New Zealand’s food export market should reposition itself as the wellbeing capital of the world, as protectionism rises and countries fear food security.
Dairy and meat exporters are being warned about facing a similar future to New Zealand’s wool industry, if food producers do not transition away from a ruminant economy and towards a plant-based one.
Dairy is New Zealand’s biggest export earner, worth about $19 billion a year, followed by meat.
Geopolitical tensions, post-Trump, with supply chain issues caused by Covid-19 have amplified protectionist sentiment in trade, entrepreneur Jade Gray says.
Gray returned to New Zealand in 2019 after working in China’s food industry for more than 20 years.
“I did everything from cattle farming, genetics, processing, retail, then ended up doing my own restaurant group, Gung Ho,” Gray says.
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Speaking at the Auckland’s Future Now economic conference last week, Gray told how the company he left two years ago made record sales last month in China, despite the “biggest catastrophe” in its recent history.
“Food is going to hold up the New Zealand economy until tourism, education comes back…What’s the food market? It’s Asia. It’s the golden goose for New Zealand,” he said in his session.
“There’s an opportunity there, and a threat.”
The single biggest threat affecting food production, Gray says, is food security.
Singapore, a foothold for many New Zealand businesses wanting to crack the Asian market, is aiming to increase its domestic food production to 30 percent by 2030 to buffer from climate change driven food security concerns.
The island currently imports more than 90 percent of its food from 170 countries, but the Singaporean government is funding 12 projects under its “30 by 30” plan to develop the local agri-tech and R&D system to produce more food.
Gray started Plant Tech Nation last year after Covid, to address the international and climate threats impacting New Zealand’s food production future.
“You have to learn from history. We can’t forget that in the 1960s the wool industry was warned about getting destroyed by synthetic fibres. At the time everyone scoffed. 50 years later, that industry’s collapsed.”
He says food production will move from the pastures and into the cities.
“Imagine micro breweries all around the city producing, fat, carbohydrates and protein. That’s where it’s heading, particularly in these Asian markets.”
Gray describes it as a collaboration: rurally grown legumes and peas, for instance, sent to the city centres or fringes for processing to be turned into protein powders or plant-based products.
New Zealand’s renewable energy-heavy manufacturing industry could also be our competitive advantage against countries like Israel, the United States and Australia that are trying similar things.
Gray says local food producers must use “brand New Zealand” and the opportunity provided by countries offering their domestic sectors massive fiscal budgets on urbanised food infrastructure by supplying IP and innovation.
“If we don’t, the flip side is that as they become self-sufficient, we lose those markets over time, from our traditional sectors. So we really need to jump on that food technology and innovation,” he says.
“What we should take away from this pandemic is that people are really focused on nutrition and immunity. We need to own that in terms of being the wellness capital of the world. Whether that’s wellness of your food and health, or tourism.”
Gray has been working with Massey University for six months on plant based products that will be ready for market by the end of the year. The food is being produced at Callaghan Innovation’s Foodbowl in Auckland.
In 2016 New Zealand’s biggest trading partner, China, outlined a plan to halve the country’s meat consumption by 2030 to reduce carbon emissions and related health concerns including obesity and diabetes.
Citizens are urged to limit their meat intake to 40 to 75 grams a day.
Last year the University of Auckland’s Koi Tū Centre for Informed Futures published a report confronting the future of New Zealand’s agricultural and food production system.
The Future of Food and the Primary Sector report called for food producers to capitalise on our rising international reputation with a long-term food strategy supporting sustainability and adapting to new technologies and consumer demands driven by climate change.
Sir Peter Gluckman, one of the authors of the paper, says we’re still living with our “heads in the sand” while the world addresses food security concerns through technological innovation in food production.
“New Zealand is still living under the naive assumption that things will still be the same in 10 years time be as they are now, with a high demand for paying premium for ruminant products, against the reality of climate change, supply chain disruptions and fast moving technology,” Gluckman says.
The report says as progress in technologies drive down production costs, and depending on consumer acceptance, plant-based and technology-based equivalents to meat and milk may become real challenges to commodity-based milk and meat production systems.
“New Zealand may need to explore whether it, too, has advantages in advancing synthetic food production. If the market for plant-based meat substitutes continues to grow as projected, these factories will have to source large amounts of nitrogenous (legume) plant material, such as lucerne, and various leguminous grains for manufacture,” the report says.
Canterbury dairy farmer Andrew Hoggard says the cost of diversifying farming to plant-based production is too great for his operations at this stage.
He says another challenge is that New Zealand doesn’t have arable land suited for plant-based production.
“We can’t grow crops on most of the land here because it’s too hilly,” Hoggard says.
“I could grow peas but, again, will I earn extra per hectare? I’m doing pretty nicely from the dairy and it keeps the system simple and I do what I do well. Doesn’t mean I can’t do it, but there’s no market driver for me to swap right now.”
The number of New Zealanders eating “meat-free” jumped to 15 per cent last year, according to a 2020 Colmar Brunton Better Futures report.
The report showed in 2018, that number was 10 per cent, and the year before, just 7 per cent.
Across the ditch, Australia’s plant-based meat sector’s manufacturing revenue, nearly doubled from AU$35.2 million (NZ$38m) in 2019 to AU$69.9m (NZ$74m) last year, a report by think tank Food Frontier released this week says.
A UN-backed report released in February shows the global food system poses the biggest threat to 28,000 species and a shift to plant-based diets is key to stopping the damage.
The Chatham House report says food production causes about 30 percent of all greenhouse gas emissions. Half of that was from animals.
Gray says farmers need a transition path towards growing climate-friendly protein products.
“We need to bring farmers [along] for the ride. We have to think about how we offer the farmer better return on their land producing high value plant protein, versus resource-intensive dairy and meat.”
Gluckman says the food production sector needs long-term thinking.
“We need to look at two decades ahead, not two years. The existential risk of climate change as we look ahead and the manifestation of concerns young people have, which will rise exponentially as we get closer to not meeting global climate change goals, will lead to the kind of reaction that will be inhibitory to ruminant based foods.”
“There will always be a niche for ruminant products, but is that a niche we want to have?”