skip to content1
Just a heads up, our Internet and Mobile Banking will be offline for scheduled maintenance between 12:00 am & 8:00 am on Sunday, 26th of June 2022.
We apologise for any inconvenience.

Scam Alert: New Zealanders are being targeted by phone scammers. Don’t let anyone who calls you unexpectedly encourage you to install software to provide access to your device. Click here to find out more.

We are experiencing some issues with the Rabobank Online Savings mobile app which means it is unavailable for some Apple users.

“Tailored-origin stories” crucial to connect with overseas consumers – F&A research head tells dairy industry

New Zealand dairy has a strong “origin story”, but it must be continually adapted to align with the preferences of consumers in key export markets, according to the general manager of RaboResearch for Australia and New Zealand Tim Hunt.

Speaking to dairy farmers and industry stakeholders at the Pasture Summit conferences in Hamilton and Ashburton late last month, Sydney-based Mr Hunt said the preferences of food consumers around the world were changing and it was important New Zealand dairy producers closely monitored these trends.

“It’s essential New Zealand dairy keeps a close eye on new consumer food trends and how different global industries and companies are tapping into them,” he said.

“New Zealand dairy products can have the one origin story, but to drive downstream value, this story needs to have a mix of attributes which can be emphasised to fit what’s valued by the customers in the markets the products are being sold.”

Connecting with consumers now more complex

Mr Hunt said while strong origin stories – which essentially define the provenance attributes and values of the source country or producer – were essential for food products, it was becoming more complex for food producers to connect with customers.

“Consumers increasingly value attributes that are not self-evident at the point of purchase, such as sustainability of the product, animal welfare and fairness,” he said.

“But in order to pay more for these attributes, consumers require trust or proof of any claims made about the product. And this comes at a time when trust in large companies and regulators is in decline.”

Mr Hunt said with faith in major companies fading, consumers were increasingly using social media and other technology to source information on food products.

“Social media is changing the speed of brand development, while technology is increasing the ability of consumers to trace product,” he said.

“In Australia, for example, there is now an App that allows consumers to scan a carton of eggs in the supermarket and see independent data on hen stocking rates – with the option to share that information via Facebook, twitter or WhatsApp. And this is materially impacting sales of free range eggs.”

Telling NZ’s story

Mr Hunt said the complexity of telling New Zealand’s origin story was increased due to the country’s reliance on export markets and the fact consumers in different markets prioritise different product attributes.

“New Zealand dairy producers are in an almost unique position globally – they’re facing higher environmental standards that are being set by the community in which they live, but, with over 90 per cent of New Zealand dairy product exported, they’re selling the vast majority of these products into a different consumer base than the one in which they operate,” he said.

Mr Hunt said the food attributes valued by overseas consumers differed from market to market, as illustrated by a look at consumers in two of New Zealand’s most important export markets – the US and China.

“In the US we are seeing a strong trend towards seeking out more natural, less industrialised food with this being shaped by an ongoing narrative in the media that the food supply chain in the US is unhealthy or unfair,” he said.

“In China, however, the priorities are very different. Food safety and quality remain the major attributes Chinese consumers are looking for, primarily as a result of ongoing supply chain scandals, devastating local pollution and mistrust of domestic media sources.”

While China valued many of the attributes New Zealand products were able to deliver, Mr Hunt said a further challenge for New Zealand was China’s low interest in point of origin sustainability.

“As evident by Chinese consumers’ limited use of certified sustainable palm oil compared to most western markets, offshore sustainability is not a major focus for Chinese consumers at this point in time,” he said.

“This is a hard reality for New Zealand producers as it illustrates the difficulty the industry faces to monetise the higher environmental standards that are being demanded in this part of the world.”

How can NZ capitalise?

Mr Hunt said there were important implications for New Zealand food producers from the shifting landscape into which they sell their products and the diversity of their off-shore markets.

“One of these is the importance of tailoring the message to the market,” he said

“So when you’re going into China, highlight the safety and traceability story, as you go into the US, play more on the non-industrial element.”

Mr Hunt said another key consideration was the importance of progressing trade relationships in markets where sustainability attributes were more highly valued.

“Sustainability is high on the agenda of consumers in markets such as the UK and continental Western Europe,” he said.

“And with this being the case, the negotiation of free trade agreements with these markets following Brexit will be of huge importance.”

Mr Hunt said a further implication, based on recent offshore experience, is that while New Zealand’s pasture-based production and sustainability attributes are valued traits, they are not necessarily enough to attract a price premium on their own.

“Evidence from a number of global markets suggests these attributes need to be sold as part of a wider package of attributes in order to command a price premium,” he said.

“Alongside New Zealand’s pasture-based production and sustainability attributes, other attributes such as innovation, quality, packaging and traceability aspects will also be required to convince consumers to pay more.”

Finally, Mr Hunt said, the changing consumer landscape reinforced the importance of delivering on any promises made to the customer.

“To derive enduring value, New Zealand’s dairy farmers need to define terms with their customers in overseas markets, meet those terms and then prove they have been met.”

“If New Zealand dairy is claiming to be 100 per cent pasture based, then the industry needs to stick to that by the letter. If the industry is claiming high levels of animal welfare, then industry participants absolutely must stick to the required practices,” he said.

“It takes a long time to build a strong origin story. New Zealand’s is strong already and can continue to strengthen, but it can be quickly undone through non-compliance malpractice, particularly in the age of social media.”

Click to download image of Tim Hunt.

Rabobank New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 39 countries, servicing the needs of about 8.4 million clients worldwide through a network of close to 1000 offices and branches. Rabobank New Zealand is one of the country's leading agricultural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 32 branches throughout New Zealand.

Media contacts:

David Johnston
Marketing & Media Relations Manager
Rabobank New Zealand
Phone: 04 819 2711 or 027 477 8153

Denise Shaw
Head of Media Relations 
Rabobank Australia & New Zealand 
Phone: +612 8115 2744 or +61 2 439 603 525