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Incentives for Change

Rewarding Sustainable Practices

Delivering validated new knowledge to agribusiness leaders transforming commodity supply chains to premium value chains

Close up of content farmer woman in checked blue shirt inside vintage pickup truck

PROJECT DETAILS

Challenge funding: $2,000,000

Research duration: August 2019 – June 2022

What Are We Doing?

New Zealand food producers are under pressure to reduce their impact on fresh water and their greenhouse gas emissions. They also need to maintain their income to support their whānau and their employees, pay their mortgage, and continue making their significant contribution to New Zealand’s economy.

One way to support farmers and growers to meet New Zealand’s environmental goals is to reward sustainable practices.

People all over the world value many things about quality New Zealand food, such as its safety and environmental stewardship, and many customers are willing to pay more for these qualities.

This research will help exporters capture more value for their produce and increase returns to food and fibre producers, rewarding the good practices that created the extra value. This will require a ‘value chain’ of businesses, from farmer to retailer, to collaborate to authentically deliver the attributes valued by overseas customers.

How Can The Research Be Used?

  • Researchers have tested their approach by working alongside four businesses beginning a ’volume to value’ transition, providing new insights into how enterprises can transform their commodity supply chain to a premium value chain.
  • The research team has identified 9 key characteristics that are common to value chains that successfully reward food producers for sustainable choices.
  • ‘Market orientation’ is one key characteristic common to successful value chains. This research has undertaken choice modelling experiments to understand what attributes overseas customers most value for food and fibre products from New Zealand. (Explore the results of the team’s previous choice modelling experiments: sauvignon blanc in California, yoghurt in Shanghai, kiwifruit in Shanghai, beef in California)
  • The research programme is developing a tool for agribusinesses and exporters, that they can use to help identify and introduce critical success factors associated with successful value chains.
  • The programme will deliver this new knowledge to leaders who are transforming New Zealand’s primary sector to distribute significantly more value to producers from consumers than established supply chains.
  • This programme builds on the work of the Integrating Value Chains programme.

Research Updates

Credit Peter Young Img 9761

May 13 2022

Introducing The Value Project

Building better value chains is the key to unlocking greater value for New Zealand producers ...
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Pounamu Hands

May 12 2022

From stone to taonga: Capturing the value in pounamu

How do you ensure a treasured resource goes to people who understand its real value? ...
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The Matrix Of Drivers 2022: climate change is a much bigger issue than all other issues, with 8% growth since 2019

May 11 2022

What Will Change Farming in New Zealand? Agrifood Experts Rank the Issues, with Climate Change on Top

The latest edition of the ‘Matrix of Drivers’ report finds that primary sector leaders agree ...
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Tvp1

May 8 2022

The 9 attributes of highly successful value chains

Why are some companies better than others at capturing value for their sustainably sourced products? ...
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Caroline Saunders 01

May 7 2022

Professor Caroline Saunders

Caroline’s crazy dream for New Zealand “That not an ounce of product leaves the country ...
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Paul Dalziel 01

May 7 2022

Paul Dalziel: Finding the value in values

Professor Paul Dalziel leads the Rewarding Sustainable Practices research programme. He spoke to Vincent Heeringa ...
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An array of New Zealand certification logos for credence attributes valued by customers

May 4 2021

Are Overseas Customers Truly Willing To Pay More For ‘Sustainable' Food?

Take a guess at the largest organic sector in New Zealand. Are you thinking wine? ...
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Meat for sale in China with Taste Pure Nature signage from Beef + Lamb NZ

Mar 12 2021

An Early Contribution to Beef + Lamb New Zealand’s Taste Pure Nature Brand

By collaborating with the sheep and beef industry, Our Land and Water (OLW) generated evidence ...
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Taste Pure Nature in Times Square, NYC

Mar 29 2019

From Consumer Behaviour Surveys to Times Square: Taste Pure Nature Launches in the US

Beef and Lamb NZ did its homework before last week launching the Taste Pure Nature ...
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Shenzhen Supermarket

Jun 30 2018

800 Consumers in California and Shanghai Tell Us They’d Pay More For NZ Products

Seven reports from Phase I of the Integrating Value Chains research programme, part of the ...
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Community Involvement

  • The programme is being supervised by an Advisory Board of 20 representatives from major end-users of the research. The board has an oversight role in this project, meeting twice a year to receive reports on the research and to co-design the next stage.
  • An impact broker will assist with stakeholder engagement and co-design of initiatives to amplify impact to businesses, industry bodies and Māori enterprises.

