New Zealand's fresh-food producers need to be aware customer tastes can change quickly and that global food prices are increasingly volatile, says David Hughes, emeritus professor of food marketing at Imperial College, London. He addressed an invited audience of Bay of Plenty food producers at Zespri International this week.
"We have a great respect for Professor Hughes' in-depth knowledge of our sector," said Zespri CEO Lain Jager.
"Zespri has brought him out to New Zealand before to talk with our growers and staff, and we wanted to extend this invitation to the wider Bay of Plenty food-producing community.
"His wide-ranging and highly engaging presentation gave us the space to stand back from our day-to-day operations, and really look at the global arena we compete in and where it's heading," Mr Jager said.
Professor Hughes told the audience that the bigger the brand, the bigger the risks for the brand owner. Major suppliers of all inputs will carry the "brand integrity torch" for the brand owners, and branded supply chain partnerships will be closer and longer-lasting than commodity supply chains.
In a follow-up interview, Professor Hughes said that producers had to understand shoppers better than in the past. Asia was a huge and growing market for New Zealand, he said.
"Asian income is going up so they are going to trade up and change their diet, which means more fresh produce, more dairy and more meat, which is what New Zealand produces. But that doesn't mean you can sit back and relax because it is never just upwards and onwards. You will have to keep a very careful eye on what is happening to world food prices, which are increasingly volatile."
While prices were trending up, Asian incomes were relatively modest, although increasing. "And if the price of rice doubles, then the housewife will focus on putting staples on the table, and not the sort of food New Zealand produces."
New Zealand had shown it could market-fresh produce successfully, said Professor Hughes, noting as an example the launch of Jazz and Pink Lady apples in the UK market. "They were supported by a proper marketing campaign backed up by controlled supply. Overall apple prices are going down in the UK, but the prices of Jazz and Pink Lady have been going up. New Zealand is actually rather good at doing that."
Priority One chief executive Andrew Coker, who attended the session, said Professor Hughes' presentation had been riveting and relevant to Bay of Plenty food producers and exporters.
"His messages in regard to the growing importance of some emerging Asian markets, their dietary trends and the impact of an increasing level of climate-driven spikes in food pricing and the consequent retreat to buying staples over 'nice-to-haves' are now significant strategic considerations."