Feeding the dragon.

Executive Summary

The emergence of China as the largest consumer of food and beverage products has been a significant global mega-trend, one which has far reaching implications around the globe and in the international food and beverage industry. These developments will have a significant impact on food and beverage exporting countries, such as New Zealand, and will present opportunities for exporting firms to increase the value of their production.

This report investigates the Critical Success Factors of global firms which have achieved success in the China marketplace, and compares them against three of New Zealand’s food and beverage industries which have exports destined for China. The three industries include the Dairy, Red Meat, and Kiwifruit industries, which are important contributors to New Zealand’s total exports and have a significant proportion of their exports destined for China.

The Critical Success Factors chosen are characteristics, conditions, or variables of effective export marketing strategies, being; Understanding of the market, Selling and distribution channels, Promotion of a brand, and Collaboration.

Using these Critical Success Factors, this report compares the habits, trends and practices of recommended practice firms against three of New Zealand’s food and beverage industries. The report found that across the three New Zealand industries there are vast differences in approach amongst individual firms but also across each industry. The results of each industry could be linked back to the structure of the industry, as well as the culture of the industry. Of the three New Zealand industries, the Dairy industry was found to have the strongest coverage over all four Critical Success Factors, and also displays characteristics most in line with the recommended practice firms. There are factors in this industry which lead towards this, such as the industry being dominated by one large firm which has the resources, scale, and experience to lead the industry.

The Red Meat industry has traditionally been characterised by strong competition and barriers to collaboration within the industry, and this factor was quite evident during the discussions with firms in this industry. Though there are four large firms and a number of smaller firms in the industry which are selling similar products to the same markets, there is a lack of cohesion, industry collaboration and resource sharing, and an inability for branding due to each firm being unable to differentiate from another.

The Kiwifruit industry stood out as displaying strong habits in promotion of a brand and understanding of the market, which has been a result of the industry investing significantly in these two areas and having a focused approach of one product, one brand. This focus is further strengthened due to the structure of the industry being a single desk operator, which allows one firm to be responsible for all marketing, selling and distribution of product, and also allows it to gain scale benefits which are also similar to Dairy.

This report finds that three of New Zealand’s food and beverage industries involved in this research have shown habits which are consistent with international firms which achieved sustained success in China. Each of the three industries have areas to continue to develop across the Critical Success Factors of effective export marketing strategies to ensure they are cementing themselves in the China food and beverage supply chain, and in order to maximise the opportunities presented by the emergence of China as a consumer of sophisticated food and beverage products.

Feeding the Dragon – Jason Te Brake

The social impact of converting traditional agricultural land into horticultural land within my Iwi.

Executive Summary

My Iwi – Ngati Pahauwera.

Ngati Pahauwera is a confederation of clans centred on the Mohaka River in northern Hawke’s Bay. The tribe did not sign the Treaty of Waitangi, Chief Paora Rerepu sold large areas of tribal land to participate in the new economy, and supported the colonial government against anti-government Pai Marire (Hauhau) and Te Kooti fighters.

To be from Ngati Pahauwera is an honour that we all hold proudly. We are quick to advise strangers of our lineage to the region in order to take the front foot in Korero. Descendants of Pahauwera are global but we still have a common connection to our home through our whakapapa.

At the heart of Pahauwera are the Māori settlements of Raupunga and Mohaka. Mohaka being close to the Mouth of the mighty Mohaka River and Raupunga situated 20 minutes upriver, close to the Mohak a viaduct, the Tallest Railway Viaduct in Australasia.

In conversations with Pahauwera Leaders I have been told of the good old days when there were jobs for everyone. You were either a Farmer, Shearer, Ganger on the Railways, Driver for the Ministry of Works, Forestry Worker or you drove the short distance to Wairoa and worked at the Freezing works.

Most of the Jobs were hard labour intensive ones, jobs where you knew that you had done a hard day’s work, jobs that young Maori thrived at. Today those jobs seemed to have been scaled back or restructured in preparation to sell off to the highest bidder and this has come at a cost to our people.

