Linking compliance to consumer expectations
The way to grow a primary sector business is to provide the consumers of our food with what they want. But in recent years, the focus has been forced away from consumers and onto compliance. This creates the risk that having to put so much focus on compliance might take attention away from the critical focus: what consumers want from their food. Compliance does not grow your business or make you a profit, and it adds cost. Somehow, farmers and growers need to focus on both compliance and consumers, so that compliance can add to the bottom line. For many, this is becoming too difficult, especially for smaller operators; compliance is one of the reasons why today there are so many dairy farms for sale throughout the country.
The reach of compliance is long. For example, Zespri has entered into an enforceable undertaking with Worksafe, arising from a tragic quad bike accident fatality on a kiwifruit orchard. Zespri is a prime example of providing the consumer what they want, resulting in a premium being earnt by Zespri kiwifruit around the world. The enforceable undertaking was entered into because Zespri is committed to making long-term, sustainable health and safety improvements in the workplace, the industry, and the wider community. These included undertaking health and safety reviews of contractors who contract directly with Zespri, running a health and safety forum, and establishing a health and safety tertiary scholarship. The challenge for Zespri is how to make their additional health and safety commitments improve the bottom line profit rather than take away from it.
Perhaps the answer lies in using the increased focus on health and safety as part of their consumer selling proposition. Technology is increasingly bringing information about the growing and supply chain operations to the consumer. Now more than ever, consumers can easily find out how a product was grown, stored, and shipped. This transparency will only increase as consumers want to consider the provenance of their food in their buying decisions. Adverse consumer commentary, particularly through social media, can dramatically affect sales and consumers’ perceptions about the sustainability of a product or a brand.
It is however, easier for an export company that is at “arm’s length” from any accident to use compliance to maintain consumer confidence. The farmer or grower whose employee has been harmed or died in the accident has a much more difficult path. In addition to dealing with the aftermath of an accident, there are the Worksafe processes and, in some cases, court action to manage. The loss of production, compensation, fines, and related costs all come off the bottom line. The end result has to be making the workplace a safer place, and making sure that their workers all return home each night safe and healthy. This cumulatively adds up to a better public and consumer perception of the industry and its social sustainability. But for each farmer and grower dealing with accidents, it is a very difficult process, and one that can put them out of business.
Today, there is absolute focus on compliance across all aspects of the growing operation, audits and checks in place, guides and workshops. What we are trying to do at HortNZ, as are all industry organisations, is assist our growers to achieve the highest level of compliance while growing the profitability of the businesses, without losing sight of providing the consumer what they want.
- Mike Chapman, CEO