Organic dairy could compete with alternative proteins, Tatua chairman says

“Alternative proteins are a big threat to our primary sector but also an opportunity,” Allen said at a Rural Business Network meeting in Hawera.

“I actually think the whole of New Zealand could go organic. If we chose not to go the alternative protein way, the disruptive way, and said we were going to do the real thing and go completely top end – non-GMO, grass-fed, chemical free – it might be an opportunity to differentiate ourselves with the real thing.”

Definitions of “organic” varied from country to country and by some standards, there was an argument to say the whole of New Zealand was already organic or very close to it, Allen said.

“You would have to go back to the market and understand the value proposition from the consumer’s perspective and whether it’s worth investing in that whole organic chain but it’s definitely possible.”

While change was definitely on the horizon, Allen said there was a tendency to underestimate the impact of technology in the long term but overestimate its impact in the short term.

“You get something invented or created of a technological nature and everyone thinks it’s going to change everything and then nothing happens for five years,” he said.

“Then all of sudden, 10 years out, there’s a huge take-up of the technology and a massive change. We’ve seen that with the iPhone – it started quite little and then all of a sudden everyone’s got an iPhone. Electric cars may be the same.”

Advances in food technology were likely to follow the same pattern, he said.

“These things will happen and they will take up big chunks of the market and whether it will be at the high end of the market or the cost-competitive end of the market, I don’t know.

“I suspect it will be at the low cost end of the market initially but then it may start creeping up the supply chain as they refine how these things are developed and made.

“There are people now creating lookalike steak out of test tubes, using stem cells to create what is for all intents and purposes a steak but didn’t require the slaughter of an animal. Perhaps it didn’t require as much water and energy and all sorts of things through that whole supply chain.

“Sooner or later when these technologies become cost-effective and the consumer’s questions about where it comes from and what’s in it are answered and accepted, there will be an uptake.”

However, the looming shift to synthetic and plant proteins did not necessarily mean there was no future in farming in New Zealand, Allen said.

“As with a company like Tatua, there will always be niche section of the population or market that wants the real thing and wants the premium, whatever the premium may be.”

Whichever way the dairy industry chose to tackle the challenges posed by alternative proteins, it would have to be the best at it, he said.

“Whatever we choose to do as organisations, farmers or marketing people we’ve got to be the best. You’ve got to be world class and you’ve got to be competitive. But we need to take up that challenge rather than be frightened about it.”

Waikato-based Tatua Co-operative Dairy Ltd has 110 shareholder suppliers and exports 90 per cent of its primarily value-added products to more than 60 countries.

The company has a history of innovation, having created Dairy Whip aerosol “cream in a can” in the 1970s.

“We were down to 20 suppliers with more being gobbled up by the bigger players every year and we needed to come up with something niche,” Allen said.

“Dairy Whip is now seen as a beacon of innovation and it was the first product to fall under what people now call ‘value-add’.”

The Tatua factory at Tatuanui, near Morrinsville, now produces specialty nutritional ingredients, bionutrients and dairy flavour ingredients, as well as consumer and food service industry products.


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