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Incentives for Change

Integrating Value Chains

Providing knowledge on how to construct global value chains that share increased value with New Zealand farmers and growers, and meet environmental expectations of consumers and citizens

Apple exports by Paul Sutherland Photography

What Did We Do?

The customer decides the final value of New Zealand’s agricultural exports. To increase this value, the ‘value chain’ of businesses, from producer to retailer, can collaborate to align their strategies and processes with what customers value most highly, and make clear this ‘story’ of production.

Integrating Value Chains tested whether New Zealand’s world-renowned reputation for food and fibre would allow our producers and processors to capture higher returns for agri-food exports. This research delivered new knowledge about how international consumers value New Zealand food exports, especially from Māori enterprises. It also looked into new technologies for authenticating food trust.

Five case studies of successful New Zealand value chains were researched, so learning from their success can be used by other businesses.

Our goal is for New Zealand to produce high-value products across all sectors, and share more of this value from consumers to producers in a way that rewards good environmental, social and cultural practices.

How Can The Research Be Used?

  • The major output of this research was a report synthesising the learnings from the 5 case studies. This includes a framework of key elements of a global agri-food value chain that creates, captures and shares value. This can be used by enterprises wanting to create value from the sustainability and other attributes of New Zealand agri-food exports.
  • Beef + Lamb NZ commissioned tailored research, using the methodology developed in this programme, to help develop its New Zealand ‘red meat story’ for international markets, Taste Pure Nature. That initiative was supported by an increase in Beef and Lamb levies of $4.1 million. The potential in the US market is extra revenue (20% premium) of $238 million in export returns. Our research supports Beef+Lamb NZ’s environment strategy to ensure the claims from this $7 billion industry are met.
  • Incentives for Change researchers were engaged by the Primary Sector Council (set up to advise the Minister of Agriculture) to produce a situational analysis of the New Zealand food and fibre sector. Their report drew heavily on the Integrated Value Chains research programme. This report is being used to develop a strategy for the New Zealand Government.
  • Government initiatives Trade For All, Just Transitions and AsureQuality have used work from this programme.
  • Industry bodies and companies have engaged with Integrated Value Chains researchers to increase value from export market, including Wakatū Incorporation , Ngāi Tahu Pounamu, Zespri, Taupō Beef and Lamb, Fonterra and ANZCO.
  • Research from this programme has been shared with participants in Te Hono, the association for influential primary sector leaders.
  • The AERU has created a dedicated website, www.sustainablewellbeing.nz, where anyone can download the 7 research reports generated in the first phase of research, including 4 reports on choice experiments in 4 different export markets (kiwifruit and yoghurt in Shanghai, and beef and wine in California).
  • The AERU has also created the AERU Data Portal, a free, interactive platform to access results from the AERU international consumer surveys.

In the Media

Challenge looks at how to build trust and capture more of our agricultural earnings

Irrigation NZ News, Winter 2019

“We need to figure out how to capture value that is then shared with the producer — we must transform our supply chains into value chains.”

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The Future of Food: More Plants and Our Meet and Milk Artificial

Radio New Zealand, 2 July 2018

A public panel discussion at Waikato University chaired by Kim Hill in association with the New Zealand Food Safety Science and Research Centre

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Farming for our Future

NZ Geographic, March–April 2018

“The way we produce now is generating premiums we don’t always receive,” says Caroline Saunders. “We need to figure out how we can capture value that actually trickles down to the producer—stop thinking about supply chains and start thinking about value chains”

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Community Involvement

  • The programme is being supervised by an Advisory Board of representatives from major end-users of the research. The research team meets regularly with industry end-users.
  • A meeting with key Beef + Lamb NZ designers of the New Zealand Red Meat Story took place at Lincoln University in August 2017. Over 1000 farmers voted to increase their levy to progress Beef + Lamb NZ's work to develop what later became the Taste Pure Nature campaign.
  • Professor Caroline Saunders was appointed President of the Agricultural Economics Society in the UK. Her Presidential address to an international audience at the Agricultural Economics Society annual conference in 2019 drew directly on this programme's science.
  • A PhD researcher associated with the programme, Tiffany McIntyre, was selected to be a member of a New Zealand team in the students' case study competition of the International Food and Agribusiness Management Association. Her team was placed second against strong competition.
  • The AERU had a stand at the Export New Zealand Go Global Expos in Auckland in 2017, 2018 and 2019, each attended by about 300 people.
  • Researchers in this programme are also connected to the High Value Nutrition National Science Challenge.

