Ian Proudfoot, global head of agribusiness at KPMG, examines the success of the All Blacks in competing internationally and asks what the food industry can learn from them.
The All Blacks set the bar for skills, consistency and results that others teams aspire to reach in international rugby. As the World Cup draws closer later this year, the tension in New Zealand builds and every conversation seems to include a rugby analogy.
Discussions on the competitiveness of New Zealand’s agri-food sector also get a rugby overlay and I have recently been challenged on what needs to be done for the sector to become the All Blacks of global agri-food. The supplier of products that sets quality and innovation benchmarks others aspire to, winning in the markets in which we choose to compete.
The fact that this challenge is raised indicates that the leaders of the New Zealand agri-food sector recognise we do not compete in global markets with the consistency of the All Blacks. Despite having lived in New Zealand for over 20 years, I have not been able to bring myself to support them, but I recognise key elements of their system that has sustained competitive advantage. There are learnings in this for all businesses.
Failures at the 1995, 1999, 2003 and 2007 World Cups were analysed by pundits and the population to the nth degree but in each case the root cause came back to individuals not being clear on what to do when the competitive pressure really came on at the business end of the tournament. There was no system everybody could rely on. People were not clear on their role. This meant the results did not reflect the sum of the parts of the team because they were not really operating as a team but as a group of individuals wearing the same kit.
After 2007, the All Blacks clearly defined their system and this has laid the foundations for their decade of success. As a small food-producing nation, many organisations compete in a scattergun way, reacting to opportunities that walk through the door, as any sale is better than no sale. As a consequence, they end up trading away value because they lack cohesive plans and systems they can rely on.
Zespri, the global kiwifruit exporter, was established to systematise the kiwifruit sector’s approach to global markets and has reaped the benefits. Having made a rapid recovery from a major biosecurity incursion, Zespri has subsequently grown into a business that delivers NZ$3bn (€1.8bn) of Zespri quality fruit sourced from multiple countries to customers around the world 365 days a year at a consistently higher price point than any competing product.
Another attribute of the All Blacks’ improved competitiveness has been their approach to leadership. It was highlighted in the World Cup failures that there was over reliance on a Jonah Lomu or a Richie McCaw type figure to deliver for the team as a whole, so they changed the hierarchy within their camp to introduce more leaders. More people with the ability to make decisions in response to changing circumstances, to hold people to account for their actions and to build their leadership pipeline.
Leadership depth is constantly highlighted as a constraint on industry competitiveness. During the sunset years, when New Zealand was going to ride the knowledge wave away from traditional productive industries into digital and creative exports, current and future leaders were actively encouraged to pursue careers outside the sector. This created a leadership void that is still constraining industry growth.
The disruption facing the global food sector creates a platform to attract talent. Young people want to change the world. There is no better sector of the global economy to make a real impact on poverty and inequality than the agri-food sector. In New Zealand, we have developed an agribusiness programme that is being rolled out to senior school students to attract them to the industry.
The agri-food industry and government have partnered in Te Hono, an executive development initiative which collaborates with Stanford University to expose leaders to cutting-edge thinking and to enhance leadership capability across the sector and improve competitiveness.
Twenty years on, the All Blacks’ capitulation to France in the 1999 World Cup semi-final is still a deep scar on New Zealand's sporting psyche. The lack of mental and physical resilience was not what New Zealanders expect from their flagship team. The All Blacks have since focused on developing the mental resilience needed to trust the system when everything seems to be going wrong.
This resilience crystallises itself in an absolute belief that there is always a way to win, which has become a hallmark of the All Blacks’ success in the last decade (with maybe a couple of exceptions in Chicago and Dublin in recent years).
When New Zealand’s agri-food businesses succeed globally, they demonstrate resilience to overcome the challenges of doing business internationally from the bottom of the South Pacific. Overcoming trade restrictions, tariffs and non-tariff barriers, as well as language, currency, cultural and consumer challenges, tests the resilience of any organisation as it takes significant time and money to develop valuable export markets.
One organisation that clearly understands this and has had the fortitude to play the long game is The New Zealand Merino Company. It has invested in building long-term relationships between farmers and brand owners, such as Icebreaker and Allbirds, which deliver consistent value to all regardless of whether it is a good or bad year in commodity markets.
Winning in the world from a small country like New Zealand is hard as we lack the scale needed to be relevant to most people. I have often felt if New Zealand fell off the map and stopped supplying food to the world, apart from a short-term blip in dairy prices (which I guess would correct in six to 12 months as other countries increased supply), most people would not notice.
The All Blacks succeed on a world stage by collaborating with partners, both locally and globally, that support them in being relevant to the global sports market. By working with Adidas, AIG, Air New Zealand and ASB Bank, among others, they collaborate with companies that have common values and aligned goals.
The effectiveness of collaboration across the New Zealand agri-food sector is a regular talking point. We are good at talking about collaboration. We need to be better at actually collaborating to bring the capital, access, brands or technology that makes us relevant in global markets.
Collaborating means placing reliance on a partner and taking on the risk that they may not deliver on their side of the bargain. It means giving up some control to benefit from the sum of the parts. To date, many New Zealand businesses have been unwilling to take this leap. We are, however, seeing inherently collaborative businesses evolve.
A good example is Miro, a limited partnership structure which has attracted investment from many Maori organisations, with the objective of establishing a globally relevant berry business based on unique plant varieties and an ability to find a valuable use for under-utilised land.
Meticulous planning goes into every test the All Blacks play. From the logistics of training through to developing the game plan, everything is analysed and the opportunities to gain that extra 1% or 2% that can be the difference between winning and losing, particularly when competing overseas, are identified and captured. Being clear on where you can win and exploiting these opportunities are as relevant to agri-food businesses competing internationally as they are to the All Blacks.
As a small producer of food and fibre, we do not have the capacity to win in every market so it is critical we select the market niches where we have a competitive advantage that gives us a position to win. The increased awareness of this has become more apparent in recent years with businesses becoming more sophisticated in targeting the best opportunities.
A good example is Spring Sheep Dairy, a sheep milking venture, which developed its go-to-market strategy based on a detailed understanding of the most valuable niches available to it. This has resulted in the business changing the products it sells and the markets it targets to capture more value from the milk it produces.
Competing in global markets is hard, just as winning consistently in elite sport is hard. New Zealanders take great pride in the success of the All Blacks but probably don’t recognise our success in global food and fibre markets to the same extent.
There are many successes the country should celebrate, most notably the more than tripling of exports to China over the last decade. Success in international markets doesn’t just happen. It takes sustained effort and investment.
The exciting thing is our successes have been achieved despite the many opportunities we have to improve. I regularly challenge the industry to aspire to grow our NZ$42bn (€25bn) of agri-food exports to NZ$100bn (€59bn) in the coming decade and to capitalise on the disruption of the global food system.