Should we be tech companies that ship meat, apples, milk?
I run workshops sometimes for primary industry processors and aggregators. More often than not someone always says
“So should we just be tech companies that produce and ship high quality meat, milk, apples” Or whatever specific primary industry product/food that we’re discussing at the time.
Back it up - how did we arrive at that conclusion?
A few things that have really shifted the thinking
- Volume to Value - the need to make this shift for sustainability (ecological, economical and social)
- Productivity rates in the agriculture sector being very poor (report)
- Digitisation - what does it mean for the primary sector (as many would argue it’s difficult to “digitise” a four-legged creature or a piece of fruit
Something that always resonates with me from Melissa Clarke Reynolds (https://futurecentre.nz/) talks is the “company metaphor”
What is the company metaphor that many of our primary industries are operating with? Often this unspoken company metaphor can keep an organisation or even an industry stuck and very subject to disruption.
A Helpful question to ask is if we started a company from scratch today to export some high value New Zealand products, how would it be structured, how would it run?
It's very unlikely that we would arrive at the same sort of approach that we currently have, which has been a linear evolution over time, often with little question about whether the direction we’re headed is right for the future. Sort of “if it ain't broke right now, don’t bother fixing it” approach.
Many who have heard me speak have heard me say that we must shift our understanding of “risk” which is typically focused on the past, and look forward because the biggest risks facing our primary industry today are lurking in the future somewhere and are likely to blindside us if we are not prepared.
What do I mean by prepared?
Flexible adaptable - The ability to shift to new markets quickly the ability to create new value, new products quickly. The ability to be more than just commodities exporters, but actually a preferred supplier for our retailers and food manufacturers, providing more than just physical goods, but that “intangible” aspect that ensures we’re a preferred supplier.
There are many things that few of us have influence over such as trade agreements, geo political winds of change, climate impacts and changing consumer behaviour and preferences. Our job is to enable a resilience and flexibility into our organisations to lean into it and leverage it for growth.
So how do we do this?
This brings us back to- “should we be tech companies that produce food?”
This question really starts to shift the conversation. When we did a whiteboard exercise about what would a processing/exporting company look like today if we designed it from the ground up.
We approached with the core “jobs to be done” and we asked what exists today to handle those bits. We had technology solutions that were best fit for each step of the process. It was lean, low cost and enabled the proposed whiteboard company to move fast into markets and product value articulation and proof of quality right through to the end consumer. It very much resembled the Larry Kealey Air BnB (link) example of their nimble tech stack, which allowed them to scale using best of breed tech.
So are we primary agribusiness processors that implement tech to do an incrementally better job trying to keep up with rapidly changing landscape of transport, consumer behaviour, climate, retail and social trends while protecting an identity we’ve become accustomed to? Or are we Technology first companies that deliver value leveraging New Zealand points of differentiation as growth opportunities?
I would argue that if we were the latter we’d have recognised the huge opportunity that having a half meat half plant burger would be at this very moment. Not 5 years ago burgers with oats might have been considered “filler” but right now there is a value proposition that’s not being leveraged for an every growing segment of the market. A product that would leverage New Zealand’s points of difference in arable and red meat and tell a great climate, water and nutrition story.
My question is why haven’t we been able to move more adept into this and why don’t our product lines and offerings reflect this. Arguable the financials stack up on it as well, Southland oats + high country meat would be a lower cost of ingredients and you’d be able to charge a premium for the value proposition?
