Category Archives: Beef Industry

Meat Industry – Improving Supplier Performance

Phd Thesis abstract – link to complete document

Supplier relationships and performance have become increasingly important in agri-food supply chains. This research aimed to investigate buyer-supplier relationships in the New Zealand red meat industry. Specifically, this meant examining how relationship quality, as well as supplier characteristics and relationship attributes affect supplier performance.

The analysis improved the conceptualisation of relationship quality by bringing together constructs from the relationship marketing and social capital literature. This established that relationship quality and social capital were closely related constructs.

Lincoln University PhD Thesis - Nic Lees
Lincoln University PhD Thesis – Nic Lees

By combining social capital and relationship quality this created a broader measure of the overall strength of the relationship. The findings show that improving supplier performance requires taking into account both supplier characteristics and relationship attributes. Furthermore, relationship quality played a significant mediating role between all the relationship factors and supplier performance.

The implications of this research are that there are specific ways buyers can improve supplier performance. This involves identifying and selecting suppliers who have superior ability, motivation and customer focus. They also need to avoid selecting suppliers with high levels of self-direction. Improving supplier performance also involves influencing relationship attributes and improving the quality of relationships with suppliers. In particular, processors need to ensure that suppliers experience positive value from the supply relationship. Furthermore, they need to manage the interaction between specific assets, dependence and use of coercive power.

New Zealand beef and lamb exports

How can we get more value from New Zealand beef and lamb exports?

Meeting consumer requirements means producing the right quality of product when the market requires
Meeting consumer requirements means producing the right quality of product when the market requires

The New Zealand Government’s has an ambitious goal of lifting total exports to 40 percent of GDP and doubling the value of primary exports by 2025. They have stated that this will involve developing stronger relationships with New Zealand exporters and supporting them to add and capture value from existing markets through supply chain integration, brand promotion and brand protection. New Zealand red meat exports play an important role in this as they represent 11% of total merchandise exports.

There is limited scope for increasing the volume of red meat production in New Zealand due to

Meeting consumer demand is difficult in New Zealand’s pasture based system
Meeting consumer demand is difficult in New Zealand’s pasture based system

land and environmental constraints. This means adding value to these exports is the only alternative. A significant proportion New Zealand’s red meat is still exported in commodity form and fails to achieve a premium for the attributes of its New Zealand origin. Changing this however will require a co-ordinated effort from government, exporters and producers.

Market access and promotion of the NZ Inc brand story can create opportunities for New Zealand exporters, however, capitalising on these initiatives requires companies to develop capabilities and strategies to market and deliver these products to demanding international consumers. These consumers are demanding greater variety and quality in the food they eat. They require a consistent year-round supply of high quality, safe food. They also want food that aligns with their own personal values, which includes credence attributes such as environmental sustainability, animal welfare and fair trade, as well as local and organic production.

Consumers want food that aligns with their own personal values, which includes animal welfare and environmental sustainability
Consumers want food that aligns with their own personal values, which includes animal welfare and environmental sustainability

To deliver this, it is necessary to have farmer suppliers who can produce the right quality of product when the market requires and who are committed to long-term supply relationships. Without this type of integrated value chain New Zealand will fail to break out of its reliance on agricultural commodities. This research has focused on several New Zealand exporters and their suppliers who have developed relationships with high-end retail customers and have a strategy in place to add value to their products.

Consistently meeting consumer demands is difficult within the constraints of New Zealand’s pasture-based agricultural production systems, as production volume and product specifications are highly dependent on climate.

Read Full research publication

Lees, N. J. (2015). The potential for red meat value chains. Primary Industry Management 19(1), 25-28.

Farm Efficiency or Customer Value – What is New Zealand Agriculture’s Competitive Advantage

nz boatFor most of the last century New Zealand has led the world in efficient production of agricultural products. By the 1950s New Zealand had one of the highest standards of living in the world. This comfortable existence was shaken by the rise of agricultural protectionism and support mechanisms in the 1970s. New Zealand was shut out from traditional markets and needed to compete with subsidised exports that drove down international commodity prices. This began a long decline in New Zealand agriculture, highlighted by Prime Minister, David Lange’s, famous statement that “Agriculture in New Zealand is a sunset industry and manufacturing and tourism will take over.” Cows-in-the-FieldFortunately for New Zealand, the demand for our agricultural products is increasing. The rapid urbanisation and economic growth in Asia has seen unprecedented growth in a middle class that is driving demand for New Zealand’s meat and dairy products

While this is good news, it also presents a significant challenge. How can New Zealand turn this period of high agricultural commodity prices into sustainable long-term prosperity?  New Zealand, potentially, risks becoming dependent on China in the same way it was dependent on Great Britain for most of the 20th century. Once again, New Zealand may become vulnerable to volatile international commodity prices and changes in foreign countries’ agricultural policies.

Read Full Article

Breakfast in Belgium

The renovated breakfast room of the B&B Le Verger (the orchard)
The breakfast room of the B&B Le verger (the orchard)

Staying in a 100 year old Bed and Breakfast in Brussels (Le Verger) with Sarah, Olivier and their 3 children gives me the opportunity for some informal research interviews. Interestingly Sarah runs a local food co-op, collecting food from a local farm and delivering it to other families in Brussels.

