthen the relationship between Māori farmers, Crown-owned farms and investors that, in time, allows multiple farms to come together to work collectively to add value to, and de-risk, the value chain from farm gate to whare.

Is there a future for strong wool?

Mary Bartlett Kellogg Report
Kellogg 44
Nov 2021

Executive Summary

The purpose of this report is for the reader to gain understanding of the strong wool industry as well as find some guidelines that could work for the future of the industry. To do this there is an overview of the history of the industry, following this an overview of what is currently happening in the industry and finally some thought on what needs to occur in the future to creat a booming industry again.

The main goal for this report is to raise awareness for consumers to make the environmentally friendly decision to buy wool and encourage the industry as a whole to stand together, to pull the wool market out of the doldrums and put it back into the flourishing fibre position it deserves to be.

There has been a lot of research into the history as well as the present to gain a broad knowledge of the industry as a whole. In-depth research of what organisations are doing and have done in the past, what factors have impacted the strong wool industry and how the strong wool industry sits within the market. The future component of this report is made up of thoughts of industry leaders and the writers perceived opinions on what the wool industry and eco-friendly consumers need to do to change the future of wool back into its rightfully thriving state.

From this report I hope to encourage innovators to create new markets for strong wool and to get producers and government to invest into wool research and development. Consumers, retailers, producers and industry organisations will need to learn to understand what the needs are and what opportunities are available to increase the demand for the super fibre that is wool.

For the future to be positive for the industry, there needs to be innovation, investment, and collaboration. The industry needs to combine to become a team who work together, who invest within the industry, from the woolshed up, to increase the quality and research and development for the sector and to keep an open mind for innovation within the industry.

To help create a thriving strong wool industry again we need:

Producers to:

  • Produce high quality wool
  • Employ proper practice in the wool preparation
  • Always look for new and different markets and opportunities
  • Educate the market of the benefits of using wool in every way we can, so the consumer can make informed, eco-friendly and sustainable choices.

Consumers to:

  • Encourage the industry
  • Value the product.

And most importantly we all need to:

  • Buy New Zealand Strong Wool products.