Earlier this month the New Zealand Ministry for Primary Industries closed submissions on their draft Food and Beverage Industry Transformation Plan (ITP). An ambitious plan, it is designed to accelerate progress towards the government’s Fit for a Better world roadmap’s goals via two major shifts: enhancing Aotearoa’s traditional foods and scaling up emerging foods.

MPI’s vision for this transformation is:

Global consumers view Aotearoa as the home of sustainable, innovative, and high-value nutrition, foods, beverages, and technologies. The sector is the foundation of a high-wage, low-emissions economy where all New Zealanders thrive.

The plan proposes four transformations to get there:

Orienting the sector towards consumers and the market
Increasing investment in innovation and attracting capital for growth
Building capability to innovate, commercialise, and improve productive capacity
Regulatory settings enable food innovation

Circularity applauds the recognition of climate change's impact on how we grow food as a key driver for transformation in the industry. As we have seen over the past summer, extreme weather events can devastate large tracts of productive land. On a slower scale, we are seeing growing areas for crops shifting as average temperatures increase. These acute and chronic challenges need leaning into, and bold direction to solve.

We too are seeing the signals from consumers that their needs for more sustainable food and beverage products are not being met and the significant opportunity this presents. Nestle alone is investing $1.7 billion in regenerative agriculture so that their products can meet market expectations; noting that organic, free range, grass fed are no longer sufficient claims to drive purchase decisions. Consumers increasingly expect that what they purchase contributes to positive systems change, that it does good, not just less harm. Aotearoa has to step up if it is to compete on the global playing field.

And so onto the areas where we believe the draft could go further and our proposals for change.

Bigger kete, bigger holes

Circularity’s view is that the ITP needs strengthening with regards to regenerative agriculture and food waste. Under the current plan, there is a heavy focus on creating new value through new markets and innovative foods, and little through optimising what we already produce.

Our challenge is not how to produce more food, but how to realise more value in new ways, wasting less, with less impact on the planet. We can do that by transforming the linear way we take, make, and waste our food to circular loops of regeneration and value creation.

We all know the statistics — we produce more food than the world needs, yet nearly 1/3 of all food produced in the world is wasted — that's 1.3 billion tonnes annually (Source: UC Davis).

The linear nature of our food system is wasteful, polluting, and depletive – it is the primary driver of biodiversity loss and accounts for a third of global greenhouse gas emissions. Essentially, it is an accelerated distribution model centred around only 12 crops and five livestock species for 3/4 of our food supply. As a result, it accelerates the impacts of climate change, environmental pollution, and undernourishment.

In Aotearoa this looks like food rescue organisations redistributing around 8,000 tonnes of food each year and, in 2019, agriculture contributing around 91% of the country’s total biogenic methane (Source: Ministry for the Environment).

According to the Ellen MacArthur Foundation, “A circular economy for food could reduce the sector’s greenhouse gas emissions by 49%, or 5.6 billion tonnes of CO2, by 2050. By creating a circular economy for food, annual benefits worth USD 2.7 trillion could be generated for cities alone by 2050.”

If we simply focus on growth opportinities Aotearoa’s food and beverage industry without reconsidering the underlying economic model, we risk perpetuating its negative effects on our environment and communities. Applying circular economy principles to the ITP, we propose the following changes to ensure that the industry delivers benefits for people and the planet.

A broader church for better outcomes

Orienting the sector towards consumers is a good start. We propose going further to consider the needs of customers and the planet. Bringing together the needs of all three into a decision-making framework for future opportunities would allow the industry to take a multi-stakeholder approach to developing solutions which are desirable, profitable and sustainable.

The internationally recognized planetary boundaries provide an science-based approach to understanding the needs of the planet and hot spots for change. With regards to customers, we regularly see them acting ahead of consumer expectations in response to shareholder, regulatory and competitive pressures. We would like to see a transformation plan and roadmap that considers these three stakeholders together.

A food and beverage industry geared to meet the needs of consumers, customers and the environment is going to be more resilient and responsive to the rapid changes it is facing now and into the future, whether those challenges are price, preference, climate or biodiversity. In doing so, we can create a plan which delivers enduring value and employment to Aotearoa.

To communicate this shift, we see the Made with Care campaign expanded to include care for people and planet. A world leading campaign to communicate NZ’s leadership in health & wellbeing, biodiversity, water quality/replenishment and soil health.

To support this campaign, the plan should develop a market-facing data platform to accelerate the availability of industry growing, production and sourcing data to customers and consumers so that they can have confidence in the claims, origin and quality of NZ food and beverages being represented through Made with Care.

With brand campaigns awash with green claims, we need to be able to succinctly communicate Aotearoa’s industry advantage and back this up with absolute transparency, leaning into where we can do better and allowing stakeholders to hold us accountable for making it happen. Again, transformation occurs when we can take the entire food system on a journey towards better outcomes. By linking our climate and biodiversity goals for this sector to how we communicate our products globally, we elevate our story to one of true integrity and authenticity.