Team Snapshot

Research Outputs

PAPERS

Sustainable Agriculture – Life beyond Subsidies: Lessons from New Zealand

Caroline Saunders
Journal of Agricultural Economics, August 2019

This paper explores the importance for agricultural sustainability of different types of capital assets, especially knowledge capital, drawing on recent research in New Zealand that has aimed to expand the contribution of the primary sector to sustainable wellbeing. Recent trends in New Zealand and United Kingdom agriculture provide the applied context for analysis of some key knowledge issues facing agriculture. The paper finishes with a brief conclusion on the implications for the UK.

Estimating Wine Consumer Preferences for Sustainability Attributes: A Discrete Choice Experiment of Californian Sauvignon Blanc Purchasers.

Peter Tait, Caroline Saunders, Paul Dalziel, Paul Rutherford, Tim Driver, Meike Guenther
Journal of Cleaner Production, October 2019

This paper reports on the application of a discrete choice experiment to identify and measure Californian sauvignon blanc consumer preferences for individual components of sustainability schemes active in-market. A specific objective was to assess the relative importance of sustainability attributes in consumers' wine choice. Growers and wineries considering market strategies incorporating sustainability may benefit from increasing attention on attributes more valued by consumers such as management of pests and diseases, and water resources.

Rewarding Responsible Innovation when Consumers are Distant from Producers: Evidence from New Zealand

Paul Dalziel, Caroline Saunders, Peter Tait, John Saunders, Sini Miller, Meike Guenther, Paul Rutherford, Tim Driver
International Food and Agribusiness Management Review, 2018

This paper examined the question of whether local producers can be rewarded for responsible innovation (for example, to improve sustainability of production) when the bulk of their consumers are in distant markets. This is relevant for New Zealand because so much of the country’s agri-food production is exported.

Governance of market-oriented fresh food value chains: Export chains from New Zealand

Jacques Trienekens, Mariska van Velzen, Nic Lees, Caroline Saunders, Stefano Pascucci
International Food and Agribusiness Management Review, 2018

This study explored how the governance of a global food value chain can facilitate the value chain’s market orientation towards the values of final consumers. The study was based on 4 in-depth case studies conducted on global food value chains from New Zealand to Western Europe dealing with apples, kiwifruit, venison and lamb.

DIGITAL TOOLS

Beef in California

Online tool to access and analyse results of a survey of beef consumers in California about their consumer behaviour, preferences, technology use, understanding of Maori enterprise, and country of origin preferences.

Kiwifruit in Shanghai

Online tool to access and analyse results of a survey of kiwifruit consumers in Shanghai about their consumer behaviour, preferences, technology use, understanding of Maori enterprise, and country of origin preferences.

Wine (sauvignon blanc) in California

Online tool to access and analyse results of a survey of wine consumers in California about their consumer behaviour, preferences, technology use, understanding of Maori enterprise, and country of origin preferences.

Yoghurt in Shanghai

Online tool to access and analyse results of a survey of yoghurt consumers in Shanghai about their consumer behaviour, preferences, technology use, understanding of Maori enterprise, and country of origin preferences.

REPORTS

Governing Value Creation and Capture in New Zealand Agribusiness Value Chains: A Case Stud

Tiffany McIntyre, Mark M. J. Wilson, Caroline Saunders, Paul H. J. Childerhouse, Paul Dalziel, William Kaye-Blake, Tanira Kingi, Alistair Mowat, John Reid, John Saunders | AERU Research Report No. 355. June 2019

This research investigates five case studies of New Zealand global value chains to identify those value chain attributes important to return value to the producer. All highlighted the importance of ‘values’ to create ‘value’. While value is an important driver, firms were largely concerned with developing relationships in which trust became an implicit factor, based upon a foundation of shared values, vision, and culture. The presence of these throughout the chain, in addition to supporting incentives, was crucial in ensuring alignment within the value chain.

Consumer Insights and Willingness to Pay for Attributes: New Zealand Yoghurt Products in Shanghai, China

Peter Tait, Paul Rutherford, Tim Driver, Xuedong Li, Caroline Saunders, Paul Dalziel | AERU Research Report No. 347, June 2018

To achieve greater value in global markets, New Zealand can increase its understanding of our international customers’ demands for products from New Zealand’s land and water. This study is one of 4 reports assessing consumer behaviour and preferences in market, including consumer use of media and technology. This report focuses on yoghurt consumers in Shanghai.

