Australia’s trusted position as a leading source of safe, clean, quality food faces some serious perception challenges as many consumers grow more cynical about how food companies and farmers are delivering the goods.
Despite our advanced farm-to-fork traceability systems and the popularity of pristine Australian and New Zealand farm sector exports, particularly among Asian shoppers, fast evolving marketing channels and new technology could see outside forces take control, guiding consumer sentiment towards much more challenging market environments.
In a warning pitched to food and beverage business leaders and farmers, Rabobank analysts have pointed to destabilising food discussion themes and shopping trends in China, North America and within Australia.
They have urged producers and processors to be more alert and responsive to the the signals.
Australian agriculture and food businesses need to harness our trust or lose out – someone else will take control and start telling our story.
“Trust is incredibly important to our industry, and traditionally we have done well on consumer trust,” said Rabobank’s Australia and NZ head of food and agribusiness research and advice, Tim Hunt.
“But agriculture is now selling into new markets, to people with new values and access to new technology to help their decisions.
“Australian agriculture and food businesses need to harness our trust or lose out – someone else will take control and start telling our story.”
Addressing a Sydney forum with Rabobank’s New York-based senior consumer foods analysts, Nick Fereday, and Shanghai senior dairy analyst, Sandy Chen, Mr Hunt said while global food demand was rising fast, exporters must work much harder to prove and deliver their promise of safe, good quality food.
This was especially the case if consumers were expected to pay premium prices for trusted Australian products.
The cage egg and free range hen stocking rate debates exemplified how local farm production values were increasingly dictated by sentiment and trust expectations from some consumer circles.
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Reflecting the changing overseas mood about the goodness and trustworthiness of food and the transparency of the food industry in general was an array of film and documentary productions released in the past decade.
These productions cast real doubts about sincerity and fairness of “big food” to its consumers, employees and suppliers; the nutritional value of many food products, and, the environmental cost of today’s farming practices.
The rising cynicism of food industry critics is highlighted by the US documentary `Fed Up', which carries the title tagline `Why Congress says pizza is a vegetable'
Acclaimed titles such as “Supersize Me”, “King Corn”, “Farmagedon”, “Cowspriacy”, “GMO OMG”, “That Sugar Film”, “Harvest”, and “Sushi: The Gobal Catch” had tapped into various modern consumer concerns on health, corporate power and ecological destruction.
The film themes ranged from America’s heavy dependence on corn monoculture cropping systems and corn-based products, through to mistreatment of workers in global food supply chains, the struggles of family farmers against corporate agricultural growth, and excessive levels of extra sugar, fat and salt in modern food products.
Mr Hunt said the rising cynicism of food industry critics was particularly well highlighted by the US documentary “Fed Up”, which carried the title tagline “Why Congress says pizza is a vegetable” (apparently tomato-based toppings enable pizzas to qualify as a healthy lunch offering in school canteens).
Room for food improvement
Mr Fereday noted there was certainly room for improvement in the US food sector, with 40 per cent of Americans now officially considered obese because the nation had been “eating as if health care was free”.
For the first time since the Second World War big name food brands had lost consumer loyalty and sales to “hip” new players, including e-commerce retailers such as Amazon.
They promised food lines with a host of fair trade, environmental and healthy eating credentials, and they were transparent about backing up their claims.
However, traditional giants, including Nestle, Danone, Kraft, Campbells, Tyson Foods and General Mills were responding to changing consumer priorities, too.
They were also culling problematic ingredients to restore trust, and seeking out accreditation for their own business transparency strategies, including “badges of honour” for workforce diversity, supply chain sustainability and fairness.
Nestle recently quit the North American candy market as it repositioned itself with a stronger focus on health, wellbeing and nutritional snack lines.
Big Food’s reputation lifts
“The latest survey from the US Reputation Institute actually shows food companies like Campbells and General Mills on the rise, while the recently popular names like Amazon and Google slipped lower on the list,” Mr Fereday said.
“Many smaller family food businesses probably already qualify for these badges of honour, too, but they haven’t felt the need to boast about it too much in the past.”
Mr Hunt said while consumers should be well informed about nutrition flaws and poor or unfair supply chain processes, the food and agribusiness sector had to recognise where to take initiatives to rectify and promote the right food stories.
“We need to take advantage of technology and market opportunities to establish trust mechanisms which will retain that trust with our valued customers”.
In the booming China market, Mr Chen said consumers still mostly wanted reassurance about food product source of origin.
They were increasingly relying on credibility assurances made via online retail platforms such as Alibaba and Amazon, rather than China’s government controlled mainstream media services, considered less believable.
Chinese substitution fears
Although the safety of Chinese food products had improved significantly, the melamine in milk powder scandal 10 years ago and other food substitution scares had “burnt deeply in consumers’ minds”, reinforced by a recent reports of fake vaccines sold by a large medical sector company.
Chinese dairy brand reputations continued to struggle against imports.
Nutritional formula powder sales sourced from trusted, environmentally clean overseas suppliers grew 30pc in three years.
China’s top six overseas suppliers of infant formula, including NZ and Australian brands, had captured almost half the baby formula market.
Mr Hunt said the value in the trust placed in Australian and NZ dairy and food provenance should not be underestimated, or taken for granted.
He noted how major airports in both countries were unusual on an international scale given the amount of milk powder and honey on sale to Asian tourists.
“To these consumers think we really do live in lands of milk and honey,” he said.
“And they’re want more than just safe products – they put great trust in buying the clean, premium quality food production story behind these foods.”
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