Environmental limits, changing tastes and a redefined social licence are driving consumers away from animal proteins. In part two of a series on the rise of veganism, Daniel Eb looks at what New Zealand must do to get on board.
There is a sense of impending transformation ahead for agriculture in New Zealand. The world's richest consumers – New Zealand’s target market – want products that speak to their identity. They are increasingly perceiving value in terms of experience, and are less willing to tolerate our production-first model. In short, they want something to believe in. In the second part of this series on veganism I outline a way forward, an opportunity to re-imagine our value as food producers and our impact on the world.
Value in the experience economy
The concept of economic value changes over time, and the way the world's consumers value farming is shifting.
Consider Pine & Gilmore's analogy of the evolution of the birthday cake. First baked with cheap commodity ingredients in the agrarian economy, then made from a manufactured pre-mix and eventually ordered direct from a patisserie, today's parent outsources the whole birthday to Chipmunks – complete with ball-pits and party games. The cake is thrown in for free. In this example, real value now lies in the laughter of the child – an intangible experience that we can’t put a price on, but we know is worth paying for.
We live in the experience economy and increasingly value intangibles like identity, uniqueness and memorability. Contemporary value is likened to the 'warm glow' of giving to charity or the pride that comes from communicating your beliefs.
As consumers, we're spending more on unique experiences. Millennials in particular are driving the experience revolution – 50% value experiences over things and 60% prefer products that speak to their identity. It helps to think about value in the experience economy across six often overlapping pillars: adventure, togetherness and friendship, caring, self-definition, peace of mind, and tradition and convictions.
Customers come first
Let's get more specific and talk about NZ agriculture's target market: 40 million of the world's richest eaters.
The value that they attach to animal products is changing. Zero or reduced meat diets are experiencing exponential growth. In the US, the vegan food category grew 20% in the year to June 2018, more than doubling its previous annual growth. In the UK, upmarket supermarket chain Waitrose saw a 70% growth in plant-based food sales. Regulators are also shaping eating habits – China plans to cut meat consumption by 50%, the UK is considering increasing taxes on meat and the UN is calling for other countries to follow.
Wealthy consumers are more likely to take increased satisfaction from experiences and can afford to be discerning, not just on quality, but on the meaning they attach to a product. When choosing a diet, many consumers are shifting away from personal satisfaction (e.g. taste) and towards to the intangibles of animal-free options – identity, status, ethics and social currency.
For some, a flexitarian diet will be their stand against the cruelty or environmental degradation caused by industrial farming. Others will choose a plant-based diet to achieve their health goals. Given the social currency veganism generates across social and mass media, many will turn away from meat and milk simply because it’s cool to do so.
Alternative proteins: meaning, not marketing
When asked why he was launching Memphis Meats (a cultured meat start-up), CEO Uma Valeti had this to say: "We plan to do to animal agriculture what the car did to the horse and buggy. Cultured meat will completely replace the status quo and make raising animals to eat them simply unthinkable."
In 2021 Memphis Meats will launch cultured chicken and duck. Competitor Mosa Meat will launch cultured hamburger meat in the same year and steak is next on the menu.
Looking at this kind of language, we see a pitch to consumers that transcends usual food marketing around taste, place or people. Instead, they’re asking for help to revolutionise a broken food system.
You don't 'sign-up' for Memphis Meat’s newsletter, you 'join the movement'. Their marketing is deliberately confrontational right down to the names: ‘clean’ or even 'slaughter-free' meat. Theirs is a rallying cry to the animal lover, conservationist and economist in us all. It offers an opportunity to stand against industrial farming and enjoy the 'warm glow', identity signalling and social currency that comes with it.
Alternative protein companies aren't marketing, they're building meaning. To compete we need a movement of our own. We need to give our customers something deeper to believe in.
Our volume to value movement
Value in animal agriculture in New Zealand is still largely a case of more production equals more value. Recently several features of the model have begun to damage our clean, green value proposition, such as our reliance on synthetic fertilisers, imported feed, dairy conversions in sensitive ecosystems and water quality to name a few.
