CAN THO, VIETNAM – Today’s agriculture industry faces many external changes, ranging from the positive impact of technological advancements to increased consumer expectations and the detrimental effects of climate change on farm productivity. Keeping up with the pace of change – and predicting future changes – is inevitably a challenge for the sector.
However, there are some great examples from agribusinesses in Asia who are proactively responding to change and considering the factors that will have the greatest impact on their industries. At this year’s Asia-Pacific Economic Cooperation (APEC) Food Security Week, I had a number of interesting conversations with companies who are doing just this.
In a conversation with a major agricultural chemical input company, talk turned to what the future might look like for their industry. In their opinion, higher standards are required in the safe application of chemicals, especially if smallholders are to become embedded within global supply chains. Additionally, they believe that drones, as both as a crop observation tool and a delivery mechanism for agrochemicals, have the potential to be a gamechanger. They envisaged a future where (i) agrochemical companies reformulate their products for application by drone sprayers, (ii) that a cadre of drone sprayer operators will need to be trained, accredited, and registered, and (iii) they would increasingly take on the responsibility of safer and more finely tuned application of agrochemicals.
Separately, a major international food company told me about a series of challenges one of their core products – a semi-prepared convenience food – had recently faced as a result of changing consumer preferences. Sales of this product had been flatlining in Asia. The company’s food scientist was called in, who identified that the product range was not tuned to the tastes of South East Asian consumers. He tweaked the flavor, but not to the extent that other palates would detect the change. Sales improved almost immediately.
The company’s marketing lead questioned the price point of the product, insisting that a 30% reduction was necessary. Tentatively the company tried selling smaller pack sizes at a cheaper price, dropping by 6% each time. Each step made a difference and sales edged up. But the critical change was when the price point finally dropped to the recommended level. Now, at the right price point and flavor, sales rocketed.
Another critical issue emerged when a key ingredient, dried egg powder, became unavailable. They produced a batch intentionally without egg powder for internal taste-testing, and a second version for a full sensory evaluation with a larger panel. Since no significant difference could be detected, the decision was taken to go ahead without the egg powder. Now, throughout the region, this product no longer contains what was thought to be a vital ingredient. The most interesting observation here is that consumers were extremely sensitive to the flavor of the sauce, but indifferent to a major change in the recipe for the staple ingredient.
Read this summary of the APEC meeting discussion themes and highlights from Grow Asia’s Country Partnerships Manager, Reginald Lee.