OWEN JENNINGS: Keep Those Brands

There will be many retired dairy farmers who were aghast to learn that Fonterra is considering selling off its brands’ business. All their dairy farming days they had heard the clarion call that “we had to add value”, “invest in more branded product”, or “get closer to our end consumers.” They were not just slogans – they were guiding principles.

There has been a long history of significant investment into brands like ‘Anchor’, ‘Anmum’, ‘Mainland’, ‘Fernleaf’, ‘Anlene’ and several more recent ones. They have more than financial value – they are the dairy industry’s crown jewels.

Many existing dairy farmers are also concerned. They hear the rationale for the possible sale as the improved financial accounting of Fonterra’s business has revealed the fine margins in the added value, branded product business, even producing losses in some years. Obviously, the company now has a massive amount of capital tied up in its brands and that could be used elsewhere either by Fonterra or their shareholders.

Recent years of inflation arising from poor management of the state’s books has made adding value in New Zealand even more difficult. Distance from markets is still a tyranny despite modern conveniences. As a corporate with a narrower focus on supplying ingredients only, improved performance could be expected.

However, a much larger question emerges. It is not just a financial decision; it’s a strategic one.

The world of consumers is moving inexorably toward wanting safe, clean, natural food that makes our food and fibre production look increasingly ideal. Without our brands and products clearly stating New Zealand origin, we cannot extract the full value from this trend.

Sadly, we are travelling in the wrong direction. Our dairy farmers are constantly heckled for all manner of environmental ills despite a record unsurpassed anywhere in the world. We focus on minutiae of little consequence instead of extolling the amazing, rich environmental and social value that exists in rural New Zealand. Our total carbon footprint, despite food-miles, is away ahead of the nearest rival.

Our farmers have set aside and now manage diligently 190,000 hectares of covenanted land under the Queen Elizabeth ll National Trust. That’s an area far bigger than most of our national parks. Riparian planting, steep slope planting, protection of waterways, enhanced wetlands, boosts to diversity increase each year at a surprising rate. Farmers are spending huge numbers of hours working in catchment groups, river care groups, land care groups.

We need to gather this knowledge, these commitments, this mass of stewardship, this admiration of the family farm, this enhancement of the fabric of our rural communities, and “sell” it to the world’s consumers who have a growing love affair with such noble developments. It is not just empty PR from the Comms team – it's potentially high value marketing that captures hearts and minds as well as wallets.

We are missing the exciting opportunity to tell the world what a uniquely beautiful and environmentally sound place our food and fibre comes from. We have an amazing story to tell. We need branded goods, items that end up in consumer’s hands in our packaging, labelled on our terms, that focus on our unique positioning. By changing the focus from regulation whip to encouragement carrot we can not only improve our farm environment but share that improvement narrative as we go.

It’s not more regulation we want, not ugly, boluses forced down our animals gullets, not scary vaccines, not more bland, soil destroying pine trees blanketing our magnificent rolling landscapes, not more divisive, siloing treatment of our natural systems, not more intensive, heavy input farming and conditions that encourage corporate farming, not more bureaucrats with clipboards, drones, and rates-derived flash utes demanding allegiance to yet another regional plan, not more compliance cost and the destruction of our individuality and environmental entrepreneurship.

Let’s value and celebrate our diversity, our ecological gains, our growing plantings of natives, our nature-based solutions, our continuing journey toward environmental excellence, our community led initiatives and freedom from stifling rules, our dependence on the family farm and strong local well-glued neighbourhoods. Let’s exchange depressing negativity for empowering positivity.

We are free range, grass-fed, wholesome and healthy.

We are not a low-cost producer anymore, relying on our climatic and soil advantages alone.

Let’s use our combined wit and wisdom to find a way to link more directly to our consumers and share with them our exceptional, exclusive and powerful story. The world of social media and artificial intelligence play into our hands wonderfully. They remove the divide, the distance tyranny.

Fonterra. Consider options that keep those rich brands in your or Kiwi hands. A total sale to some disinterested party may destroy our best advantage in decades. We need to capitalise on the stimulating and rewarding opportunities that are emerging in our world of greater and easier connectedness. Not just dairy products but all of our bounty from the land. Collaboration across sectors is essential.

A world where our distinctive and potentially invigorating storytelling, our unsubsidised nutritious food and our ecological authenticity has growing value and profitability.

Owen Jennings, Former ACT MP