Productisation as a Core Capability for Agri Food Processors of the Future

How do we continue to grow economic outcomes, reduce environmental impacts, and improve social outcomes in the Agri-food sector?

Melissa Baer
Melissa Baer
May 19, 2021
Productisation as a Core Capability for Agri Food Processors of the Future

How do we continue to grow economic outcomes, reduce environmental impacts, and improve social outcomes in the Agri-food sector?  

We cannot continuously expect that we can extract more four-legged creatures, more tonnes, more kilograms, more crates etc. from the land. We need to figure out how to do more with less. In fact, we need to make “less” the point of difference.  

How do we go about achieving growth, but having less impact and extracting less from the land? Well it is already starting to happen. Let’s look at the early doubling trends about what consumers are demanding and the pace at which new products with never before seen value propositions are hitting mainstream status. We can also look at signals things that are not yet mainstream but happening all over the world right now that we need to pay attention to.

The phenomenon “Productisation” is happening increasingly in New Zealand and all over the world.  

It was only a few years ago that we had red meat, bovine, sheep, and venison. Now we have organic varieties, geographic region value propositions for these, antibiotic free varieties for all of these, as well as the genetics and physical characteristic claims for all these varieties. Examples include: a CarbonZero Butter recently launched by Fonterra (a prominent dairy company in NZ), a Carbon Clean wool product being produced in Hawea, New Zealand, and ZQ accreditation from the New Zealand Merino Company, who have long been the leader in environmentally and ethically responsible wool.  

When you take these New Zealand examples in combination with global examples of artisan products with regenerative claims, high micronutrient density claims, genetic claims, geographic (Terroir) claims from all over the world, we start to see a doubling trend occur. These are signals.  

What we know to be true about humans is that we continue to create and will always create, as referenced in the ‘History of Money'. We have more SKU’s (product codes) than we have ever had before, and these SKU’s have taken an exponential curve. A fitting example we have come across recently is the 700 milk products listed in Countdown grocery stores in New Zealand. At one point in history, we had only one type of milk, and it is since grown from 1 to 700. This has taken some time of course, but we are hitting the point where this doubling trend is so disruptive and food producing companies need to pay attention and build the capability to produce products that meet customer needs/desires/demands quickly and efficiently.  

Consumer desires/ preferences – doubling trends

Consumer desires is the other disruptive doubling trend currently happening. We now have an “individualisation of everything”. We need to be able to deliver on these expectations and construct business models that comply with this consumer mindset.  

Consumer desires and preferences, much like products (no surprises there) are doubling. What was once a weekly shop, where everyone in one household ate the same food at the same time is now no longer true. For each household to have a least 2 different dietary or nutritional requirements to cater to is not uncommon. Think of a child with gluten free requirements and a peanut allergy, or a mother with keto requirements with a teenager trying veganism. This is the state of consumerism right now, this is not the future.  

We have seen certification schemes and programs explode. What once was either ‘organic food’ or normal food is now, organic food, free range food, naturally raised food, pesticide free food, micronutrient dense food, regenerative food… you get the idea. And these are only increasing year by year.  

Product examples

Unsalted Creamery Butter by NZMP
Charcoal Toothpaste by 101 Lifestyle
Charcoal Toothpaste by 101 Lifestyle
Nootropic Brain Drink for Mental Clarity by  ĀREPA

But what does productisation look like in a large food processing company?

One thing is for sure, it does not look like a larger marketing team, or a larger team of field/farmer/grower representatives. If we hope to compete globally, we will need to do this without expanding our personnel load.  

We need to move from “how many four-legged creatures are in the paddock” to how many kilograms of a set of attributes are currently in the paddock. You can easily understand how viable the sourcing of the product is when leveraging data (most of it currently available now), to justify the spend/investment to process and create go to market.  

Then we need straightforward ways to test, verify and validate that the market will buy it. Since we cannot expand our sales teams in foreign countries sufficiently to do this process manually, we need to cut the time down from new product ideas to new product in containers.  

To achieve this, we need to take a page out of the tech industries notebook where a product owner is a person who owns the vision, profit and loss and viability of a product. This person owns the market validation side, they inform sales teams, and work with production (procurement) to be able to deliver on the product’s features and benefits. This role is the pivot point between so many aspects of a company, owning the success of a product. This capability at scale will be crucial in the future.  

The alternative protein space has exploded and now has several subcategories such as cell protein, plant protein and even air based protein. If the primary industry intends to keep up, this productisation function which creates NEW value needs to be a core function which leverages digital assets (data) to address real emotional concerns for the consumer.  

Data science supported by productisation is what we are talking about. The cost of not producing new product/value propositions, far outweighs the cost of investing in producing products, with the rate of change coming fast and furious. This needs to be a core capability in your company – does your company have this? Is your technology set up to this function?  

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