Price vs principle

Federated Farmers has welcomed research by University of Otago’s Associate Professor John Knight and colleagues, about consumer preferences in New Zealand’s largest European export market.

“This University of Otago study has taken a big pin and stuck it straight into a balloon full of assumptions that may have New Zealand dangerously straying down the wrong track,” says Don Nicolson, Federated Farmers President.

“This is not ‘buying intentions’, but what consumers actually bought and there’s a huge difference. I’d go so far to say that if expanded upon, research like this may provide the empirical evidence we need to strategically plan for future profitability.

“Associate Professor Knight’s research indicates that as a country, we’ve confused ‘nice to haves’ with ‘must haves’.  That was rammed home to me in April when I compared our farm gate returns with those of Paraguayan farmers.  We’ve jumped every hoop to ever lower profitability. . .

“If we take this research at face value, 69 percent of UK shoppers motivation for buying can broadly be described as a combination of ‘value for money’ as well as seeking out a ‘reliable brand’.

“If this research was verified by further research then the opportunity to add value is through branding and the variety we offer.  This accounted for 23.5 percent of the buying motivation for those surveyed.

“This has potential implications for brand development around the provenance of our animal breeds and the way our regions influence taste profiles. . .  

“Made in New Zealand is not enough to get our goods into a supermarket trolley, because less than 5 percent of shoppers surveyed raised this as a factor.  That’s a true revelation.

“This research raises big questions about the assumption of high value niches being pushed by armchair exporters.  It’s a potential cul-de-sac that sounds great in print but doesn’t register where it really counts – the supermarket tills.”

In a contest between price and principles only the wealthy can afford to pay more, and not all of them choose to.

Anecdotal evidence of this was provided in the wake of the shock-horror story on pig farming last year.

Sales of pork, bacon and ham went down immediately after the story broke but returned to pre-story levels in a few weeks.

This doesn’t mean we shouldn’t do our best to produce healthy food in a sustainable way. The research shows brand is important and this is part of our brand.

But we also have to be mindful of the importance of value for money. It’s no  use having the best produce in the world if too few people can afford to buy it.