Innovation lead at Silver Fern Farms Nick Rowe believes the red meat industry can flourish if challenges are met. Photo / FoodHQ
Innovation lead at Silver Fern Farms Nick Rowe believes the red meat industry can flourish if challenges are met. Photo / FoodHQ
Opinion by Vincent Heeringa and Dr Victoria Hatton
Based on interviews with Nick Rowe, innovation manager at Silver Fern Farms, chief executive and founder of Opo Bio, Dr Olivia Ogilvie, Dr Irina Miller, co-founder of DaisyLab, principal futurist at The Future Market, Mike Lee, and independent consultant Dale Bower, formerly of Wellington’s Development Kitchen.
THREE KEY FACTS
The red meat industry faces challenges but remains optimistic about sustainability and growth opportunities.
Industry leaders emphasise “nature-positive” practices to enhance sustainability and profitability.
New Zealand aims to elevate its food brand, emphasising flavour and innovation to compete globally.
This article was first published in November 2024 by FoodHQ, written by Vincent Heeringa and FoodHQ chief executive Dr Victoria Hatton.
In Red meat challenges: Tech, environment, demand and China, Tony Seba, the futurist from RethinkX (which predicts the collapse of traditional agriculture in the 2030s), said, “Just a small fall in profit can lead to extreme financial challenge across the sector and challenge the future viability of this sector for many.”
“I do believe that not only can we survive, but we can flourish if we respond correctly,” said Nick Rowe, innovation lead at Silver Fern Farms, the largest red meat processor.
“Despite the challenges that the sector faces – especially from an environmental point of view — most people still eat red meat as a part of their diet through the week.”
US researcher and futurist Mike Lee said the demand for protein continued unabated.
“I don’t see any signs of it slowing down.
“When I started in the food industry in 2007, it was a trending topic, it hasn’t slowed down at all.”
Lee has worked with Beef + Lamb and has visited New Zealand many times.
“Protein is a slam dunk, and as a mega-trend, it’s obviously very relevant to New Zealand’s food sector.
“New Zealand is so heavily indexed around the protein – but you’ve got to figure out what your conversation is.
“I’m a firm subscriber to the view that it’s not so much that red meat is bad, it’s just badly grown and badly served. How can New Zealand do it well?”
Optimists see four ways to build on that opportunity and transition to a more sustainable, profitable future.
The first opportunity is to drive sustainability beyond the idea of simply doing “less harm” to being a positive force for people and the planet.
Call it regenerative, call it biological farming, Silver Fern Farms calls it “nature positive” – a programme of on-farm practices, quality assurance and consumer branding.
“It’s a really big focus at the moment,” Rowe said.
“We launched into the US with a branded retail programme in 2018, that was our first Silver Fern Farms branded product in a US supermarket actually, and then, a couple of years ago, with our Net Carbon Zero by Nature product portfolio, which was an intentional shift to lead with sustainability attributes for consumers to eat premium red meat.”
Rowe claimed it was working. Early signs show that the meat attains a higher premium and plays well with major clients such as supermarkets and volume producers of ground beef.
It aims to create positive effects on-farm, rewarding farmers for management practices such as encouraging native bush regeneration, fencing waterways, riparian planting and increasing farm biodiversity.
The bush gives the sector an asset base to leverage for carbon and biodiversity credits and a powerful marketing story to fit its ambition “for clean freshwater around farms, for the sector to be carbon neutral by 2050, for sheep and beef farms to provide habitats that support thriving biodiversity, and to support healthy productive soils,” Beef + Lamb said.
Rowe said the future of Silver Fern Farms relied on that transition.
“The fact is, until there are methane reduction tools widely used across the sector, red meat will always be a carbon intense food choice.
“Through our Nature Positive platform, we remove the carbon liability of the product, from cradle to grave, through on farm woody vegetation that sequesters that carbon.
“Over time, we will expand beyond carbon, enabling restorative farming practices such as soil, biodiversity and waterway health improvement to become part of our story.
“If we can get to the point where we can prove to people that when they purchase a product from Silver Fern Farms, they’re contributing directly to better farm outcomes, that is generating profit for communities and ecological good, this will help support the growth of our global premium red meat brand and return additional value to farmers.”
The industry is pushing back on health criticism as well, arguing with nutritional science about the benefits of animal protein over alternatives.
With support from the Riddet Institute in Palmerston North and Professor Derrick Moot of Lincoln University, Beef + Lamb is on a major offensive to prove the longevity of meat-eating in human evolution and the health benefits to all ages when consumed in the right proportions and at the right time.