Consumer Insights and Willingness to Pay for Attributes: New Zealand Beef Products in California, USA

Peter Tait, Paul Rutherford, Tim Driver, Xuedong Li, Caroline Saunders, Paul Dalziel | AERU Research Report No. 348, June 2018

To achieve greater value in global markets, New Zealand can increase its understanding of our international customers’ demands for products from New Zealand’s land and water. This study is one of 4 reports assessing consumer behaviour and preferences in market, including consumer use of media and technology. This report focuses on beef consumers in California.

Technologies and Audit Systems for Authenticating Food Trust

William Kaye-Blake, Matthew Smith, Tim Driver, Karyne Rogers, Jon Manhire, Troy Baisden | PwC Client Report, June 2018

Collaborative value chains that effectively communicate credence attributes will help enhance New Zealand’s global reputation for sustainable and high quality primary products. This report describes technologies and systems that can assist New Zealand to capture greater value through the value chains for its agri-food products.

Consumer Insights and Willingness to Pay for Attributes: Kiwifruit in Shanghai

Peter Tait, Paul Rutherford, Tim Driver, Xuedong Li, Caroline Saunders, Paul Dalziel | AERU Research Report No. 346. June 2018

To achieve greater value in global markets, New Zealand can increase its understanding of our international customers’ demands for products from New Zealand’s land and water. This study is one of 4 reports assessing consumer behaviour and preferences in market, including consumer use of media and technology. This report focuses on kiwifruit consumers in Shanghai.

The AERU Data Portal: An Introduction

Tim Driver, Paul Dalziel, Caroline Saunders | June 2018

This report introduces the AERU Data Portal, which allows the user to access results from the AERU international consumer surveys in an interactive web-based platform, and explains how it can be used.

The Governance of Value Creation and Capture in Agri-Food Supply Chains: A Conceptual Framework, Propositions and Protocols

Tiffany McIntyre, Mark Wilson, Birgit Schulze-Ehlers, Paul Childerhouse | Client Report, June 2018

The concept of value is central to business operations and how the process of value creation and value capture is managed is a critical success factor to the performance of supply chains. This report explores the relationships between value and collaborative governance at the network level. Its conceptual framework highlights the decision-making process of a firm in order to create and capture value under a network governance schema.

Consumer Insights and Willingness to Pay for Attributes: New Zealand Wine in California, USA

Peter Tait, Paul Rutherford, Tim Driver, Xuedong Li, Caroline Saunders, Paul Dalziel | AERU Research Report No. 349, June 2018

To achieve greater value in global markets, New Zealand can increase its understanding of our international customers’ demands for products from New Zealand’s land and water. This study is one of 4 reports assessing consumer behaviour and preferences in market, including consumer use of media and technology. This report focuses on wine consumers in California.

How Value Chains Can Share Value and Incentivise Land Use Practices: A White Paper

Caroline Saunders, Paul Dalziel, Mark Wilson, Tiffany McIntyre, Hilton Collier, William Kaye-Blake, Alistair Mowat, Tava Olsen and John Reid | September 2016

This white paper was commissioned by the Our Land and Water National Science Challenge to test the hypothesis that the more collaborative a value chain is, the greater is the value that New Zealand producers, processors and manufacturers in the land and water sector can capture from profiling the desirable ‘credence attributes’ of its production systems (‘the New Zealand story’), targeted at consumer segments.

BOOK

Wellbeing Economics: The Capabilities Approach to Prosperity

Paul Dalziel, Caroline Saunders, Joe Saunders

This book sets out a wellbeing economics framework that directly addresses fundamental issues affecting wellbeing outcomes. The book examines national public policy, but its analysis also focuses on choices made by individuals, households, families, civil society, local government and the global community. It therefore offers important insights for anyone concerned with improving personal wellbeing and community prosperity.

CONFERENCE PRESENTATIONS

Integrating Value Chains

Peter Tait
Our Land and Water Symposium, August 2019

Video: https://vimeo.com/356113435

Market-Oriented Value Chains

Tiffany McIntyre
Our Land and Water Symposium, August 2019

Video: https://vimeo.com/356119195

Wellbeing Economics and Agricultural Policy

Paul Dalziel
Agricultural Economics Society annual conference, April 2019, UK

Rural Regions and Global Agri-food Value Chains

Paul Dalziel, Caroline Saunders and Tiffany McIntyre
Regional Studies Association annual conference, June 2019, Spain

Measuring What Counts: Revenue and Reputation

William Kaye-Blake, Caroline Saunders
High Value Nutrition NZ Conference, September 2017

Distribution of Value Across the Value Chain

Paul Dalziel
Our Land and Water Symposium, April 2017

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