Facing up to the synthetic foods challenge

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Telling the story of New Zealand's sustainable production system and naturalness will be critical in a world of increased competition from synthetic foods.

ANZ's latest "Agri Focus" report looks at synthetic food products, which are being marketed as more ethical, environmentally sustainable, safer, healthier and more diverse than the traditional products they look to imitate.

Some had already reached the marketplace with success while others remain in the "proof of concept" stage.

Products under development included steak chips, burger patties, meatballs, hot dogs, sausages, meatless "chicken" strips, mayonnaise and cookie dough without eggs, scrambled egg replacement, bacon, milk, cheese, yoghurt, ice cream, popcorn, shrimp and cultured leather. Although many of the potential advantages made sense, it was still very early days, the report said.

Many benefits were not likely to be as large as claimed and there could be unintended consequences and trade-offs that would only reveal themselves over time and with more research.

Synthetic foods faced four key barriers to further progress: commercial scalability, technicalities of creating equivalent imitations, regulation related to the labelling of food and its safety, and consumer response/acceptance.

For New Zealand food and beverage companies, there would always be a marketplace for natural products produced in a sustainable manner, the report said.

But to defend against new forms of competition, New Zealand would need to tell that story for every product sold.

That required producing quality products with unique attributes compared with synthetic products, as well as trademarked intellectual property. Other areas of focus were a need to continually strengthen sectors' claims and credentials about animal welfare, environmental sustainability and food safety with appropriate policy and quality assurance programmes.

Companies seeking to produce a range of synthetic or artificial foods were all trying to disrupt or create new forms of competition to the "traditional" way of producing food, especially in the livestock sectors.

The livestock sector was not the only target, with one recent project looking to produce synthetic wood.

Consumer response was the ultimate test. Research and surveys on the topic seemed to vary substantially between finding there was limited appeal through to unlimited opportunity.

Until more products were in the marketplace, it would be difficult to judge how how consumers might respond.

The mentality of New Zealand "feeding the world" in the early 2000s had slowly changed to targeting markets and discerning consumers willing to pay a premium for quality food, the report said.

The food market was vast with a huge range of choice. Categories such as natural, grass-fed, pasture-raised, organic food and wholefoods would always exist and synthetic food could not directly compete. That meant if synthetic food navigated some of the key barriers and penetrated the mass market, New Zealand's food and beverage companies would need to emphasise this country's unique points of difference.

In the case of the livestock sector, that included emphasising the naturalness of the product through to the sustainability of the production system used to raise livestock.

Producing quality products with unique attributes and trademarked intellectual property would be crucial.That was what the kiwifruit sector had done with Zespri Sungold, the pipfruit sector had achieved with new "club" varietals that had eating qualities desired by Asian markets and what Marlborough sauvignon blanc represented.

For the likes of the meat sector - and especially where manufactured meat products accounted for 60% of sales in an area which was a key target for synthetic products - there might be a need to look at alternative cuts and products not so easily replicated with synthetic technologies, it said.