“Meat is a rich source of many key nutrients, including protein, iron, zinc and vitamin B12,” it said in a 2020 report.
“These are particularly essential in the diets of population groups with higher nutrient needs, including children, adolescents, pregnant women, athletes and older adults.”
“For those who only eat beef or lamb as their red meat choice, this is well below the recommended red meat intake of 350-500g per week advised by the Ministry of Health and World Cancer Research Fund.”
Food as soft power
A second opportunity for red meat is to elevate the emotional pull of New Zealand food so high that it becomes a form of soft power.
Think of New Zealand food as a brand competing with Italy or Mexico.
That requires more than sustainability and efficient production systems. It requires a love affair.
“People don’t lean back after a delicious meal and say, ‘wow that was so sustainable’,” Lee said.
It’s all good, but it’s not good enough, Lee said.
“There’s a lot of farmers in Italy that could say the same things that you guys say, about how you farm the land differently, take care of your livestock, and families and communities too.
“They say, ‘our cheese is great. Our cows are great. Our wine is great. All that stuff happens in Italy and France, too.
“New Zealand’s doing a really good job growing its food, and there’s a good story there. I think the missing link is repositioning New Zealand as a culinary centre of the world.”
Lee invoked the story of Noma, the renowned restaurant in Copenhagen.
“No one paid attention to Denmark as a food destination before Noma.
“A lot of its food scene was just people trying to do other popular European food, and then Noma comes along and has the radical idea to raise the flag for Denmark.
“It worked insanely well. Look at the number of ambitious, pedigreed chefs it spawned, colonising other parts of the world.
“Denmark cuisine is on the map. I’m not saying you must execute a Noma copy, but you need something that puts New Zealand on the map.”
Beef + Lamb is awake to the challenge.
Its 2023 futures report drew a comparison with the explosive growth of South Korean pop music and film over the past decade. It wasn’t an accident.
“In 2001, South Korean President Kim DaeJung called out the export of the country’s popular culture as ‘an engine of economic development that creates high added value with relatively little investment of resources compared to industrial development.‘”
The report also noted the success of Global Thai, launched in 2002 – a government-led culinary diplomacy initiative designed to boost Thailand’s overall brand equity as well as its food exports.
“As a result, Thai food is now one of the most influential cuisines in the world, creating opportunities for Thai businesses everywhere in the world, as well as markets for the country’s agricultural exports.”
Mexican food is now protected by UNESCO as an Intangible Cultural Heritage of Humanity, enshrining it as one among an impressive list of traditions to be protected and celebrated for all time.
What’s New Zealand’s food story? Do we have a place in the sun? Is there a food equivalent of the Lord of the Rings? And can it be our own this time?
“You need something that becomes the salesperson for New Zealand food before you even enter the supermarket with your beef and lamb,” Lee said.
Innovation and entrepreneurship
Whatever the New Zealand food brand is, it can’t simply be manufactured like a made-to-order meal. It will come from a culture of experimentation and entrepreneurship.
Noma is an example of the unpredictability of success. But Lee argued it could be fostered: “The more I practise, the luckier I get.
“Maybe you all team up and renovate a neighbourhood to make it kind of a foodie paradise. How do you duke the incentives to make it so that you have a higher likelihood of the next Noma appearing organically in New Zealand, right?
“You need a big war chest to do it, and there’s no guarantee. I think maybe it’s a public-private partnership – team up together and expand the addressable market for all the different things that you do, make the tide rise for everyone.”
Our historic strengths hint at where the effort should be put — science-informed, built on te ao Māori principles, spirited in tone and sourced from pure, local ingredients.
We could lead the South Pacific fusion movement, with the likes of Monique Fiso, combining her passion for foraged food with haute cuisine and te ao Māori.
Or Dale Bowie of Wellington’s Development Kitchen, whose wacky combinations include offal and seaweed ice cream.
Bowie, an understudy of experimental UK chef Hester Blumenthal, argued that flavour was the hero ingredient missing in the New Zealand food story.
“I’m a huge advocate of our story. Look at carbon zero; look at sustainability, for sure. But when somebody puts something in their mouth and goes, ‘that’s the most delicious thing I’ve ever had,’ that is where I say it’s a no-brainer.
“So, for me, I think the flavour is as important, if not more important, as the story. And I think one of the things that we lack as New Zealand is a focus on really making sure the flavour is where it should be.”
It’s disappointing that Bowie’s Development Kitchen and Fiso’s restaurant have both closed – a reminder that even if we are innovative, we also lack the capital and support to scale.
Science will most certainly play a key role if red meat is to survive.
