The truth is the writing is on the wall.
This is not some crazy Jetsons future that we are trying to predict. We are living in what was predicted several years ago.
We won’t be able to effectively compete in common staple foods category for much longer.
Some fun facts to consider:
- Competitors’ cost of production will be a fraction of our natural production methods.
- Competitors will have a more favourable environmental profile.
- Competitors can rapidly productise to meet ever changing needs of consumers.
- Platform business models are growing to suit individualisation of consumers.
- Hyper niche offerings that are order to suit products that fit a unique DNA or microbiome are more accessible and achievable.
So which company will be the first to get a premium such as 1000/kg?
We might have a paradigm which is hamstringing our ability to achieve the premiums necessary to keep producing the highest quality products.
We can probably agree that we are already by and large producing the highest quality products money can buy, but we are not differentiating sufficiently to garner the premiums. Another way to say that is that the consumer is largely blind to the exceptional level of checks and balances we have for quality, safety, production, health, and environmental aspects of our production.
So, what do we do about it?
Well taking a que from Airbnb, they were radical in their approach when they asked the question:
“We know what a 5 Star hotel experience looks like, well what does a 10-star hotel experience look like?”
So, in our case we know what $18.00/kg of meat looks like (*depending on sources, this reflects the higher end of pricing). We know what that experience looks like. We know what we need to deliver to achieve that price point in the market.
Well what experience do we need to deliver to achieve a 55X increase in value?
Whether we end up achieving this or not, it's hard to argue that this thought experiment is not worth the effort. How do we break the “glass ceiling” of being commodity producers and accepting the fact that we are at the bottom end of a long supply chain and therefore accept what price we are given?
There have been moves made to achieve a higher price point, but on the scale of iterative to transformational, those changes are mostly iterative and do not move the collective consciousness around what is truly possible.
When we consider food is an experience, this is the beginning of the shift in paradigm that is possibly plaguing the NZ Primary sector.
I can hear it now… “What about feeding the world?.”
As a farmer myself and an organic farmer, I am partial to ensuring that those most vulnerable on our planet have access to good quality food and for nutrition to be sustainable. An overlooked aspect of sustainability is human health, which is quite individual and unique to each person.
Let’s consider the facts again:
- Cost of production of competitors being a fraction of our cost of production.
- Competitors can offer Localised production – means cost of transport reduced (e.g. cell based meat).
- Competitors have the ability to offer customisations and order to suit products that meet personalised requirements.
- New Zealand can only produce a small amount of what is required to feed the world.
The writing is on the wall…our business model must shift.
We either become a hot bed of innovation in protein alternatives, or we shift our business model. So it is less about feeding the world and more about becoming leaders in exceptional nutrition, environmental practices and production methods and the technology that supports the long-time trusted photosynthesis production method.
So I ask again, what is the experience we’d need to deliver to warrant a 1000/kg of meat, dairy, fish, plants etc.?