The influence of consumers on animal production and how the industry should approach this issue was a hot topic at the 2018 Poultry Information Exchange and Australasian Milling Conference (PIX/AMC) June 3-5 in Gold Coast, Australia.
The event, held in the Gold Coast Convention Centre, attracted more than 1,500 delegates from the poultry, egg, flour milling and feed milling industries.
The theme of this year’s conference was “Supply chain opportunities — farmers to consumers,” featuring speakers from a wide range of industry groups and businesses.
Familiar themes like markets, transport and supply chain and technology were discussed but by far the primary topic and one that created most attention from delegates was the influence of the consumer on animal production and how the industry should approach it.
Introducing this theme, talking about big data and what the future of the industry might look like, was Paul Higgins from Emergent Futures. Higgins’ expertise is to provide insight into what an industry might look like in 10 years. When talking about food, Higgins said the consumer will put further attention on the producer as they become increasingly interested and informed about where their food originated.
Powering will be the collection of big data by retailers who use apps and other technology to understand consumer choice influences. Recently, retailers such as Amazon and Chinese giant grocer Alibaba have begun collecting data.
“They will know what you choose not to buy as much as they know what you buy,” Higgins said. “For example, they will understand what three items you were looking at and the one you did buy.”
He described this as a scary prospect for the feed, poultry and flour milling industries because it gives consumers greater influence over production.
“Consumers don’t just want to know their food is clean and green, they also want to have an idea of the way it was produced and its provenance,” Higgins said.
He described today’s consumer as having ready access to information online and through social media that they use to make decisions on what they do and don’t eat. Higgins added that consumers often tap into the information that supports what they believe is right regardless of whether it is correct or seen in the context of the whole supply chain.
It was a theme that was to follow with other speakers also alluding to the issue of animal welfare and consumers dictating to the industry. This was especially topical given recent political and community discussion on the future of live exports.
Rowan McMonnies from industry body Australian Eggs mirrored these comments and argued the best way to counter consumer concerns was to build trust and accept there was no magic solution.
“The confluence of a limited understanding of farming on behalf of metropolitan-based consumers and an increase in the interest in where food comes from has increased conjecture around some farming practices and risks to the sustainability of agriculture industries,” McMonnies said. “Consumers are increasingly interested in what happens behind the farm gate in making their food, and farming practices have taken on a new relevance in terms of community awareness.”
Consumer influence was even affecting the work of Research and Development organizations such as Australian Eggs, which said it has placed this under the category of sustainability. It is having a greater impact in the long-term health of the industry, he said.
“While efforts have traditionally involved programs to improve the efficiency and productivity of egg farming, the changes in consumer behavior and influence required us to consider additional activities that identify emerging threats and engage with them most productively,” McMonnies said.
He argued to counter negative perceptions of the industry, like cage versus free-range eggs, is to be transparent and present facts to the consumer. While they wouldn’t always win the argument, it would earn community respect, he said, adding that this strategy built trust quicker than people expected.
Government Plays Crucial Role
Geoffrey Annison from the Australian Food and Grocery Council discussed the influence of the consumer on food production. He argued government has a role to play because industry reputation was critical for consumers to be confident in the food they ate and avoid regulation.
He said the Australian Food and Grocery Council has been advocating to government for an approach that capitalizes on Australia’s excellent reputation when it came to food production. Annison outlined four elements: certified safe, premium product, environmental credentials, and regional provenance that are readily appreciated by the industry but are unlikely to resonate with individual consumers.
“Rather, consumers are looking for a less tangible and more holistic defining characteristic of their foods – and that is authenticity,” Annison said.
Authenticity is difficult to define and varies between consumers, he said. It is a combination of provenance, product nature, production process, and price premium (value proposition). He added that this was a challenge for government to regulate, even when consumers expect some level of regulation.
“If foods, or the food supply, does not appear to meet consumer expectations — i.e. they are not what they claim to be or what the community expects them to be — then a substantial regulatory risk can develop,” Annison said. “In short, if industry does not keep pace with consumers’ expectations in terms of the products they produce, and the way they produce them, then government will regulate to ensure it does.”
