Wednesday, 5 August 2020

Podcast: Covid-19 - An essential time to innovate


In a world that has grown used to responding to change and volatility, Coronavirus has established a new gold standard for disruption. Orders to lockdown and shelter at home have impacted almost every facet of daily life as governments have sought to break the chain of transmission of the virus.

These orders have highlighted life’s essentials to communities around the world; healthcare, shelter, family and food. In the case of food, we have seen people queuing to buy food from near-empty shelves, return to the kitchen and cook at home, before sharing their successes on social media. The last few months have reconnected people to the important role that food plays in their lives and the essential role that food producers and distributors have in supplying food to their communities.

The shift in the mainstream narrative around food, from producer as exploiter of land, water, climate and animals to provider of essential nutrition for fuelling life and maintaining good health, creates a rare opportunity for the food and fibre sector to reset its relationship with the wider community. This will ultimately benefit all New Zealanders, but action needs to be taken quickly as the window for a reset will close as the world moves on, supply chains recover, and food again becomes readily available.

While the opportunity for a such reset is positive, it sounds high level and, for the average producer, something that happens elsewhere. The reality is quite different; a successful reset will require action from everybody involved in the food and fibre system on many fronts.

“There is no playbook on how to respond to what we have experienced this year, but what we do know is that change has happened quickly; there is an opportunity to innovate at a pace that was unimaginable six months ago.”

While there is clear evidence that people have become more closely connected to food over the last few months, there are many other signals we have detected around how people have changed the way they engage with food in response to the pandemic. The economic pressures on people who have lost their employment, been furloughed or taken salary reductions have immediate impacts on personal dietary choices. Marketers need to respond with agility to adapt products to meet the new realities of their consumers.

The fact that we have all been consistently told in recent months that our everyday environments are inherently unsafe has lifted awareness around a myriad of safety issues. We expect to see food being packaged more to reduce how often it’s handled before it reaches a consumer, to raise confidence that it is safe. Consumers will also likely want to understand more about the provenance of a product, which will require producers to provide additional data about the practices they use on their farms and orchards.

The pandemic has also highlighted the limitations of globalisation, with many supply chains failing to deliver the essential products needed to support a community. We can already see governments around the world taking actions to protect local business to ensure that their countries are more resilient in future, particularly in relation to food and health products.

As a small nation that grows more food than we need, New Zealand relies on an ability to export to the world, and any move towards local protectionism presents a major threat to our economy.

The food and fibre sector in New Zealand needs to stand up for rules-based free trade. This means we need to continue to import products when it makes sense to do so, while working with our government and the communities in countries we export to, to ensure trading with us is seen as something that creates benefits for all involved.

Before the pandemic, the industry had developed a bold vision for its future, Fit for a Better World, setting out some clear aspirations to produce food in a uniquely New Zealand way that enhances rather than degrades the natural environment. This vision had been developed in response to challenges the industry has faced around its licence to operate in recent years, a need to respond to climate change and the expectations of discerning consumers we sell to globally. Commentary in recent weeks has suggested our ambitions in these areas are now too expensive and should be deferred or abandoned.

While Covid-19 has dominated the news agenda, the reality is that the biggest challenge our society faces, and how we will be judged by history, remains how we respond to climate change. This is an issue that is important to our communities, our own children and grandchildren, and the consumers we sell to. The ambitions articulated remain right and now is not the time to pull back when competition for premium consumer dollars is going to be stiffer than ever. We must progress along a transition pathway in a way that is both meaningful and affordable. The whole industry needs to take realistic steps to reduce its environmental impact, whatever stage of the supply chain they operate at. Ensuring actions taken to recover from the impact of the pandemic also advance environmental performance just makes sense.

There is no playbook on how to respond to what we have experienced this year, but what we do know is that change has happened quickly; there is an opportunity to innovate at a pace that was unimaginable six months ago. Having moved through the initial response, now is the time to take actions that will build a resilient business for our now-normal future. From what we are observing, the potential for the food and fibre sector to accelerate value creation and lead New Zealand’s economic recovery makes for a more exciting future than we could ever have envisaged last year.