Philosophy isn’t a word most people would have associated with the meat industry just 10 years ago, but it’s amazing how quickly it’s changed. The industry I worked in in the 1990s is nothing like today – for processors back then it was about maximizing throughput to recoup fixed costs regardless of the cost of supply in livestock, while many farmers responded logically by looking for the best price. Marketing was more accurately called selling, and adding value was more haphazard than a carefully planned process.
Meat and Wool New Zealand had shared responsibility for representing the meat and wool industry until the wool tax was voted down by farmers in the 2009 referendum. The new name Beef and Lamb New Zealand committed to focus on the four pillars of farm, market, people and information, while the Meat Board Act (2004) determined the statutory responsibility of the Meat Board in matters of quotas, market access and management of reserves on behalf of breeders.
Efforts to merge MIA and B+LNZ into a single organization representing farmers and exporters were not unanimous, likely because there was no clear benefit to either side. As a result, the past decade has seen the respective roles of processor exporters and B+LNZ more clearly defined, while creating a much closer relationship between them.
Brand development by individual exporters in traditional markets effectively took over generic marketing such as the Lamb Rosette which allowed B+LNZ to focus on targeting new consumer segments with the original brand. Taste Pure Nature and the history of red meat. Exporters are encouraged, but not required, to join the TPN which promotes the natural qualities and high production standards of New Zealand red meat. In addition, B+LNZ is committed to helping the sector improve its environmental performance and reputation, better tell farmers’ stories and build its capacity to address biosecurity risks.
Due to the improved performance of the sector, combined with the serious global market challenges it faces, it is worth examining the strategic vision of major meat exporters to assess the likelihood of continued success for this key contributor to the economy. economy.
ANZCO CEO Peter Conley told me that New Zealand is in a privileged position with access to the most remunerative markets, so it is important to ensure that our production systems meet customer requirements and consumers who are becoming more and more demanding from an environmental, social and health point of view. For this reason, ANZCO’s intention is to pay more attention to quality and extract value from available livestock by improving nutrition, quality and taste as well as ensuring good health through health and pharmaceutical products.
This strategy will not depend on an increase in livestock volumes, but will be underpinned by value-added activities such as the recent acquisition of Moregate Biotech to complement its existing Bovogen Biologicals. Conley sees this area of expansion as a key differentiator for the business, but stresses that ANZCO’s intention is to generate future value from its existing business. Significantly, Itoham’s 100% ownership of ANZCO sharpened the direction of the business, while providing financial strength during a period of organizational restructuring.
Silver Fern Farms also underwent a major change in ownership with the major investment from Shanghai Maling to acquire 50% of the company. The shareholder farmers still hold the balance of the business, but more importantly, no longer have the burden of debt that SFF previously struggled under. CEO Simon Limmer said the Plate to Pasture philosophy remains central to the business model of meeting market needs and providing feedback to the farmer. Attribute-based products such as Net Carbon Zero Beef are seen as essential in giving farmers the information needed to produce what the market is willing to pay more for and be rewarded accordingly.
SFF’s shareholding structure creates a useful tension between the short and the long term, allowing the company to think much further into the future than it did a decade ago, as well as providing capital for investment. in critical areas like plant infrastructure and digital technology.
Following a failed attempt by then Alliance chairman Owen Poole to bring about a mega merger of the industry’s big four, the sector’s remaining co-op deliberately focused on its status as a farmer, renaming the Alliance Farmers’ Produce company. The current five-year plan states, “By keeping our farmers at the heart of every decision, we are transforming our business into a multi-category food and solutions cooperative that maximizes on-farm returns and value for our customer partners. The business strategy is, on the one hand, to maximize operational efficiency and, on the other hand, to derive more market value from the growth in protein demand through global platforms, partnerships and the development of the brand.
The other member of the big four is AFFCO, which has been a wholly owned subsidiary of privately held food company Talley’s since 2010. Publicly available information is not readily available, but it is clear that AFFCO operates a different business model from its competitors. It’s a no-frills operation with low overhead, but its strategy is to make sure it covers all the bases, spending and investing where necessary.
Unlike other companies, AFFCO keeps overseas representation to a minimum, preferring to remain nimble and flexible enough to add value wherever it sees the opportunity to add more value than cost. Because of this, he avoided a private label that would require additional labor, packaging, and marketing while creating waste.
Other meat companies – Greenlea, Progressive, UBP, Wilson Hellaby, Taylor Preston and Blue Sky – all successfully serve their carefully developed markets, but a detailed assessment of their plans and philosophies is beyond the scope or capacity of this column. My assessment of much of the meat export sector and representative farmers’ organizations indicates a much higher level of sophistication than less than 20 years ago.
Farmers can be sure that their interests are well served.
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