Within the Raupunga and Mohaka area I remember growing up with a Fish n Chip Shop, Movie Theatre, 2 stores, a Post Office , a Police Station and a Pub, today we have none of these. The Urbanisation of our People has left the a reaunrecognisable. Most of people moved to either Napier/Hastings or Wairoa in search of employment or following family.

Today we have 180 house holds in the Pahauwera Catchment (Est under 1000 people), the average household income is $17,500 p.a. The Average household income for those of Pahauwera living outside of Pahauwera is $23,000 p.a

Unemployment or Low income jobs seem to be systematic for our people both within the iwi and those that have moved to the towns. Somewhere along the line some Maori as a race have lost their way. We are now seeing generations of unemployed families, Generations of unskilled labourers, Generations of families stricken with Health issues, generations of child poverty, violence and gang culture. Pahauwera is not immune to this trend and in some areas we would rank highly.

“One of the major causes of child poverty is the relative lack of jobs for parents who have limited educational qualifications, skills or work experience ” (Working Paper no 12: Expert advisory group on solutions to child poverty, pg 2, pt 9)

For me the root of some, if not most of these issues is education and employment. The Ngati Pahauwera Development Trust have a vision to increase the household income by 50%. On current figures this will take the range from $35,000 for those residing in the Iwi and $46,000 for those that are living outside the area.

“According to Statistics New Zealand, the Average household income for New Zealand rose by 11.8% to $84,462”

To do this we need to create jobs within the Iwi, jobs that have a career path and offer opportunity to upskill and personal development in an effort to breaking the cycle that I believe we are currently in.

Amidst all this doom gloom about how we are not succeeding as a people, we do have a strong heart, we are passionate about our Turangawaewae and we do have some highly motivated members of the community that have a vision for self-sufficiency for our people, and I am one of those!

The Purpose of this report is to focus on what the Social effect of having high density employment, like Horticulture will bring to the region.

This report will give you a back story to Ngati Pahauwera, before we go forward we need to know where we come from to understand why some things are how they are.

This report is not a bout how I plan to introduce a Multi-Million dollar Horticultural industry into Ngati Pahauwera, giving full time employment for up to 100 people, 10 months part time employment for approximately 50 people and seasonal employment for up to 300 people at its peak, this report is more about ‘why’ do we need to do it and not the ‘How’. We need to “decentralise “ our people back to their homelands, But bring them back to what? What will the Social impact be on a community who currently have an average household income that is insufficient for the needs of a modern family in New Zealand.

It is obvious that land planted with Horticultural crops (In particular Fruit trees) requires more FTE’s (Full time Employees) than a traditional Farm will and this is the basis for this report.

The Social Impact Of Converting Traditional Agricultural Land Into Horticultural Land within my Iwi. – Tom Keefe

Future challenges and opportunities for hill country farming on the East Coast.

Author: Sam Lang, K32

January 2015

Hill country farming on the East Coast of the North Island is becoming increasingly exposed to global and national economic, social, environmental and regulatory trends and pressure is building towards significant change from the status quo. So what will hill country farming on the East Coast of the North Island look like in 2050 and what are the challenges and opportunities hill country farmers and communities will face between then and now?

This research sought answers to those questions by asking the opinion of thought – leaders involved in roles that support the East Coast hill country. The results paint a picture of a complex, dynamic, connected and increasingly changing hill country environment where the future challenges appear daunting but the opportunities present a strong case for optimism. Overcoming these challenges and seizing the opportunities will require significant adaptation by hill country farmers and changes in land use and farm practices are inevitable.

Key to successfully navigating this change will be changing mindsets and attitudes towards change, improving governance and developing leadership capacities among rural communities; challenging yet necessary steps to positive change. Leveraging the story of hill country farming could protect demand for its produce and possibly add value, however this story needs to be backed with credible and trusted assurances around the safety, integrity and responsibility of hill country food production. Hill country farmers should strive to excel in this regard in order to maintain our current point of difference with most international competitors.

