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.
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 needs to make more of opportunities to create an international food brand and image. Our small size an lack of capital can also be overcome with effective partnerships like the kiwi-Chinese partnership that created the Flat White Cafe in Beijing’s 798 ArtDistrict . Inspired by New Zealand cafe culture it claims to provide the best coffee in Beijing. Established five years ago by Wellington Fidel’s Cafe owner Roger Young and Chinese business partner Michael Hongfu. They now have five cafés in Beijing and also a coffee roasting business called Rickshaw Roasters.
Michael first came to New Zealand in 1989 to study English. Returning to Beijing and addicted to good coffee he started Flat white so he and his friends could get a great coffee. With support from Roger Young from Fidel’s and Geoff Marsland from Havana Coffee they originally used Havana coffee roasted in Wellington and shipped weekly before starting Rickshaw Roasters.
The roasters are small team of Chinese and New Zealanders based in Beijing. They source top quality Arabica beans from around the globe, then import and roast them.
While NZ grown coffee isn’t a New Zealand export the cafe and roasters clearly create a strong New Zealand inspired image in the midst of crowded Beijing. This includes images of cabbage trees, colour prints of Whangamata beaches, pohutakawa trees and white sands. The Flat White Cafe might be a small operation however it demonstrates the potential for different New Zealand sectors to leverage off each other in promoting a consistent New Zealand image and brand.
It also shows how we often miss opportunities where our tourism, food and wine as well as arts and cultural industries could better leverage our limited resources in promoting New Zealand to the world. While traveling in Europe recently I was reminded how little most Europeans know about New Zealand outside of the
United Kingdom. Zespri Kiwifruit and the Lord of the Rings Movies were the images that most easily came to mind. When asked about New Zealand food most could not get past the “Kiwi” (fruit) or mixed up New Zealand and Australian wines “yes I have had some New Zealand wine, thats the one with the yellow kangaroo on it!
While New Zealand food and beverage exports are valued at about NZ$50b little is spent on promoting New Zealand food and beverages internationally. While the New Zealand Tourism board (Tourism New Zealand) has a budget of NZ$113m there is no equivalent agency collectively promoting New Zealand food, wine and other beverages. It is left to individual companies and entrepreneurs like Roger Young and partner Michael Hongfu to create this image and the opportunity to collectively establish a New Zealand reputation for the world best coffee, wine, beef, lamb, venison , apples and kiwifruit is lost. Try entering “New Zealand Food” in google and see what you find.
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
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.
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
Today 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.
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.
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.
The 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.