IF ever proof was needed that quality, and farming sustainability, will shape the future of beef production, it’s Milan’s Supermarket of the Future.
With interactive tables allowing customers to hold up an item to a screen to immediately access a wealth of information including origins, nutritional facts, the presence of allergens and even how to best cook it, the new-age store, owned by Italy’s largest supermarket chain Coop Italia, opened six months ago.
Meat and Livestock Australia’s Michael Crowley says its success paints a clear picture for Australian beef.
“The consumer of the not-too-distant future will want to be able to pick up beef, hold it up to a screen and know everything about it,” he said.
“They will want details on who raised it, where it was from, how it was fed, what the inputs were and much more.”
Australian beef needs to be thinking very much about moving beyond the commodity trade, about how it “gets the consumer in the room and makes sure we deliver something that meets their expectation,” he said.
That, Mr Crowley argues, is not only the path to delivering more value to the farmgate but the only way Australia can remain at the forefront of a very competitive business where other beef producing nations and other proteins are in top form.
It’s why meat eating quality needs to be at the fore.
Mr Crowley, MLA’s producer consultation and adoption general manager, was speaking at a producer forum held in conjunction with the meat quality eating program Meat Standards Australia (MSA) annual producer excellence awards at Gympie, Queensland, this week.
He said the fundamentals of the global beef market were shifting and while much of that was to Australia’s advantage, the key point was that we don’t want to be competing on price and quality was our point of differentiation.
Free Trade Agreements in recent years had changed, in a significant way, our ability to compete in global beef markets, he said.
“We have a much larger percentage of access of chilled product into global markets than our competitors,” Mr Crowley said.
“We have the ability to target consumers who are willing and able to pay more.”
Last year, the United States, Korea and China were Australia’s largest beef export markets, while the European Union was the highest on a price-per-kilogram basis, he said.
“Prior to the Korean FTA every kilo of beef we sold into this market attracted at 40 per cent import duty,” he said.
“That is now going down to zero.
“We are the only country with an FTA with Japan. This year we will have an 11pc tariff advantage against the US here.
“In China, our tariff is going from 12pc down to zero.
“These are game changers. Each of those three is worth a billion dollars to our industry.”
The possibility of a Trans-Pacific Partnership (TPP) agreement going forward meant even further advantages in Japan, along with Canada and Mexico and the opening up of a brand new market in Peru.
Brexit was also opening up opportunities to go beyond the volumes Australia was currently supplying to Europe, which are heavily limited by quotas.
“Europeans eat around 8m tonnes of beef per annum and produce only 7.6t so there is significant opportunity there,” Mr Crowley said.
However, it’s not all rosy on the global front.
It’s a very competitive environment.
“Brazil is a remarkable producer of beef, with big advantages via currency,” he said.
“They have just regained access into Saudi Arabia and they now have direct access to China and the US.
“We have 26m head of cattle, they have 200m and are talking about growing that to 220m over the next five years.
“And processing costs in Brazil are a third of what they are here.”
All that reinforces the point Australia can’t compete with Brazil on price, according to Mr Crowley.
“We have the best market access in the world. We have to defend that,” he said.
“And we have to set ourselves apart in quality.”
Mr Crowley believes the growth of MSA will be driven by the international scene.
“The opportunity is for us is to communicate the quality message to international markets,” he said.