Team Snapshot

Research Outputs

REPORTS

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

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

Produced by the Integrating Value Chains research programme, this report informs the Rewarding Sustainable Practice programme. The report 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.

Papers

Geography matters for small advanced economies: Implications for economic strategy

Caroline Saunders; Paul Dalziel; Andrew McCallum
The Australasian Journal of Regional Studies, January 2021

New Zealand is a small advanced economy in the South Pacific Ocean. Policy advisors often compare New Zealand's economic performance with those of other successful small advanced economies. These comparisons generally recognise that New Zealand is uniquely distant from the world's largest and highest-income markets. Nevertheless, it has become commonplace for policy advisors to say "Geography is not destiny: New Zealand can do better". This paper draws on standard regional economic development analysis to conclude that geography matters for economic strategies. It draws on endogenous growth theory to explain how the properties of knowledge mean that knowledge can sustain increasing returns to scale and hence productivity growth. The paper draws on that theory to introduce a mission-oriented innovation research programme that has contributed to creating and capturing greater value from New Zealand food and fibre exports.

Measuring Chinese food consumers’ preferences for sustainability attributes: The case of the Shanghai yoghurt market

P. Tait, C. Saunders, P. Dalziel, P. Rutherford, T. Driver, M. Guenther
Journal of Asia Entrepreneurship and Sustainability, 2020

Comparing generational preferences for individual components of sustainability schemes in the Californian wine market

P. Tait, C. Saunders, P. Dalziel, P. Rutherford, T. Driver
Applied Economics Letters, 2019

Millennials are the largest demographic segment in the USA and have gained market share of high-frequency wine drinkers while Baby Boomers and Gen-X generations share has fallen. This demographic evolution focuses attention on understanding Millennial wine drinkers’ preferences. At the same time the wine industry has seen significant establishment of sustainable certification systems as preferences for sustainability have developed and been recognized as an avenue for product diversification. This paper reports on a discrete choice experiment with the objective of comparing generational preferences for individual components of sustainability schemes active in the Californian Sauvignon Blanc market. We find significant attribute preference differences over age cohorts. Millennial consumers are willing to pay significantly more for sustainability attributes than both Gen-X and Baby Boomers. While Baby Boomers place more emphasis on country-of-origin attributes than either Gen-X or Millennials.

Wellbeing Economics in Public Policy: A Distinctive Australasian Contribution?

P. Dalziel
Economics and Labour Relations Review

The ‘Wellbeing Budget’ presented to the New Zealand Parliament in 2019 was widely described as a world-first. This article explores the possibility of a distinctive Australasian contribution to our understanding of wellbeing economics in public policy. The introduction section presents an analytical wellbeing framework showing how human actions draw on services provided by the country’s capital stocks to create and sustain personal and communal wellbeing. The second section chronicles some landmark policy initiatives in Australia and New Zealand for understanding and monitoring wellbeing, culminating in the Wellbeing Budget. The third section highlights four areas for further development: (1) the role of family wellbeing in intergenerational wellbeing, (2) the role of cultural capital in providing foundations for future wellbeing, (3) the role of Indigenous worldviews in enriching understandings of wellbeing and (4) the role of market enterprise in expanding capabilities for wellbeing. These are all areas where Australasian researchers have demonstrated expertise.

CONFERENCE PRESENTATIONS

Market-Oriented Value Chains

Tiffany McIntyre
Our Land and Water Symposium, August 2019

Video: https://vimeo.com/356119195

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