Business Insights

Food And Beverage

A new generation of consumers is changing the game when it comes to food.

Millennials aren’t just changing the food we are buying; they’re changing how we are buying it.

Millennials are an increasingly large demographic, and the choices they make are influencing the way we run our farms and businesses.
Gary Hirshberg may be a baby boomer, but he understands what drives younger generations when it comes to the choices they make.

“Unlike my generation, millennials have grown up knowing about climate change, knowing about environmental pollution and they know the most powerful thing they can do is consume consciously.”

Dubbed ‘the CE-Yo’ by many in the American media, Hirshberg co-founded Stonyfield Farm, one of the world’s leading organic yoghurt producers, where he served as CEO for 28 years. 

Under Hirshberg’s leadership, Stonyfield Farm grew from a seven cow organic farming school to a company with US$370 million in annual sales.

In New Zealand to talk to businesses about breaking into the US market, he said New Zealand food producers are in a powerful position when it comes to how we produce food and market our unique story to the world.

“That unique story is exactly what the new emerging consumer is looking for.”

“Here you are a country that boasts some of the cleanest purest ecosystems on earth and the extraordinary taste that results from that.  That resonates with the consumer.”

“They may not have as much money as older generations, but they want to be sure that their dollar is helping improve the world, so that becomes an opportunity for you.”

New Zealand’s red meat sector is a good example.  There is growing demand in the USA for product which is  free from genetic modification and antibiotics and  which comes from animals that have been grass fed and looked after in a sustainable environment.
But the way that meat is making its way from Canterbury to New York kitchens is a little different.  One example, is via American meal kit company Blue Apron.

“Going hand in hand with these new emerging consumers, there are these new emerging channels,” Hirshberg, a father of three millennials himself, sees first-hand how consumer habits are changing. 

“They’re not going to go to supermarkets and stand in lines; they pull out their phone and expect it to come to them.”
Gary Hirshberg has recently joined the board of Blue Apron, which has the largest share of sales among American meal kit companies.  The service they offer is similar to what My Food Bag offers here in New Zealand.

New channels to consumer like this are popular with tech savvy, younger shoppers wanting to make a conscious choice about what they buy.

“The box comes to you in environmentally sound packaging, there is no food waste because it’s just the portion size you need, and there is a beautiful recipe card where you can see the finished meal and how to cook it – its fool-proof.”

“Above all they are absolutely committed to sustainability.”

Alongside convenience – Blue Apron’s point of difference is its commitment to building a better food system based on principles of sourcing sustainably grown produce, free from pesticides and hormones with a growing focus on organics.

The fast growing American organics market is where Gary Hirshberg sees the biggest opportunity for New Zealand.  He points out that while our ‘free from’ story gives our red meat sector a competitive advantage at the moment, we don’t own it.   If another country like Chile or Argentina can come in and offer the same thing they will. 

According to the Organic Trade Association based in North America consumers across America are eating and using more organic products than ever before.  Based on their research, organic sales in the US totalled around US$47b in 2016 up US$3.7b from the previous year and accounted for 5.3% of total food sales* in North America.

To tap into that opportunity Hirshberg says New Zealand needs a certified organic standard, something recognised world-wide which reinforces our organic brand. 

“I cannot over-emphasise the importance of one organic seal.”

America’s organic industry, he says, didn’t begin to take off until they developed the government sanctioned USDA organic seal.
Organic exports from New Zealand are certified by several different third party agents approved by the Ministry for Primary Industries, and while small, they are growing.  Latest figures from Organics Aotearoa New Zealand show exports were between $240m and $250m in value – an increase of over 11% since 2012.

ANZ Bank New Zealand Commercial & Agri General Manager – Central Region John Bennett says exports and particularly food exports underpin the New Zealand economy, so it is critical to our future that we respond to market dynamics.

“Changing international demands undoubtedly challenge the traditional models that have underpinned the NZ food export sector.”

“At ANZ we are continuing to see more of our customers responding to the opportunity that this creates. Whether this is by identifying specialist markets for their products, creating new varieties or products relevant to the consumer, adapting supply chains to connect more directly with the consumer or using social media to tell their story direct to market, it is ensuring they continue to be relevant and create value in a changing world.”

Bennett points out this requires access to specialist market insights and connections to key players internationally, which is where ANZ plays a role through our specialist teams, research capability and market connections.

“The real value, however, will come through increased collaboration across the sector to create a New Zealand story that will ensure the sustainability of our brand with international consumers.”

In the age of digital technology, traceability and social media, consumers are our toughest critics, Gary Hirshberg says giving them a New Zealand brand they can recognise and trust is important.

“You’ve got an incredible story to tell, just tell it and don’t spoil it.”


*source:
https://www.ota.com/news/press-releases/19681


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