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ANZ Insight – Change Brings Challenges & Opportunities

Without doubt, a rapid period of change is coming – creating both opportunities and challenges.  Where a business goes in the future, will depend on mindset, says ANZ’s Agri Economist Susan Kilsby.

“It’s happening across the world. Everything the primary sector is feeling burdened over, can be turn to your advantage in the future by thinking about what the world wants.”

Consumers are caring more about where food is coming from and how it is being produced.  “In a wider-world sense to, looking at businesses in general, it’s not only about making a profit, but how we are making a profit, so everything needs to be done in a more sustainable way.

Increasingly businesses are including ESG (environmental, social, governance) reporting because they are thinking about these critical factors in a longer term.

“It’s also happening at a farm and orchard level, where once it was about the quality of produce that came out the gate, it’s now about treating the environment, animals kindly and your staff well, which can be the difference in a competing market.”

Adding value will be in connecting this with consumers’ needs.  Susan sees this as two-fold. Firstly in having the data and information to prove what’s happening, but, what she believes is going to make the biggest difference around price, are then the stories that come with it and how these resound with people’s emotions.

“Technology will play a significant part in story-telling and connecting to the global audience. While we’ve seen marketing at a country-wide and large corporate level, it’s going to start getting right back to individual farms and were sharing their own stories really well results in being rewarded top dollar.

“It might become as simple as making an online post once a week about what’s happening on the farm, that captures interest and creates a whole group of social media followers who then go out and buy that farm’s own brand of produce,” she says.

ANZ Regional Manager Marcus Bousfield highlighted a recent example of a young and very popular social media influencer in Holland who was looking for carbon neutrality in purchasing food.

“While not every market is looking for that yet, eventually there will be an expectation that it comes with the territory.

“So it’s important to know what’s relevant if you are exporting to a particular part of the world – is it premium taste, coming from a clean and trusted source, or do they have a carbon neutral food sources,” he says.

Where Susan sees huge potential is in the crossover between the primary sector and tourism industries. “In a region like Hawke’s Bay we could get real traction is in these two areas working more closely together.

“We’re are not yet making the most of these real synergies of opportunity around farming and how we’re improving water quality and highlighting these as attractive places to visit and experience.”

“Hawke’s Bay is in good shape with a lot of diversity across the primary sector.  While, the region’s  GDP, per capita, traditionally tracks lower than the national average, in last few years the rate has been as strong as the national growth – and the region’s closing that gap.

“But the reality is there is still a lot of environmental areas to improve on and these challenges are happening all over the world.

“The real messages we’re hearing are coming from the market, not Government, and if we don’t move quickly, unfortunately we’re going to be left behind.”

Marcus says succeeding generations are coming through and driving business with a lot of positivity and they’re looking for ways of being proactive.

As a bank, he says, the ANZ relationship team is out in the field asking those important questions around risk assessment, environmental and sustainable planning  so individual business are set up in the right way.

“We understand it’s heading in this direction so we’re helping get farms and businesses “future ready” to be as resilient as they can to meet the ever-changing needs of the consumer, the environment and financial world”.