The Ag Journal | 26 Nov

Customers are feeling the pain of lower purchasing power and sustainability is one of the first on the blocks.

IN THIS EMAIL:

CUSTOMERS WILL NOT PAY FOR SUSTAINABILITY

OISHIEE GOES TO JAPAN

CANCER RESEARCHERS LEARN FROM FARMERS

SUSTAINABILITY VS COST OF LIVING

Australian consumers care less about the sustainability of their food.

Shoppers are cutting back on spending with “80% of domestic consumers conscious of food and grocery prices.” according to Coles national livestock manager Stephen Rennie. With this reduction in spending comes a drop in customers concerns with the environmental impact of their food.

In the red meat section, only 2% of consumers want a product that is more sustainable and ethical. Almost 40% feel that enough is being done about climate change.

This is at odds with the years of messaging from consumers and retailers alike where ESGs are at the forefront of customers purchasing decisions.

The reality is that customers WILL NOT pay for the sustainability of their food. Particularly during a cost of living crisis.

If you have been to an Ag conference in the last few years, the program was invariably wall to wall sustainability, but as inflation bites and purchasing power erodes, people make decisions on the pain that is here and now. The pain in their back pocket.

Growers and agricultural marketers must come to terms with the fact that we need to adapt to climate change, and we need to do it ourselves. The market will not support the transition. Margins, particularly from the big retailers, will not be there to cover the cost.

So how do growers deal with the impact of climate change and climate change regulations?

1. We need to control what we can within our businesses. Make small changes that create measurable impact, be that cover cropping, controlled traffic, modern rotational grazing, etc. Low cost, high impact is the name of the game. Doing more with less and being thoughtful and deliberate about our production methods.

2. We need to clearly document the sustainability improvements in our businesses. Mandatory ESG reporting will arrive sooner or later and the more prepared with evidence the better.

3. And we as an industry need to talk about it. Use the free distribution available to us all to tell our stories of responsible farming and take back the narrative.

The market isn’t coming to save us.

OISHII RAISE $150M TO ENTER JAPANESE MARKET

In cheerier news, US based vertical farming darling Oishii recently closed on a reported $150m serries B round to expand their operations into Japan.

Oishii is best known for their outrageously expensive strawberries that have become a hit with US shoppers through their collaboration with Whole Foods. The company is also working through the expansion of their product line to include tomatoes and leafy greens.

This coming at a time when one time vertical farming unicorn Bowery shuts up shop.

The lessons learnt from this tale of two farms is one of basic agroeconomics. Rather than trying to reinvent the wheel, Oishii have focused on high margin, market differentiated products and managed their growth sustainably. Bowery, focusing on building technology to support a lower margin crop (leafy greens etc) struggled under the weight of rapid growth, debt and agronomic challenges.

At the end of the day, these vertical farms are not high growth tech startups, they are farms, and they face all the same economic forces as every other farm.

IPM FOR CANCER?

Researchers from Arizona State University are exploring the application of integrated pest management to cancer treatments.

Fundamental to this research is the shift in thinking about how cancer acts in the body by incorporating the idea of cancer evolution.

In the same way that pest and weeds in an agricultural system adapt to common control methods, the research suggests that cancers can be ‘selected’ for drug resistance.

By incorporating a multi-layered IPM strategy, cancer researchers may be able to better treat drug resistant cancers and improve patient outcomes.

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-ST