Annison pointed to the release of guidance on free range in the poultry industry by the Australian Competition and Consumer Commission (ACCC) in February 2018 as an example of consumer driven demand impacting the industry.
“Over the past two decades, however, free-range eggs have moved from being a niche product to a mainstream product, driven not only by animal welfare advocates, but also by industry seeking to take commercial advantage of the free-range claim, and perhaps also at the company level as a defensive strategy to protect market share.
“Unfortunately, the lack of agreement in a standard stocking density as a qualifier for the free-range claim, coupled with heightened consumer activist advocacy driving community concerns around the claims, led to the ACCC decisions to regulate the claims directly under Australian Consumer Law,” Annison said.
Annison responded to a question how the industry should tackle these consumer concerns and influences.
“Ultimately it’s trust,” he said. “Consumers primarily trust (when it comes to food decisions) the last member of their family they spoke to who often doesn’t have the knowledge or experience to comment. But we can’t just vacate the space. We need to stand up and state the facts. The industry ultimately has to move in the direction consumers are demanding, but it is the rate of change because business needs time to adapt and to remain profitable and, provided they are given that time, they can make the changes required.”
Speaking on behalf of SunPork, Robert Van Barneveld said there always will be critics, but the industry should stand up for what it believes in.
“Tell them what they need to hear, not what they expect to hear and stand by your product,” Van Barneveld said. “It does take courage and you will get eggs thrown at you, but we respect diversity, and everyone is entitled to their own view.”
There was also a question on media’s attention on those in the industry who do the wrong thing and how the industry could manage it. Speaking from his experience with coal-seam gas, panelist Shane Charles, CEO of the Toowoomba and Surat Basin Enterprise, said his region has had large community support for coal-seam gas as they can see the economic benefits, while those communities in major cities are most vocally against it, drawing media attention.
“You’ve got one bad egg (in live export) that will shut down the industry,” Charles said. “Media like conflict and not dealing with the majority.”
Speaking ahead of the panel session, Charles described the development of Toowoomba and the Surat Basin (located in southern Queensland). He spoke with optimism of the region’s potential to become a major regional transport, food production and manufacturing hub because of current and planned investment in air, rail and road that will improve access to export markets.
Charles also spoke of government investment that will improve road and rail infrastructure, turning Toowoomba into an eastern Australian inland port.
He cited government plans to build a Melbourne-to-Brisbane rail line with the potential to run through Toowoomba and improve the current rail service that is poorly utilized. Once completed, trains would be using the line by 2023 at a total cost of $10 billion.
“That’s a really important piece to the puzzle and we’ve seen two intermodal facilities built and 12 transport logistics companies buy land in the last 12 months in Toowoomba,” Charles said, pointing to the confidence business has that the rail line will go through the town.
Most exciting is Toowoomba’s Brisbane West Airport, the first Australian airport in the last 50 years to be privately funded, built and operated. A first for regional Australia, the airport connects the region to Asia and the rest of the world via a weekly freighter service to Hong Kong via Cathay Pacific.
“Toowoomba has a lot of intensive agriculture, including beef, poultry and pork, which we see a whole range of future scenarios where it can be value-added and air freighted around the world,” Charles said.
He also pointed out the positive impacts of the investment in creating jobs, saying in 2011 the region was reeling from job losses in food production and manufacturing.
“We think the improvements in infrastructure will replace the jobs lost and more infrastructure does indeed build prosperity,” Charles said.
In addition to the transport infrastructure, a milk factory will be built to revitalize the dairy industry that has been in decline since deregulation. When completed, the factory is expected to produce 200,000 liters of fresh milk weekly and 30 million tins of infant formula annually destined for China and other parts of Asia.
Outside of the information sessions, the event housed a trade hall with more than 200 booths and exhibitors putting forward the latest in technology and information for the industry.