Value chain design has been identified as one of the critical factors in exporting red meat to China, according to a Meat & Livestock Australia (MLA) senior executive.
Meat & Livestock Corporation (MLA) Donor Company Innovation chief executive Christine Pitt was addressing the Agribusiness Gippsland 2016 conference, in Warragul.
“We think value chain design is the most critical factor, going into China,” Dr Pitt said.
“Most of us understand, to a degree, our own supply chains - but what happens to our product, when we enter that market?
“What channels it goes through, before it finally arrives at a consumer, are a bit of a mystery to us.”
She said exporters could not afford to be complacent, particularly over Australia’s position as a “clean, green” food supplier.
“We need to move our industry from a supply push, to a demand pull.
“If we don’t do this, we will continue to be driven to the lowest common denominator, and we won’t win, I can assure you, we won’t win globally.”
She said exporters faced many challenges, and could not afford a “business as usual” attitude.
“We are actually losing market share in Asia, we are not actually gaining market share in food exports to Asia at the moment, and I think that is quite disturbing.”
Dr Pitt said there appeared to be a lack of deep understanding around what markets really wanted and productivity could no longer be regarded as the backbone of growth.
“Growth in our sector has been exponentially driven by productivity gains, but productivity gains in our industry are no longer underpinning our competitive advantage - relying on productivity, whilst it is really important, will not be enough.”
The MLA’s Donor Company had formulated a China Insights strategy, to look at potential high growth opportunities, which moved the focus away from commodities.
“That’s not where we are going to capture the value,” Dr Pitt said.
The MLA had done work on issues such as what made certain Chinese cities attractive.
“We are just about to launch a toolkit, into which you can input your own information as to the best place to grow your business.”
The other area where the MLA was working was in the area of combating food fraud and scandals, with its Food without Fear plan.
Dr Pitt said 58 per cent of Chinese consumers “constantly state” they wanted to find healthy, safe food, to feed their families.
“With increasing levels of pollution, they are starting to be much more concerned about the provenance and environmental credentials of what they eat,” Dr Pitt said.
“It’s probably not driving a premium at this time, but certainly something we can look at in the future.”
The campaign would involve greater traceability, smart packaging and anti-tampering and anti-fraud devices.
But she said Australia was naïve to think Chinese consumers would always see Australia as the primary source of clean, green and safe food.
On a recent visit to China, she said she had seen Uruguayan, Canadian and New Zealand products, which had the “same value promise” as Australia, but were cheaper.
