"Consumers want to know..."
Prime Future 134: the newsletter for innovators in livestock, meat, and dairy
Every livestock & meat conference the last 15 years:
"cOnSuMeRs want to know wHeRe their food comes FrOm."
Like it’s the answer to all the questions. Like it’s easy.
Which consumers?
What do they want to know?
How do they want info presented?
How much are those they’s willing to pay for this add'l info?
Consider this week’s newsletter the tee-up for a deeper dive into traceability & transparency.
As one does in 2023, we start with ChatGPT:
Let's accept those definitions and benefits as a reasonable 30,000-foot view summary. It’s all neat and tidy and rationale and obvious.
But zoom in to 29,999 feet or below and it quickly gets complicated & messy:
What capabilities <people, processes, systems, technology, pricing, business models> does it take to achieve traceability / transparency?
Where are the costs incurred and the value captured?
What can we learn from companies doing these things well? What did they learn the hard way?
What are the biggest bottlenecks to realizing these aspirations?
Are push (regulation) or pull (commercial) dynamics more likely to impact trajectory and long-term outcomes?
How much overlap is there between these two ideas and how can that overlap be leveraged? I'm guessing no, but are the ideas ever at odds with one another?
How do the dynamics differ across the different proteins?
One reason this whole topic is interesting is that implications span all the way from what happens at the farm to what happens in the board room of major processors/retailers/foodservice companies. And to ignore either end of the spectrum is to likely get it wrong.
Here are my starting hypotheses:
Transparency or traceability? A
distinction without a difference.No one cares until someone is willing to pay. Additional cost only makes sense if it creates additional value that can consistently be captured.
In order for any variation of traceability/transparency to be a long-term sustainable thing,
it has to create value for 👏🏽 every 👏🏽 single 👏🏽 part 👏🏽 of the value chain that participates.As premium brands push the boundaries of supply chain capabilities, there will be
halo effects on commodity production.The limitations are market-based (trust, commercial terms) not tech-based.
The right combo of product, production attributes, business model, supply chain alignment, people, processes, tech, and brand will create some very big winners as a result of transparency. It’s not for everyone tho.
As we explore some of the questions above, let's see which of those hypotheses hold up.
It’s amazing how the talk of consumers demanding traceability went away when the pandemic hit and we realized how fragile the whole system is. When grocery shelves emptied it was on a price is king sliding scale. Organic and all natural premium products were the last products to move. Fast forward a couple of years and we are right back to the same old discussions, as if we learned very little.
Sure, consumers say they want all sorts of things but in this instance, especially when you consider the current narrative around painfully high grocery bills, it seems highly unlikely they’ll pay for it, making it a moot point entirely.
Thoughts? That was quick! Anyway.....no one ever is willing to pay. Walmart/costco (costco is worse imho) does not say "hey please do this 33rd party audit at our cost so we can pay more to you producer/processor". Its, "do this $xxxx dollar 40th party audit so we can mark up Y produce with a sticker saying its special. Oh we wont pay you anymore or really reward you at all. But hey we will buy it at a loss to you if thats ok? Unless a guy in Peru can make it even cheaper even without audits then all agreements are off"
The consumer deal IS fickle. Who wants what? Why? The person who told my associate (tdf honest) the other day he didnt show calves on his vlog since dairies kill all of them. WTH....where does this come from, how can they not find the facts in like 15 seconds? These people VOTE for people who make the reg which we have really more issues with than the end product in my mind. Generally speaking its safe and abundant and cheap. But the wildly misinformed electorate and their chipping to a rep for some un needed regulation are the hard thing to fight/manage. Anyway...what is education and what's selling/differentiating?