Achieving this across the East Coast hill country will require much higher levels of knowledge sharing and cooperation between farmers and other farmers, rural service providers, rural communities, businesses, industry bodies and policy makers. Supporting institutions should invest in developing approaches to achieve this and ensure close attention is paid to the diversity of people, place, needs and motivations that exist throughout the hill country.

This report concludes with three broad recommendations for actions that could be taken to support a healthy and vibrant future for the East Coast hill country. They are:

  • Develop a holistic understanding of the macro-context within which hill country farming operates, including expected trends and changes in the long-term. Use this understanding to create a broad vision and direction for hill country farming that;
    • Promotes open-mindedness, systems thinking, and long term decision making; and
    • Strives towards ambitious goal s for food safety, integrity, resource sustainability and ethics
  • Broaden and improve the measures we rely on to inform on-farm, local, regional and industry level decisions, including aspects that will be important to consumers and society long term, and m ore nuanced aspects of our farming systems.
  • Engage, support and empower farmers and rural communities to share knowledge, ideas and co-create solutions that are appropriate in terms of scale and time frame.

Farmers need to be making smart, holistic, long-term decisions about the land uses and practices they employ, among other things. These recommendations may go some way to supporting farmers to make decisions with the best possible understanding of their context, in order to give hill country farming its best chance for the future.

Lang Sam, Future challenges and opportunities for hill country farming on the East Coast

Understanding the perspective of New Zealand sheep and beef farmers: Effects on the market orientation and farm performance in the read meat industry

Executive Summary

With debate surrounding the structure and strategy of the New Zealand red meat industry, the time is right to explore constructs around the market orientation and performance of New Zealand sheep and beef farmers. Market orientation was determined by studying customer orientation, competitor orientation and inter-functional coordination. These factors were considered alongside cooperative membership, level of education attained and ownership of sheep through the marketing channel.

Results indicate that there are some very moderate differences between cooperative and non-cooperative members, though there was no statistical difference between various levels of education attained and ownership of sheep through the marketing channel using principal components analysis, MANOVA and discriminant function analysis.

Redundancy analysis was used to analyse the variability in market orientation in relation to ten variables being price, production, quality, relationships, planning, innovation, learning entrepreneurship, trust and commitment. Planning, performance and relationships were the most powerful variables. The theoretical framework and model was applied to a usable sample of 131 sheep and beef farmers from all regions of New Zealand and is a study which is a preliminary step to gain insights for more in-depth empirical research in the near future.

Understanding the perspective of New Zealand Sheep and Beef farmers – Ange McFetridge

The Role of Lamb Producer Groups in the NZ Industry.

Executive Summary

This report was undertaken to provide a greater understanding of the positive role lamb producer groups have in the New Zealand sheep meat industry, due to the repeated negative comments about the industry and its performance publically and in the media.

The majority of research used in the report was completed by qualitative interviews with all key stakeholders of a producer group, in this case the Waitrose Lamb Producer Group which involves a UK retailer, a processor and farmer suppliers from New Zealand.

The customer, processor and farmers were interviewed to reveal their views on strengths, weaknesses, opportunities and threats of being involved with a lamb producer group.

As a result of the valuable discussions that were had with each link of the value chain, this study has identified a number of key factors which determine the current strengths of a lamb producer group and the opportunities that are going to enable the producer group to meet future demands of the consumer.

The key strengths were identified as below:

  • Transparency of information shared throughout the supply chain.
  • Relationships throughout the producer group – It brings openness, frankness, trust and collaboration.
  • Linking the farmer directly to the market provides valuable market intelligence and understanding of the customer and their expectations.
  • Data gathering, sharing and benchmarking drives continuous performance from the farmers.
  • There is certainty of supply for both the customer and processor at least 12 months in advance.

The key opportunities were identified as below:

  • Further utilise existing research data to help improve on.
  • Farm performance through efficient production and cost savings.
  • Benchmark more vigorously within the group.
  • Reduce wastage throughout the supply chain to unlock additional margin.
  • Better utilise producer group lambs for the existing programme or other key customers that have the same consumer requirements.
  • Stay ahead by being involved with research & development projects that differentiate the processor by creating a point of difference.
  • Provide more transparency of margin within the group to build more confidence and trust from all stakeholders.
  • Develop longer term price contracts for the farmer.

