Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
Consumers worldwide are demanding sustainably produced food and are keen to know how the food that lands on their meal table is produced.
They expect farmers to be part of the climate change movement and leading the march on sustainability onfarm.
With that in mind Fonterra this month announced an initiative that focuses on sustainability at all levels and prioritises the value of milk, rather than the volume, into the future. Its programme The Cooperative Difference focusses on five key areas: environment, animals, milk, people and communities, and our co-operative and prosperity.
The firm intention is to make clearer to farmers what their co-op expects of them today and in the future, and to duly recognise the many farmers who conscientiously produce high quality milk in a more sustainable way. Those who produce will be rewarded, but those who persist with continuously poor milk grades will face the consequences.
Meanwhile, Beef + Lamb NZ has also moved in the same direction. Last year, it launched its environmental sector strategy and a biodiversity report showing that sheep and beef farmers have 24% of NZ’s native vegetation on their farms.
These were not developed just for the fun of it, but as BLNZ chief executive Sam McIvor told the organisation’s annual meeting, “the social licence to farm is a real issue”.
“We need to understand the perspectives of the public and our markets; they influence government policy and buy our products.”
Just as the public attitude to water quality has changed in recent years, so too will the public stance on climate change. Farmers, their industry bodies and companies selling their products need to understand this and ‘get ahead of the game’.
While farmers may not get any extra financial incentives in the form of better prices, they need to understand that this is the cost they have to bear to continue to farm and have their products bought by customers.
It also underscores that sustainability concerns are more than the environment.
The reality is that while farmers risk having to pay higher compliance costs and face pressures in their quest to farm sustainably, these moves are a huge step in the right direction.