Using the whole plant

Food innovation is critical to respond to climate change and for the sector to grow. To fuel this change, the ITP should look to adapt and accelerate existing solutions rather than recreate what already exists on and off-shore.

This looks like funding the Food Innovation Network to lower the financial barrier to entry and rapidly expand their model of shared access to R&D and production capabilities. Further, we think there is likely more than enough underutilised capacity across the country’s many food producers to be able to create a platform for new businesses to launch from. Through shared access, contract manufacturing and commercialisation, the ITP could meet its aspirations to enable scale-up faster and with less capital.

Across these facilities, we see the role of ITP’s new food and beverage ‘navigators’ including guidance for entrepreneurs and SMEs to shift away from linear food production to deliver waste reductions, reduce emissions and improve the health of our ecosystems. With a knowledge of the circular economy, navigators can help new businesses develop resilient and profitable business models from the outset giving them a long term advantage over established companies in NZ and abroad who are having to reinvent themselves.

Green shoots of growth

Change doesn’t come cheap. To transform the industry, it will require investment. The key to attracting this investment is green innovation and the global signals support this. Nestle alone is set to invest $1.7 billion in the next 5 years to increase the portion of regenerative agriculture grown food in their value chain. Across the ditch, the centre for sustainable finance and Macquarie asset management are funding Australia’s regeneration. The ITP should look to set up Aotearoa’s own circular food impact investment fund, or to attract funding from global impact investors, such as Purple Orange Ventures, Hatch, and Root Capital.

The ITP recognises that salience of NZ food and beverages is low among a range of global markets. To overcome this and attract investment, we see an opportunity to showcase the exceptional capabilities of our industry. By bringing together research agencies and commercialisation teams to host global think tank design sprints in New Zealand for customers, we could solve emerging problems, build engagement and draw investment for industry leading collaborative solutions.

Accelerate with XLabs

With strategy, infrastructure and funding addressed, attention turns to capability. Building on the plan’s call out for capability programs for Māori, leadership and graduates, we see a clear need to build individuals’ knowledge, and application, of the circular economy. It is no good having an industry geared to the needs of the planet if those working within it don’t have the skills to make it happen. We know from the Sustainability Professional Report 2022 that 91% of individuals and businesses in New Zealand believed there was not yet enough capability within their organisations to address future sustainability topics.

XLabs, Aotearoa’s circular economy program for business can bridge this gap. A proven, award winning program which has already seen some of Aotearoa’s largest food and beverage businesses like Silver Fern Farms and Lion design market ready solutions for reducing waste and greenhouse gas emissions.

We call for MPI to support and fund a three-year XLabs: Future of Food annual accelerator programme that delivers opportunities for interns, capability building for the industry, and an innovation pipeline. This could provide up to 10 internships at Circularity and connected businesses for the duration of the programme, rotating across business challenges and innovation projects. With both an online and in-person program, It could provide the training ground required for literally 1,000s of businesses large and small and ultimately deliver up to 20 innovative, transformative solutions ready for investment every year.

Our Bold Vision

If the ITP does all these things, we think the industry can achieve a bolder vision of the future:

Aotearoa New Zealand is the home of sustainable, innovative, and high-value nutrition, foods, beverages, expertise, and technologies to improve the health and well-being of consumers worldwide.
The food and beverage sector generates economic resilience driven by decent employment and environmentally regenerative practices so that people and the environment thrive in Aotearoa.

A transformation that goes beyond perception to a reality of what is. We don’t think the ‘global consumers view’ is enough. Viewing New Zealand products as sustainable is one thing, while experiencing them is another. Global consumers now seek more than what is shown in media campaigns, so let’s not focus our efforts on achieving only a perception of reality.

“We must not be shy of asking the tough questions and challenging existing assumptions as we prepare ourselves for change.” — :WELL_NZ summary – Reframing New Zealand's food sector opportunities

Transformation also means we need to go bolder with what outcomes we are aiming for in our efforts, especially given the price of the efforts from farm to fork. We propose our aim for this transformation plan is to improve the health and well-being of consumers worldwide, which includes all New Zealanders. If our transformation efforts don’t improve the health and well-being of our people, do we even have a right to play globally?

This bold vision calls out the value of our expertise alongside the actual products we create. For too long, we have not valued and marketed our knowledge — let’s catch up with the rest of the world and realise the true value is not just in the products we make but the know-how of the ways we produce our food and beverages. We need to get better at showcasing our knowledge, rather than just selling products to our global markets, particularly as the world seeks mitigation and adaptation strategies. We can address this need starting with mātauranga Māori living systems knowledge.

As we continue to face a changing climate, our goal for the sector has to be economic resilience. We see the only way of achieving this is by taking care of people and the planet, which starts by giving more than we take from the land and from our people.

If we achieve this vision, we can lead the way with generosity and abundance, working with nature, not against it, to produce nature-positive food the world loves.

Circularity’s response to the Food and Beverage Industry Transformation Plan