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Food & Nutrition Security
1.
CTA/CCST
Marketing Boards Adding Value to Local Foods The Role & Impact of Marketing Boards Ian Ivey November 2012 ©
2.
CTA/CCST
Marketing Boards Setting the Scene November 2012 ©
3.
CTA/CCST
Marketing Background research Boards Desktop research Stakeholder survey Stakeholder conversations November 2012 ©
4.
CTA/CCST
In 2012 these are the big sector Marketing Boards drivers November 2012 ©
5.
CTA/CCST
Marketing The food and H&W trend is Boards strengthening November 2012 ©
6.
CTA/CCST
Thriving in the 21st century Marketing Boards requires a shift … VALUE Solutions Systems Fascinations Bundles Commodity products KNOWLEDGE FACTOR DRIVEN EFFICIENCY DRIVEN INNOVATION DRIVEN Jamaica T&T Denmark November 2012 ©
7.
CTA/CCST
…and that shift is being driven Marketing Boards by consumers…. Age Defiance Fascination Egoism Global living Sustainability Health / wellness Gifts of time November 2012 ©
8.
CTA/CCST
….who create a Customer: Hi-value Marketing demand pull… Vol X $$$ Boards $ Customer: $ $ Mid-value $ Vol X $$$ $ RETAIL $ Customer: $ Value Add Lo-value Processors + Plant $ Vol X $$$ - material $ 1st Stage + Processors Equipment - Producers + Inputs - + + - Scale / - systems Facilitators: R&D institutions, Government Incentives, financiers, logistics providers, marketing and branding, health and wellness, etc November 2012 ©
9.
CTA/CCST
…and this defines the viable Marketing Boards market spaces going forward FUTURE CONSUMER / CLIENT ‘WANTS’ & ‘NEEDS’ - GROWTH DRIVERS NATIONAL BEST BET OPPORTUNITY AREAS NATIONAL RESOURCES NATIONAL ENABLERS NATIONAL CAPABILITIES (All types) (All types) (All types) November 2012 ©
10.
CTA/CCST
Marketing Agriculture as a % of GDP Boards 40 20 0 Jamaica Trinidad & St. Vincent Dominica Saint Lucia Tobago -20 1995 2010/11 -40 Change -60 -80 -100 November 2012 ©
11.
CTA/CCST
Marketing How does that compare? Boards New Zealand • Agriculture 4.7% of GDP in 2011 • Value added exports a further 13% of GDP, 40% high value added Australia • Agriculture – 4% of GDP in 2011 • One of the lowest cost commodity producers internationally In T&T value-add estimated to be 2.8% of GDP in 2010 November 2012 ©
12.
CTA/CCST
Marketing Boards What is Food & Nutrition Security? November 2012 ©
13.
CTA/CCST
Marketing A couple of views Boards “Food security means you need to be able to feed yourself. If it is based upon core competencies then it would mean you would focus on those areas which you are best at. Food security is not just about growing your own food.” “There is a need to define what is meant by ‘national food security’. In my view it is the ability of a nation to feed itself with the least risk – at least in the basic food area. It doesn’t mean we need to grow all our own food. It means we need to set up a structure to minimise risk. In that case it may be better to contract the growing of food to Guyana if they can produce it more competitively.” November 2012 ©
14.
CTA/CCST
Marketing A good question from Raffique Boards Shah! T&T govt. plans to reduce food imports 50% by 2015 = USD 335 million p.a. Agriculture = 0.3% of GDP today 62.5% of current food imports in 9 categories: • 70,000 tonnes of wheat. • 51,000 tonnes of maize. • 15,000 tonnes of cheese and whole milk. • 28,000 tonnes of compressed livestock feed. • 28,000 tonnes of rice. • 15,000 tonnes of soybean oil. • 70,000 tonnes of sugar. • 4,000 tonnes of beef. • 4,000 tonnes of dried milk. What substitutes can be produced in T&T at competitive international prices – and by whom? November 2012 ©
15.
CTA/CCST
Marketing And even more so because, for Boards example… ..in Jamaica 97.8% of all farms are <5ha.. .. And 78.7% are < 1ha.. ..how can they produce ‘cheap’ commodities compared to highly mechanised, systems-based 3000 ha Australian wheat farms? November 2012 ©
16.
CTA/CCST
Marketing A view of how we could achieve Boards that “The agricultural sector in small island nations should be maximising the addition of real value to locally produced food and the value created should be used to pay for the import of cheap commodity foods (which will always be the case in relative terms if global food prices continue to increase).” What a great idea! November 2012 ©
17.
CTA/CCST
Marketing Why focus on value adding? Boards • Fresh produce is expensive in Caribbean countries. • Low-cost commodity products can’t be produced on small-scale units. • ‘Cheap food’ is being relegated to history. • Poor people are less able to afford fresh nutritious foods - so we need to lift incomes. • 400 – 1000%+ value can be generated from basic raw materials in the region – and lift incomes. November 2012 ©
18.
CTA/CCST
Marketing Boards Marketing Boards vs. Entrepreneurs November 2012 ©
19.
CTA/CCST
Marketing What’s the Marketing Boards’ Boards track record (-ve)? Jamaica • Production down, little value creation, disillusioned growers, ‘cooking the books’ Grenada • Little value creation, no adjustment, ‘anti-entrepreneur’ Saint Lucia • Competing with the private sector, poor collaboration St. Vincent & the Grenadines • Competing with the private sector, distorting the market Trinidad & Tobago • ‘Anti-entrepreneur’, little value creation, misguided efforts, ‘cooking the books’ November 2012 ©
20.
