Less Grass, More Grubs: New Zealand’s Agriculture 2.0 Strategy Takes Shape

The attendee list for ProteinTech 18 reads like a blueprint for the future of Agriculture in NZ.  

Seeing AgResearch alongside Plant & Food Research and Fonterra alongside SAFE is indicative of the cross-sector collaboration we need.  

The inaugural conference focussed on the rise and implications of alternative protein from societal, agribusiness, R&D and farming perspectives.

It was heartening to see so many industry representatives acknowledge the need to step-change the way we do business to meet emerging challenges. The solutions and strategy aren’t there yet, but I walked away proud to be part of an industry that seems increasingly committed to change.

It’s a good start on a long road.

Across the conference, I took away four key themes to consider on our journey to Agriculture 2.0.

Our place in the big picture

I’m of the opinion that every presentation, for anything, should start with a reminder that we’re living in the Anthropocene - the epoch of human stuff-ups. 

Rod Oram set the scene by describing the big picture of planetary degradation and the biosphere limits of business as usual, noting that global animal agriculture is arguably the worst offender and a driving force behind issues like climate change, biodiversity loss and freshwater use. 

Regardless of our best-in-class standards and footprint, a changing environment will have serious implications for Ag NZ.

On farm, we’ll face production challenges in increasing drought conditions, the spread of exotic diseases and localised flooding. Drought in particular will be a challenge for North Island production hubs. We saw the devastation of drought in 2013. Is our current model resilient enough to survive multiple years of similar conditions?

In the market, consumers are increasingly choosing products that cut their individual environmental footprint. Meeting this demand are alternative food production models with dramatic system efficiencies in land, water and energy use and more resiliency in the face of climate change.

The era of free emissions is coming to an end as regulatory pressure to bring agriculture into the Emissions Trading Scheme gathers pace. There is a precedent for fierce environmentalism challenging business models. The CFC (chlorofluorocarbons) ozone hole crisis of the 1980s resulted in a global regulatory effort to stop production of the destructive chemicals. Could animal agriculture and other industry face similar pressure in a runaway climate change scenario?

Rod’s argument culminated in a similar point raised by Melissa Clark Reynolds – it’s not the tech that disrupts, but the business model.

We are entering a new world where environmental credentials and resiliency to climate change will make or break industries. To compete, simply reducing our industry footprint won’t be enough. We must transform our model into a net positive force for the planet, while simultaneously adapting our land use for a changing climate. What does this look like? Widespread uptake of regenerative farming practices, dramatically lower inputs, a focus on soil health, afforestation of marginal land and emission free supply chains are a few levers we can pull.

Rod and Melissa’s presentations reminded us that our challenge runs a lot deeper than just a premium meat and milk marketing campaign. We must plan for a world and market in flux, where climate change impacts the way we farm and the demand for our products.

Tunnel Vision

Manaaki Whenua Landcare Research's Peter Buchanan opened with a pointed reflection. For a conference about New Zealand’s place on the world stage, there was little Māori representation.

In many contexts, the conference showcased the depths of cultural understanding our industry is capable of. Many speakers covered the shifting tastes and norms of Western and Chinese consumers. Case in point was a thorough analysis of the rise of chicken as an everyday meat and the continued premiumisation of red meat across the world.

The likes of Plant & Food Research and Beef + Lamb NZ should be rightly applauded for building such a robust understanding of our international customers. 

However, like typical Kiwi’s and as pointed out by several speakers, we need to get better at articulating our strengths.

A few speakers mentioned Kaitiakitanga (land guardianship & stewardship). This uniquely Kiwi concept should be a major pillar and guiding principle of Ag 2.0 in New Zealand. In a world increasingly demanding authentic products with reputable environmental credentials, grown with love and in partnership with nature, Kaitiakitanga represents a mission, ethos, framework and global marketing campaign all rolled into one. NZ Story have done some excellent work in articulating Kaitiakitanga already. In the push to premiumise our meat and milk, we’ll need unique selling points like Kaitiakitanga to help us redefine what sustainability looks like and set us apart in a world of competition.  

On a more technical level, Peter covered an exciting pilot program to commercially rear huhu grubs – a traditional Māori delicacy. The case study was a reminder of the potential of our native biodiversity and knowledge as a competitive advantage in the new food landscape.

Ag 2.0

It’s amazing that fundamental truths can hide in plain sight for so long. Peter’s point that half of our economy relies on the biodiversity of other nations is one such example. We forget that the sheep and cattle breeds that built this country are all imports. We have never really considered the economic potential of our native biodiversity.

Peter and Plant & Food Research’s Jocelyn Eason discussed how diversification and owning the whole value chain represent a pathway to Ag 2.0.

Peter reminded us of Quorn – the UK’s booming fungi based meat substitute. Could NZ do the same? Considering we have only mapped a third of the native fungi kingdom (which is substantially larger than its plant counterpart) and commercial production would likely offer massive system efficiencies over current protein production, the answer may well be yes.

Huhu grubs, fungal protein - these are the kinds of diversification plays that build resilience into our model. They’re less vulnerable to climate change, more palatable to increasingly environmentally conscious consumers and exclusive to NZ.  

In his piece on why ending fossil fuel exploration in Taranaki was the right thing to do – Rod Oram offers a guiding principle on how to compete in a global market. Countries do well when they stick to what they’re good at. In our case, that’s premium food production and innovation.

Through greater focus on R&D, Jocelyn Eason illustrated how we might capture more of the plant to product value chain. Examples include new plant variety rights as IP for NZ, innovative farming techniques that mitigate climate change impacts, pioneering techniques for scaling up plant protein production and expertise in premium food and branding. 

Good examples of value capture in a new look, Ag 2.0 are calocurb and Lanaco. Calocurb is a NZ developed weight management supplement combining breakthrough research from Plant & Food and a specific hops flower strain grown in Nelson. The product sells at a premium and has rapidly expanded to North America. Lanaco craft a woollen filter media for medical and domestic appliances from the ultra-fine wool of their own sheep breed, The Astino.

Premiumisation as the bridge, not the destination

In his recap of ProteinTech, John Hart lays out the risks of remaining a commodity player against the rising tide of alternatives. In response, premiumisation of our meat and milk is often touted as the best vehicle for capturing more value in the global market. There are optimistic signs that this strategy is on the mark - like the continued rise of food as an experience (more Chinese and US consumers are eating out than ever before), the opportunity to align our brand with craft values and constantly evolving ways to sell our produce, like the trendy resurgence of bone broth.

However, the fundamental challenge of premiumisation is more relevant than ever. Despite current demand, it's highly likely that we'll be doubling down on a shrinking market in the years to come. The trend lines around millennial’s increasingly vegan eating habits are clear, our largest potential market (China) aims to cut meat consumption by 50% and the ethical implications of comparable alternatives all undermine the long term viability of the premium play.

Instead, I believe we should view premiumisation as a bridge to a more diversified, resilient sector. Capitalising on and enriching our brand pillars of heritage, environmental standards, animal welfare and quality, while also investing in new models of land use and food production.

ProteinTech revealed a glimmer of what Ag 2.0 could look like. And I get it. Commercially raising huhu grubs doesn’t ‘feel’ like farming. But to thrive in a strange new world, we need to recognise that demand is changing and we are compelled to change with it.