The reasons behind the trailblazing carbon neutral beef brand Five Founders are straightforward: diversifying customer base, stabilising commodity price fluctuations and in recognition of the growing desire of consumers to understand what happens behind the farmgate.
The pathway to achieving it is far more complicated but forward-thinking large cattle operation North Australian Pastoral Company gave a good overview of the journey at a recent national agricultural conference in Canberra.
The brand, which is coming up to its first birthday, is based on three pillars: whole-of-life ownership, animal welfare and environmental sustainability.
NAPCo says between those three things, it feels it can tell a good story.
Five Founders was held up as pioneering work in the field of producing and marketing beef in both a challenging climate and an era of fast-emerging new consumer demands at this month's ABARES Outlook 2020.
Agriculture's carbon footprint, and the red meat industry's bold bid to be carbon neutral within ten years, was a hot topic.
NAPCo's corporate and commercial general manager Stephen Moore spoke about why what is essentially a cattle company would go into branded beef.
NAPCo runs around 200,000 head on 6.1 million hectares across 14 properties in Queensland and the Northern Territory.
Composite breed cattle are born and raised on northern properties, once weaned they are backgrounded throughout Queensland for around 12 months and then taken to the company's Wanui feedlot in the Darling Downs for a 100-day finishing phase.
"We have two major customers we supply most of our cattle to and even though we have very good relationships, that is a bit of a risk for us," Mr Moore said.
The brand move was also to take some uncertainty out of returns to shareholders.
"Commodity prices fluctuates wildly and we feel a branded program, built over a period of time, can flatten that out a bit," Mr Moore said.
"The other part to this is we felt in the market there is an increasing awareness, and want, from the consumer to learn more about what happens inside the farmgate - for information around animal welfare, environmental stewardship and traceability.
"To be able to tell our good story directly to our consumers is appealing to us."
NAPCo conducted it's own market research, to compliment industry work, and found this is what consumers wanted:
- 75pc no added hormones
- 70pc animal welfare standards
- 53pc minimal environmental impact
- 45pc traceability from birth to processing
- 34pc ownership of animal from birth through to processing.
The three pillars came out of these insights and thus began the journey to carbon neutrality.
"To start with, we measured our carbon footprint across the entire business and then we looked at what we could put in place to reduce it, offsetting the remainder of the footprint," Mr Moore said.
"We feel over time as we work on more management practices and reduce the amount of offsets, our brand will continue to carry weight."
He said emissions were skewed towards animals - diesel and fuel use and electricity were tiny compared to the footprint of the animal itself and the bulk comes from the 90,000 breeder herd.
"Genetics was a lever we were able to pull because we don't buy any outside cattle - so moving up selection of breeders for efficiency and reproductive traits," he said.
Knowing the age of animals at processing was also an important part, Mr Moore said.
"Data will play a big role in the carbon neutral journey for livestock. The more we can collect around our herd the more informed decisions we will be able to make," he said.
Renewable energy solutions such as converting diesel generators and bores to solar were made and NAPCo is now looking to take a station in the Channel Country completely off the grid this year.
Land management initiatives such as planting legumes have been trialed in Central Queensland and property development, such as decreasing the grazing radius and putting in more fencing and waters to lift productivity, are well underway. So too regeneration.
"In the future, we'll look more to things like feed additives. We believe producers have to work on the animal itself if the industry is going to get to this goal of carbon neutrality," Mr Moore said.
Will the branded beef attract a premium?
"Time will tell," Mr Moore said.
"We believe it may be that just to get into a market you might have to fulfill some of these criteria in the future.
"This is not defensive - it's an opportunity for us to articulate how well we operate."
Mr Moore also made the point that ESG (environmental, social and governance) metrics were high on the radar for those making investment decisions.
"We are having to report a lot more of this type of thing to our board and to our investors - this is becoming the norm in the investment landscape," he said.
How does that stack up against returns?
"A lot of this adds to the cost base of the business so we need to continue to find ways through R&D that will accelerate productivity and efficiency," Mr Moore said.
"But there is no doubt the ESG credentials of any business, particularly agriculture, are top of the list for potential inflow of capital."
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