The producer group model enables the value chain to better handle the peaks and troughs during the season, which in turn helps to reduce volatility in the schedule pricing. The farmer and processor need to be satisfied with their margins and this must continue to be shared on a fair basis. The customer will continually pay a premium if the farmers and the processor can consistently produce safe, high quality product that complies with the specific requirements including strict farm assurance and animal welfare standards.

Developing more lamb producer groups is not the only solution; however they go a long way in helping to improve the current stat e of the NZ sheep meat industry through collaboration and vertical alignment.

In summary, lamb producer groups in the New Zealand sheep meat industry have a role for the future development of value creation to increase not only overall returns, but most importantly profitability and stability for the farmers and processors.

The Role of Lamb Producer Groups in the NZ Industry – Landon Jones

Proof of Concept: Farm Genetic Plan for Commercial Enterprise.

Executive Summary

The New Zealand government wishes to double exports by 2025. To do this they wish to increase exports from agricultural sectors to $64 billion. To help, the government has invested in Primary Growth Partnership Programmes to advance science and farm system changes. This includes improving farm management systems.

The genetic and genomic potential in the New Zealand red meat sector industries are vast and often untapped by the commercial farmer. Two key issues overlooked by the industry are;

  1. Understanding and utilisation of breeding values by the commercial farmer is limited, and
  2. The ability to benchmark own key production indicators against the genetic potential of sires is lacking in farm management systems.

Here a farm genetic plan for commercial enterprise is explained and tested on three commercial farmers. The model aims to quantify the genetic merit of the commercial flock, align the genetic merit of the flock with key performance indicators, and identify and evaluate options for improvements and/or changes within the commercial operation.

Ram team/purchases and ewe population structure was combined with Sheep Breeding Limited breeding value data to estimate genetic merit of rams, ewes and lambs within a commercial flock. Estimates of genetic merit of key traits; weaning weight (WWT), carcass weight (CWT), number of lambs born (NLB) and survival (SUR) were reported. Performance data from the commercial flock was used to calculate production statistics for reproduction (lambs tailed per ewe mated and survival from pregnancy scanning to tailing) and growth (to weaning and slaughter). Production statistics were compared against the estimates of genetic merit; tailing percent with NLB, survival with SUR, growth to weaning with WWT and growth to slaughter with CWT.

Meetings were set up with each farmer to discuss the model, clarify inputs and explain results. Feedback was sought on the model, gathering of data, result presentations and overall thoughts. The idea of a “genetic plan for commercial enterprise” was well received. All farmers were enthusiastic about the whole process. Gathering of historical data was difficult and not complete for all farms. None of the farmers knew actual ram teams used, information had to be sourced from the breeding company involved. This proved to be one limitation of the model, however, all farmers were happy with assumptions used to fill in gaps.

The main recommendation suggested by all three farmers was, that for first time users a consultant or qualified person should be used. Interpretations of the results varied and incorrect generalisations were made that could be corrected by the consultant before any decisions are made by the farmer. Overall, all t farmers enjoyed and benefited from the exercise, with a willingness to perform the exercise again the next year.

The next steps of this project are to refine the model and develop it into an online programme/application for use by consultants, breeders and commercial farmers. Finally, there is the potential to modify and extend this model to the deer and beef cattle industries.

Proof of Concept: Farm Genetic Plan for Commercial Enterprise – Natalie Pickering

The Thermo Kennel: Invest in your hard working friends

Kellogg Programme 30

Business model overview:

The Thermo Kennel” has been designed to keep dogs warmer in winter and cooler

in summer. I launched ‘The Thermo Kennel’ in the  Grass Roots Innovation  Section at Mystery Creek Fielday 2014. From the Fieldays I  took away the grass roots runner  up award, market  validation,  list of 100 potential customers,  concept proofing and market publication.

