Future lies in exporting premium food – Rowarth

Many of our products including dairy occupy 'premium healthy' categories, she says, but we are not telling that story sufficiently.

"Our farmers have traditionally been more about 'can we sell our product?' than 'we can think about what the market actually wants'. Our companies are beginning to move into it but they are taking some time," she told an Agcarm conference in Auckland.

"Our future is in premium; we have been saying this for some time but we haven't been targeting."

From 2006 to 2014 the premium category in the supermarkets increased 11.3%. Studies have shown the health aspect is considered the most important by consumers -- more important than the environment.

"We know our free range, mostly pasture grown products are higher in omega 3 than the grain fed counterparts. It might be so tiny it doesn't have any real health benefits but nevertheless grass-fed organic is being marketed on that basis, commanding much higher premiums -- in the case of milk twice as much at the farmgate in the US for the organic factor."

An organic cow in America only has to have access to pasture for 120 days a year.

"We are the third-lowest user of antibiotics in animals in the world., and we have good animal welfare," she says.

'Health' labels include low sugar, sugar free, no artificial colours, GM-free, natural flavours, all natural and high in fibre. "But the figures I really like are that 18% of people will pay a premium for GM free or natural," she says. New Zealand milk and kiwifruit, for instance, fit those labels.

"So there's a whole second wave of conventional retailers demanding this natural, organic, GMO free – the emphasis is on farm to table," she says.

Ethical food allows consumers to feel morally superior and triggers part of their brain to produce seratonin so the food tastes better. The same with eco labelled food: research has shown if you eco label a Big Mac burger but not another, the eco labelled one tastes better even if they actually taste the same. Eco labelled water tastes better than the others.

"It's the imagination [that counts], but what have we been doing about capturing the imagination for New Zealand products?"

Rowarth said if we go too far down any of these purity tracks we run the risk of dropping the money. This is what happened to premium and organic products during the global financial crisis.