As I sit down to have my Belgian breakfast of croissants, coffee, cheese, prosciutto and yoghurt, my host Olivier asks me about what I am doing here. After explaining about the research project, he soon tells me that New Zealand has a problem because of the distance of transport.  New Zealand is so far away how can sending our food to Europe be sustainable? I explain how the sea freight only makes up a small proportion of the carbon footprint and that the production and road transport make up the biggest share. He seems to understand and mentions the latest National Geographic article on food that comments that “local food” is not that sustainable because it can not be scaled to feed the world.

I ask him what New Zealand food products he is aware of in Belgium. He had to think hard for a while then says of course there is wine in the supermarket, white wine and also can be found in the wine specialty stores. He knows about Zespri kiwi’s because it happens the business he works for uses the same marketing and communications company as Zespri. Because of this he knew quite a lot about Zespri even about the problems with PSA disease.

Apart form that he can’t think of much though he then remembers lamb sold at Easter “Le Gigot d’Agneau Pascal”. All the supermarkets had it

Carrefour Supermarket add offering NZ lamb for NZ$8.40/kg
Carrefour Supermarket add offering NZ lamb for NZ$8.40/kg

for sale and it was so cheap. Everyone new it was New Zealand lamb though it wast specifically advertised as such. The Easter lamb is traditional so the supermarkets sell it below cost (loss leader) as a way to attract customer so they can make their money on the wine, vegetables and other food they buy. They had contacted a specialist butcher to see if they could get some lamb but he said he couldn’t compete because of the low price the supermarkets were offering.

New Zealand "Zespri" and Italian "KingKiwi" from the fruit bowl.
New Zealand “Zespri” and Italian “KingKiwi” from the fruit bowl.

Interesting start to the research, it seems NZ wine had the strongest brand presence followed by Zespri “Kiwi” fruit. This is further confirmed as I reach for the fruit bowl and selected Zespri branded “kiwi” to finish my breakfast. Notice the difference in quality between the New Zealand Zespri and the Italian KingKiwi fruit


The challenge of marketing New Zealand Food and Wine

Knud_149Today I begin three weeks of research interviews in Europe on how to increase the value of New Zealand food exports by communicating the “credence attributes” to consumers (see current research for more information). “Credence” means things like our clean green image, animal welfare, food safety or anything else you can’t experience by consuming the product.

I will try to share some of the experiences that won’t be so easy to describe in a written research report, and also encourage readers to make comments, as many of you will have had your own experiences and thoughts that can add to this.

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Credence: belief as to the truth of something: in other words attributes that need to be taken on trust, you cant experience them in the product as you can with taste or appearnance

How do you define sustainable beef?


McDonald’s aims to begin purchasing verified sustainable beef in 2016

The big question is, how do you define sustainable?

The answer to this is being sought by the Global Roundtable for Sustainable Beef (GRSB) a group made up of conservation groups, farmer associations, retailers and companies providing products and services to the global beef industry

GRSB prescribes to the “triple bottom line” approach in defining sustainability, meaning a a sustainable beef system must be environmentally sound, economically viable and socially responsible.  This week they have published a draft document outlining “Principles and Criteria for Global Sustainable Beef” The draft document is open for public comment through May 16, 2014.

GRSB Principles and Criteria for Global Sustainable Beef

The key principles outlined are:

  • Natural resources – Global sustainable beef stakeholders produce beef in a manner that identifies and manages natural resources responsibly and maintains or enhances the health of ecosystems.
  • People and community – Global sustainable beef stakeholders protect and respect human rights, and recognise the critical roles that all participants within the beef value chain play in their community regarding culture, heritage, employment, land rights and health.
  • Animal health and welfare – Global sustainable beef stakeholders respect and manage animals to ensure their health and welfare.
  • Food – Global sustainable beef stakeholders ensure the safety and quality of beef products and utilize information-sharing systems that promote beef sustainability.
  • Efficiency and innovation – Global sustainable beef stakeholders encourage innovation, optimise production, reduce waste and add to economic viability.

These principles are being left somewhat general with the idea that they will be made more specific at a local level.


One third of food products mislabelled shows importance of supply chain integrity

_66011739_017282432The importance of supply chain integrity has been highlighted by results that show a year after the horse-meat scandal tests in the UK show that 1/3 of food products are mislabelled.

Consumers are being sold drinks with banned flame-retardant additives, pork in beef, and fake cheese, laboratory tests show

Consumers are being sold food including mozzarella that is less than half real cheese, ham on pizzas that is either poultry or “meat emulsion”, and frozen prawns that are 50% water, according to tests by a public laboratory.

The checks on hundreds of food samples, which were taken in West Yorkshire, revealed that more than a third were not what they claimed to be, or were mislabelled in some way. Their results have been shared with the Guardian.

Testers also discovered beef mince adulterated with pork or poultry, and even a herbal slimming tea that was neither herb nor tea but glucose powder laced with a withdrawn prescription drug for obesity at 13 times the normal dose.

The Guardian

Read more



McDonalds are committing to a goal of purchasing verified sustainable beef

Americans alone consume 500,000 tonnes of beef at McDonald’s in a year — five and a half million head of cattle

McDonalds are committing to a goal of purchasing verified sustainable beef. This sounds simple, but it’s actually a big challenge because there hasn’t been a universal definition of sustainable beef. they are  collaborating with World Wildlife Fund (WWF), Cargill, JBS, and others to develop the Global Roundtable for Sustainable Beef (GRSB). This multi-stakeholder group has drafted guiding principles and best practices for sustainable beef

for more information see:

McDonalds Beef Sustainability

Global Roundtable for Sustainable Beef (GRSB)