But the production-first approach is slowly giving way. Exceptional farmers, organisations and professionals are re-imagining value in our model. NZ Story are building Brand New Zealand and helping businesses to articulate our core values. Te Hono is a business-led forum working to make the NZ primary industry a world leader. Pāmu (formerly Landcorp) are interpreting kaitiakitanga (guardianship) in primary production and developing boutique nutrition such as sheep and deer milk. Pioneering farmers like the Hart family on Mangarara Station are proving that regenerative farming, community engagement and land stewardship offer alternatives to the production first model. There are countless others adding value in their own way.
I’m interested in how global leadership across three key pillars can add intangible value to the food we grow – working towards a net positive footprint, championing animal welfare, and prioritising our heritage.
I see these pillars as positive feedback loops, where our leadership builds a valuable global brand and in turn incentivises more sustainable farming practices.
1. A net positive footprint
Environmental degradation is the defining issue of our time. On farm, we’ll face challenges like prolonged drought, flooding and biosecurity breaches. Off farm, we’ll face regulations and a tightening social license to operate. On-shelf, competitors will offer a greener value proposition.
To be blunt, either we get our stock numbers down or the market or nature will do it for us. The solution lies in redesigning our model so that farmers profit when practising environmentalism.
We know that smart land management sequesters carbon and that Kiwi farmers are slashing their emissions, improving water quality and protecting more than a quarter of our native forests, but how far could we pull this intangible value lever? To start, we should implement a national environmental framework like Ireland’s Origin Green and processors should reward their best farmers. Fonterra, for example, should stop mixing their most sustainably produced milk with the least. But we’ll need to go much further.
What kind of premium could we earn if all NZ produce was certified carbon neutral? What if every lamb chop, piece of cheese or steak purchased increased native biodiversity? How do we get more tourists on-farm to generate value from environmental investments? Could we mainstream regenerative farming practices? What if every NZ product was sold in biodegradable packaging like Bostock chicken?
2. Zero cruelty farming
Deriving value by standing apart from the institutionalised cruelty of modern dairy, Happy Cow Milk allows for a more natural mother-calf relationship. Despite tough times, the company’s recent success demonstrates the value of compassionate farming.
New Zealand should be the Happy Cow Milk model for the world – renowned for a fierce rejection of the status quo and a commitment to our animals.
The arrival of cruelty-free meat and milk alternatives will shift the goalposts on how we define compassionate treatment. Mother-calf separation at birth, the annual slaughter of 1.7 million bobby calves and the 2-7km daily round trip to the milking shed are ingrained features of the production-first model and weaknesses in the New Zealand agriculture story. We won’t find value in just keeping pace with animal welfare standards, but we might if we relentlessly push them forward. New Zealand could very well earn its premium by being clean, green and kind.
3. Prioritising heritage
The American style cattle feedlot near Ashburton damages our reputation and highlights the intangible value between the ‘right’ way to farm, and the ‘wrong’ way. It undercuts our responsibility to protect the dignity of our people, animals and place.
When we terraform the Mackenzie country into dairy farms, import feed or degrade local waterways, we muddy the NZ heritage story.
Take food safety for example. We’re number one in the world because our customers believe that we farm the 'right' way. They see first-hand the results of production-first farming and see in us something better. Our reputation for food safety isn't derived from following the production-first model, but by standing apart from it.
We can build a heritage value proposition through terroir storytelling (similar to wine), agri-tourism and radical transparency. It’s marketing fuel – imagine if Kiwi farmers led a global campaign against feedlot farming, championing the 'right' way to farm and making meat special again, the way our grandparents enjoyed it.
The clock is ticking
By 2021, we’ll see products on shelf that are comparable in taste to meat that will undercut us on price and outperform us on critical intangibles such as social currency, environmental credibility and ethics. We have an uncertain future as food producers in that world unless we acknowledge the limits of the production model and commit to farming the 'right' way.
We need a national transition framework that focuses on building the relationships, know-how, oversight and marketing capabilities that enable a low production, high value model.
We're Kiwis – if anyone can do it, we can.
Read part one of Daniel Eb's series on the rise of veganism here.