12 Dec 2016
Millennials are the largest living demographic in the history of humanity and the choices they make are influencing the way we run our businesses.
“Unlike my generation, millennials have grown up knowing about climate change, knowing about environmental pollution,” Gary Hirshberg, co-founder of Stonyfield Farm, says.
" “[Millennials] are not going to go to supermarkets and stand in lines; they pull out their phone and expect it to come to them.” - Gary Hirshberg
“They know the most powerful thing they can do is consume consciously.”
Hirshberg may be a baby boomer, he may even be an idealist, but he understands what drives a significant cohort of younger generations when it comes to the choices they make. Dubbed ‘the CE-Yo’ by American media, Hirshberg served as CEO at Stonyfield, one of the world’s leading organic yoghurt producers, for 28 years.
Under Hirshberg’s leadership, Stonyfield farm grew from a seven-cow organic farming school to a company with $US370 million in annual sales.
In New Zealand to talk to businesses about breaking into the US market, Hirshberg says New Zealand food producers are in a powerful position when it comes to how it produces food and market its unique story to the world.
“That unique story is exactly what the new emerging consumer is looking for,” he says. “Here you are a country that boasts some of the cleanest purest ecosystems on earth and the extraordinary taste that results from that. That resonates with the consumer.”
“They may not have as much money as older generations, but they want to be sure that their dollar is helping improve the world, so that becomes an opportunity for you.”
New Zealand’s red-meat sector is a good example: there is growing demand in the USA for product which is ‘free from’ - meat free from genetic modification and antibiotics, from animals grass fed and produced in a sustainable environment.
The way that meat is making its way from Canterbury to New York kitchens is a little different - via American meal kit company Blue Apron.
“Going hand in hand with these new emerging consumers, there are these new emerging channels,” Hirshberg, a father of three millennials himself, says.
He sees first-hand how consumer habits are changing.
“They’re not going to go to supermarkets and stand in lines; they pull out their phone and expect it to come to them,” Hirshberg says.
Hirshberg has recently joined the board of Blue Apron, which has the largest share of sales among American meal kit companies. The service they offer is similar to what My Food Bag offers here in New Zealand.
New channels to consumer like this are popular with tech savvy, younger shoppers wanting to make a conscious choice about what they buy.
“The box comes to you in environmentally sound packaging, there is no food waste because it’s just the portion size you need, and there is a beautiful recipe card where you can see the finished meal and how to cook it – its fool-proof,” he says.
“Above all they are absolutely committed to sustainability.”
Alongside convenience – Blue Apron’s point of difference is the commitment to building a better food system, they source sustainably grown produce, free from pesticides and hormones with a growing focus on organics.
The fast-growing American organics market is where Gary Hirshberg sees the biggest opportunity for New Zealand.
He points out while NZ’s ‘free from’ story gives its red-meat sector a competitive advantage at the moment, it doesn’t own it. If another country like Chile or Argentina can come in and offer the same thing they will.
According to the Organic Trade Association consumers across the America are eating and using more organic products than ever before. Organic sales in the US totalled around $US47 billion in 2016 up $US3.7 billion from the previous year and accounted for 5.3 per cent of total food sales.
To tap into the opportunity Hirschberg says New Zealand needs a certified organic standard, something recognised world-wide which reinforces its organic brand.
“I cannot over-emphasise the importance of one organic seal,” he says.
America’s organic industry, he says, didn’t begin to take off until they developed the government sanctioned USDA organic seal.
Organic exports from New Zealand are certified by several different third party agents approved by MPI, and while small, they are growing. Latest figures from Organics Aotearoa show exports were between $A240 million and $A250 million in value – an increase of over 11 per cent since 2012.
ANZ NZ Commercial & Agri General Manager John Bennett says exports and particularly food exports underpin the New Zealand economy, so it is critical to respond to market dynamics.
“Changing international demands undoubtedly challenge the traditional models that have underpinned the NZ food export sector,” he says.
“We continue to see more customers respond to the opportunity this creates. Whether this is by identifying specialist markets for their products, creating new varieties or products relevant to the consumer, adapting supply chains to connect more directly with the consumer or using social media to tell their story direct to market, it is ensuring they continue to be relevant and create value in a changing world. “
Bennett says this requires access to specialist market insights and connections to key players internationally.
“The real value, however, will come through increased collaboration across the sector to create a New Zealand story that will ensure the sustainability of our brand with international consumers.”
In the age of digital technology, traceability and social media, consumers are the toughest critics. Hirschberg says giving them a New Zealand brand they can recognise and trust is important.
“You’ve got an incredible story to tell, just tell it and don’t spoil it,” he says.
Briar McCormack is a bluenotes contributor
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
12 Dec 2016
21 Mar 2016