Dialogue: Food industries must grab this opportunity

In a world craving clean, safe food, New Zealand must do all it can to become the first country to boast an Eco label for its produce, writes DAVID IRVING*.

Every news broadcast these days refers to the frightening effects of the foot-and-mouth epidemic that has consumed the British Isles and parts of Europe.

Where from here? This is a desperate situation for the farming industry worldwide because no one can be sure they won't be next. Add to that the lingering effects of BSE (mad cow disease), E. coli outbreaks, and the doubts over genetic modification, and you have a food industry in disarray as consumers question food safety and voice health concerns.

It became clear just how important our food exports were when the Government quickly became involved in refuting overseas claims about our meat industry's state of health.

Out of every problem, however, there is opportunity. The meat industry could learn a lesson from the fishing industry. A partnership between food giant Unilever and the World Wide Fund for Nature has formed the Marine Stewardship Council, which aims to promote and certify sustainably caught and processed fish.

Our hoki fishery, which is worth $330 million a year, has recently gained certification. With it goes not only the assurance of safe and healthy food but good environmental practices.

What a stark contrast this is to world meat supply. In one sector, consumers are questioning safety; in the other, they are reassured of goodness.

New Zealand's opportunity lies in our land-based industry following in fishing's footsteps. Imagine the long-term commercial advantage - sustainably produced New Zealand food could stand out like a beacon in a world food industry severely undermined by safety concerns. The industry, however, has already considered such an opportunity and turned it down.

It is time to think again.

In 1993, former chief of Heinz Dr Tony O'Reilly highlighted the marketing potential offered by our perceived clean, green environment. He urged us to "package our extraordinary advantage in a way that withstands independent scientific scrutiny and captures the attention of world consumers."

That prompted Project '98, which aimed to make New Zealand the first country to have an Eco label for its food. That aim was to be achieved by 1998.

The trustees of the project included the food industry, environmentalists and non-Government organisations. The objectives were:

To obtain competitive advantage for food and beverage producers that are clean, green and safe.

A significant proportion of consumers worldwide are deeply concerned about the closely linked issues of safe food and a clean, sustainable environment. They want assurances about the product, and about how it is produced. Producers who can respond to those concerns, and can substantiate their claims, will have a competitive advantage.

To facilitate safe, sustainable and eco-efficient practices in the food industry.

By defining best food safety and environmental practices as a commercial opportunity rather than a regulatory burden, Project '98 could give new impetus to these vital issues.

To keep ahead of green barriers to trade. A number of green rules or voluntary arrangements create trade barriers to some degree or other.

In the fast-moving global trading environment, an approach that positions producers so they are uniquely able to create such barriers is more likely to be successful than a defensive strategy.

To focus science on market drivers.

By defining our green competitive advantage in a scientific way, we could provide producers with more flexibility to meet the environmental objective, while also making the label more defensible tradewise. A scientifically based label would be more credible with market gatekeepers and with consumers themselves, especially in Asia.

To build a framework for improved performance, and design a tracking system.

These ingredients are a vital basis for product certification, and also yield commercial benefits in a marketplace that increasingly requires product information.

The strength of Project '98 was that adopting higher standards of environmental care would create better products for consumers, better lifestyles for the producing community and better profits for producers.

Simon Upton, then the Minister for the Environment, recognised the benefits. The vision for his strategy was "a nation whose commitment to environment care earns it a better livelihood, lifestyle and influence in the world.

"This vision involves New Zealanders working together on environmental improvement in a way which earns us recognition as a country that produces safe, healthy and environmentally sound goods."

Mr Upton said there would be a growing and loyal worldwide commitment to our products and services, especially through strong country-of-origin brand identification and through independent certification of our products as environmentally sound. This would enhance market access, increase export earnings and strengthen tourism revenue.

Within New Zealand, furthermore, there would be heightened awareness among individuals, resource users and the community, as well as a practical commitment to better environmental practices.

The goals of Project '98 seem glaringly obvious today as we experience the environmental disasters of foot and mouth and the like. Why, therefore, did it fail?

First, there was no foot and mouth epidemic to kickstart the opportunity. Second, businesses were biased towards today's requirements rather than those of tomorrow. Third, the food industry failed to collaborate across sectors. And finally, producers were driven by the individual requirements of powerful overseas supermarket chains.

Our food exports are, by and large, commodities. They are not differentiated from competing products. Create a difference and you earn more money; be a commodity and you get no preference.

Project '98 gave New Zealand food producers the opportunity to say in their own right that our food was grown and produced to higher standards of care.

As a nation, we could have our products identified with this certification on the package at the point of sale. Our nation's standard would have earned us the money; adopting the retailers' standard earns them the money.

It should not be interpreted that the New Zealand producers turned down Project'98 because their standards are low. To the contrary, generally they are not. Indeed, there have been considerable advances, as demonstrated by the practices of, for example, the kiwifruit and grape-growing industries.

If the food industry had adopted its own Project '98, its products today would be chased by customers around the world.

An Eco label would stand out among food products in a world ravaged by environmental concerns.

This is still a big opportunity for New Zealand. The world is begging for clean, safe food. We want to preserve our environment. Our businesses want more profits.

We must lift our environmental standards of production to be better than those of anyone else, gain a scientifically valid reputation for this and market the advantages.

This will give us preference in world markets. There is a strong future for New Zealand if it adopts this position. Let's restart the sentiments of Project'98.

* David Irving, an adjunct professor in enterprise and management at Auckland University, is a former chief executive of Heinz-Wattie.