CTA/CCST
Marketing Is this the way to address FNS? Boards Sell to KFC at US 23 c/kg Buy from farmer at US 69 c/kg Source: http://guardian.co.tt/business/2012-11-18/sweet-potato-fries-deal-turns-sour November 2012 ©
21.
CTA/CCST
Marketing What’s the Marketing Boards’ Boards track record (+ve)? Guyana • Rice board opens up new markets, non-monopoly St. Kitts & Nevis • Facilitation of grower/client trading success Trinidad & Tobago • Export ready certification and market development November 2012 ©
22.
CTA/CCST
Marketing A success story in Nevis Boards By facilitating rather than regulating November 2012 ©
23.
CTA/CCST
What are some big Marketing Marketing Boards Board issues? Designed for a different age • Confused and conflicting agendas Traders rather than marketers • Political manipulation and corruption Production rather than market driven November 2012 ©
24.
CTA/CCST
Marketing What’s the Entrepreneurs’ track Boards record (+ve)? Antigua & Barbuda • High value products, value chain development, customer focus Grenada • High value creation from cocoa, nutmeg, value chains, export, customer focus Saint Lucia • Product innovation, value adding, value chains, exports, customer focus St. Vincent & the Grenadines • Healthy food and nutrition, customer focus, value chain Trinidad & Tobago • High value creation from cocoa, value chains, exports, healthy food, customer focus November 2012 ©
25.
CTA/CCST
Marketing What are some big Entrepreneur Boards issues? Scale of operations • ‘Coopetition’ and collaboration Export capabilities • Infrastructure and funding Standards and regulatory compliance November 2012 ©
26.
CTA/CCST
Marketing Boards Going forward - some thoughts November 2012 ©
27.
CTA/CCST
Marketing What are some reality gaps? Boards Focus Area State Boards/Agencies Successful Entrepreneurs Orientation Production driven Customer/client driven Product Traded Marketed Agendas Confused Focused Direction Politically oriented Market oriented Mentality Commodity Value-adding Structure Stand alone Collaborative Value Chains Poorly developed/integrated Highly developed/integrated Food security Local state driven Global value driven Agriculture Is social Is a business Nutrition/H&W A second thought A high growth opportunity area PPPs ‘We know best’ ‘We know best’ November 2012 ©
28.
CTA/CCST
Marketing Who is best at picking priority Boards sectors? Ranking ‘Top Down’ Priority Sectors ‘Bottom Up’ Priority Sectors 1 Agriculture (11%) Food & Beverage (11%) 2 Tourism (11%) ICT (9%) 3 ICT (9%) Agriculture (8%) 4 Financial Services (8%) Fashion (8%) 5= Agro-processing (6%) Health & Wellness (7%) 5= Creative (7%) Source: IADB Priority Sector Research, NEXT, 09/09 November 2012 ©
29.
CTA/CCST
Marketing Innovation creates value Boards US$ 400 – 1,500/kg + US$ 50 – 300/kg US$ 2 – 4/kg US$ 15 – 25/kg Factor X – e.g. flavenols, PEA, Theobromine, Anandamine, Methylglyoxal November 2012 ©
30.
CTA/CCST
Marketing How much value could we Boards create? Market Focus Gross Gross Profit/ Revenue acre/year Farm Gate $11,250 $1,550 Direct Export $17,500 $3,850 Origin Specific Cocoa $35,000 $10,400 Farmgate Chocolates $280,000 $100,000 Signature Chocolates (e.g. Gina’s, Cocobel, Tobago $1,020,000 $350,000 Estate) Health & Wellness ‘Chocolates’ $3,500,000 $1,000,000+? Entrepreneurs are already showing us Source: ‘Cocoa Research Unit – Past, Present and Future’, a Power Point presentation by Dr Path Umaharan, 2012 November 2012 ©
31.
CTA/CCST
Marketing Big value adds Boards November 2012 ©
32.
CTA/CCST
Marketing 10 things needed for a thriving Boards agricultural sector 1 The right scale of operations (viability - $$$/unit area) 2 The right product/crop focuses (more on the unique) 3 The right value propositions (more high-end niches) 4 Develop modern win-win value chains (> share of end-price) 5 The right branding and marketing approach (less trading) 6 More alliances, partnerships and networks (must be win-win) 7 Appropriate technologies (often quite simple) 8 Attractive to young people (‘friendly’ working conditions) 9 Adopt a systems approach (agriculture is a business!) 10 Financially viable (ROI of 5 – 10% - minimum!) November 2012 ©
33.
CTA/CCST
Marketing Making PPP’s work to deliver Boards FNS Public Partner Contribution Private Sector Contribution Access to land at a realistic cost Optimal utilisation and maintenance of that land Standards setting and monitoring Standards implementation Market access and support Market exploitation Appropriate R&D Application of R&D Infrastructure Effective infrastructure use Facilitation Implementation Regulatory Commercial A single regional market Supplying that single market A future vision (majority buy in) A future vision (majority buy in) Food safety and health regulation Compliance with safety and health requirements Training and skills development Modern attractive and rewarding work environments Technology testing and introduction Technology application Consumer education e.g. nutrition Consumer aligned solutions, including nutrition November 2012 ©
34.
CTA/CCST
A clear end-goal helps define the Marketing Boards challenge GDP/Capita 2030 US$ 20,000+ (Developed nation level) GDP/Capita 2010 US$ 8,300 A 250% value add on everything is required! November 2012 ©
35.
CTA/CCST
Without a long-term vision and Marketing Boards PPPs, how can we achieve FNS? e.g. Vision 2030 1 – 2 Years November 2012 ©
36.
CTA/CCST
Marketing Boards Thank you! November 2012 ©
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