Core competitive advantage:

The Thermo Kennel captures and retains the dogs body heat through quality insulated walls, floor and door. Through insulation the dog  is  kept  up  to  15 degrees warmer on a winter’s night and cooler  in  the  summer.  For additional money the buyer can choose to purchase the kennel with a collapsible and light weight run that allows the dog freedom of movement.

Mission Statement:

Providing thermally efficient and durable dog kennels to the world.

Access the full report here –

The Thermo Kennel: Invest in your hard working friends

The South Island Kiwifruit Market: Should we Cooperate.

Executive Summary

There are three main factors influencing Kiwifruit Growers profitability, productive yield, cost of production and the return they receive for the crop they produce.

When a kiwifruit crop is put through a packhouse, it is separated by size and quality into four grades. Class 1 and 2 are usually exported, class 3 is usually sold on the New Zealand domestic market, and class 4 is usually sent for processing or used as stock feed.

The major factor influencing a kiwifruit growers total return is the return they receive for the fruit that is exported (normally 85 – 98%). But the return from class 3 fruit sold on the New Zealand domestic market also has an important impact on a growers total return, and hence overall orchard profitability.

The purpose of this report is to look at the South Island domestic kiwifruit market, and consider if there is a potential benefit to South Island kiwifruit growers from cooperating in their sales and marketing efforts.

The South Island Kiwifruit Market: Should we Cooperate? – Paul Thomas

Farmers and social media: Communication, connection, community.

Executive Summary

Instinctively as human beings we want to communicate. When children fail to speak their first word on time at the designated age, modern parents rapidly seek a medical and scientific reason for this failing in their offspring. Sometimes not reaching milestones is a good indicator of something not being well with the child and sometimes the child is just doing things in his own time. The alarm it brings to the adults in the child’s world indicates the importance of communication. Communicating connects us to first to the community of our family and so on as we grow and become independent, ideally expanding our community and communities as we grow.

Social media in this age of technology is our voice. The voice of a person who isn’t always sure they have something of worth to say but is pretty sure there are others out there in the cyber world who are of a similar mind, stage, experience in life. Social media starts out as a communication, a word, a post, a static statement that invites comment, responses and connection. Connection is a discussion, ongoing comments, a shared and retweeted statement, photos and stories becoming a community. Community, online is a fluid group of strangers and friends that welcome and regulates each other and guests, that fluctuates in numbers at any given time, that dies a natural death only to be resurrected by a new comment from a passerby.

When our physical community isn’t enough, our social media communities fill the gap; add value and validity to our efforts and our days, giving us knowledge and education, friends and sometimes even family.

“Facebook wants to populate the wilderness, tame the howling mob and turn the lonely, antisocial world of random chance into a friendly world, a serendipitous world” (Grossman)

The philosopher Descartes is best known for teaching the Latin saying “I think, therefore I am” as a tagline for explaining that we exist when we think for ourselves, test information given us and understand that most information that comes our way is an opinion. However in our modern time the saying could be rewritten as “I communicate, therefore I am” maybe reversing or embracing the very point Descartes was making.

Farmers and Social Media: Communication, Connection, Community – Sarah Russell

What’s wrong with the 50/50 sharemilking contract.

Executive Summary

Something seems wrong with the 50/50 contract because it is in decline. Sharemilking in New Zealand has been the main stepping stone up the Dairy Industry career pathway into farm ownership since the early 1900s. It has been a way of learning skills and at the same time building valuable equity for a dairy farmer to make that transition from stock ownership into farm ownership. Sharemilkers have been the muscle of the dairy industry working directly at the coalface to achieve long term farm ownership gratification from determined years of hard work and sacrifice. Many Farm Owners can attribute their financial success to the Sharemilking pathway. That pathway has now narrowed with declining 50/50 Sharemilking Contracts on offer. Farm workers are losing the only true opportunity to achieve dairy farm ownership. These are changing times in the dairy industry and so career pathways must also change. This report looks at the 50:50 Herd owning Sharemilker and asks why is the 50/50 Contract in decline and what is wrong with it?

What’s wrong with the 50/50 Sharemilking Contract! – Matthew Pepper