A good example is Lumina Lamb, which bills itself as the “world’s best lamb” and is the result of a government-funded, 15-year research programme to enhance the omega-3 content of lamb.
The meat is produced as a joint venture between processor Alliance and a farmer’s collective Headwaters and is fetching both a premium offshore and support from chefs for its flavour and story.
Industry leaders are also looking at the cultured meat and PF technologies not so much as a threat, as described above, but as an opportunity.
They see a future where the new protein sources coexist alongside conventional farming, supplementing off-season and weather-related downturns and providing low-cost alternatives, leaving the premium to the sustainable, nature-positive farmers.
Think of it less like the digital camera killing Kodak and more like Spotify co-existing with concerts and music festivals.
One is convenient, accessible and ubiquitous. The other is experiential and premium.
“I see cultivated meat as an ‘and’ not an ‘or’ and not something that will replace meat within our lifetime or within the foreseeable future,” said Olivia Ogilvie of Opo Bio.
“Maybe it will start eating into heavy feedlot systems. High-intensity agriculture is never going to be good for the environment or the animals within it. So, if there is going to be any replacement, it would be in those kinds of intense, ethically questionable, environmentally damaging systems rather than grass-fed systems like we have here in New Zealand, which are very different to like 99% of the animals overseas.”
Irina Miller, co-founder of PF start-up Daisy Lab, is also downplaying the threat to conventional proteins.
“We actually need the dairy industry to scale up. There simply isn’t enough stainless steel for PF to create the volume to replace it. So, I see us working collaboratively with the likes of Fonterra and Tatua to supplement their business, not replace it.”
Innovation will also fuel the relentless pursuit of productivity that has made the “volume to value” story so successful in the last 20 years.
This is especially true as herd sizes are predicted to shrink. We need to make more from less.
According to Beef + Lamb’s future report, more than half of the cow goes towards uses other than meat consumption, creating more than 350 co-products. But these co-products only account for 11% of the total value of the animal. What if these co-products generate more revenue for processors and farmers than meat?
The report states: “Studies have shown bovine co-products to be excellent sources of nutritive proteins, minerals and vitamins, creating growing demand within the fields of medicine, pharmaceuticals and cosmetics. Bovine foetal blood, for instance, can be made into a serum that sells for as much as $900 a litre, generating $900 million for the US pharmaceutical industry. In high-stakes sectors like medicine, co-products from New Zealand livestock have a distinct competitive advantage, given the country’s pristine environment and geographic isolation from diseases that plague cattle in the rest of the world.”
New Zealand Pharmaceuticals in Palmerston North has already started creating value from the by-products of animals.
Did you know that New Zealand dominates the US$4 billion ($7b) market for replacement heart valves, exporting US$168 million worth of disease-free pericardia from its cows in 2018? Me neither.
The Beef + Lamb report said: “This advantage will continue to work in New Zealand’s favour should it decide to go into cell-based cultured co-products, as it can claim better-quality ‘starter cells’ as a point of difference. There is an opportunity to hedge against any potential decline in global red meat consumption by proactively diversifying and even re-centering the industry around co-products that might command higher margins.
“The challenge for processors is to go beyond responding to existing demand, to understanding the drivers of demand, so that New Zealand becomes the first to identify new, financially lucrative uses for co-products.”
Markets and global shifts
While on the one hand recognised as a storm, trade could also be the final piece in the red meat recovery.
In the last five years, New Zealand has inked new Free Trade Agreements (FTAs) and bi-lateral agreements with the UAE, UK and EU and joined the Asia-Pacific Regional Comprehensive Economic Partnership (RCEP), the largest trade agreement globally.
No one wants to estimate how much value FTA’s will add to the sector. But these agreements will make it easier for premium New Zealand red meat to land on the shelves, with estimated savings that come from the scrapping of entry tariffs: ultimately making New Zealand meat more competitively priced on supermarket shelves and restaurant menus.
With the EU FTA, New Zealand will have eight times as much beef access into the EU as it currently does. There are few better ways to create more from doing the same.
While China and the US remain important markets, opportunities exist beyond, with new relationships forged during the Covid lockdown.
For example, beef exports to Vietnam grew 25% per year since 2020 (albeit off a small base). Similar growth is predicted for Thailand and the Philippines driven by urbanisation, rising incomes, and an increasing preference for Western diets.
Is it time to put on the wet weather gear and head into the storm? Photo / FoodHQ
Conclusion
There’s a conversation in the movie The Shipping News where Quoyle, the main character, and Billy, an old newspaper hack from Newfoundland, consider dark clouds on the horizon.
