New shifts in sustainability trends continue at pace
New shifts in sustainability trends continue at pace
The final leaders’ communique from the G7 states: “2021 should be a turning point for our planet as we commit to a green transition”.
Many of the sustainability trends in business that were on the rise last year are continuing at pace.
The pandemic highlighted the interconnectedness between social, environmental and economic challenges. It reinforced that an approach, centred around strong environmental, social and governance (ESG) principles is important for a sustainable future and that companies with strong track records in these areas tend to do well in the long-term.
But there are distinct new shifts in sustainability that have emerged over the past year that will shape the agenda and have a major impact on business in the months and years ahead.
Increased data and disclosure to counter greenwashing
The demand from consumers for sustainable business practices brings with it a growing concern that greenwashing is being used to obfuscate environmental credentials.
Recent audits have shown this concern has substance. A study of 12 of the biggest British and European fashion brands found 60 per cent of environmental claims could be classed as “unsubstantiated” and “misleading”. In another study, a sweep of company websites across a range of sectors by the European Commission found that green claims in 42 per cent of cases were exaggerated, false or deceptive under EU rules.
There is a growing expectation that companies will substantiate claims made.
Going a step further, some consumers and investors are expecting companies to disclose a plan for how their business model will be compatible with a net-zero economy — including detail on how that plan is incorporated into a long-term strategy that it is reviewed by the board of directors.
Earlier this month, former US Vice-President Al Gore told the Bloomberg Green Summit: “we must be vigilant about the rising threat of greenwashing or risk derailing the hard-won progress” that has been made in recognising the climate crisis.
He also noted that sustainable investing has “entered the mainstream,” providing even more openings for potential greenwashing.
Gore is right — sustainable investment opportunities have begun flooding the market to meet demand from investors looking to make decisions aligned with their ESG values. Of the S&P 500, about 90 per cent of companies publish sustainability reports, yet only 16 per cent have any reference to ESG factors in their filings — clearly demonstrating the gap between what companies voluntarily publish and regulatory disclosure.
To counter this, a broad range of requirements are being swept in to standardise the current patchwork of regulations and disclosure frameworks.
In March, Wall Street’s top regulator the Securities and Exchange Commission (SEC), announced the creation of a Climate and ESG task force to develop initiatives that will “proactively identify ESG-related misconduct”.
“Climate risks and sustainability are critical issues for the investing public and our capital markets,” said SEC acting Chair Allison Lee.
The task force will use sophisticated data analysis to identify potential violations, and evaluate and pursue tips, referrals and whistle-blower complaints on ESG-related issues.
The CFA Institute, a global association of investment professionals, is developing ESG standards for investment funds and other products, aiming to “provide greater product transparency and comparability for investors by enabling asset managers to clearly communicate the ESG-related features of their investment products”. Draft guidance was released earlier this year that the CFA Institute hopes will be adopted by fund companies around the world.
Global action to build back better and provide a green alternative to Belt and Road
One of the most dramatic turnarounds from the Trump administration has been the pace at which President Biden has thrown the weight of the United States behind global efforts to address global ESG issues.
Many of the Biden administration’s key people have been brought in with a strong environmental focus. Alongside this, the US quickly re-joined the Paris Climate Agreement, a new White House office of climate policy was established, and former Secretary of State John Kerry was appointed as international envoy on climate change.
In May, the White House issued an Executive Order that lays out a whole-of-government approach to addressing climate risks.
The recent Group of Seven (G7) meeting in Cornwall, United Kingdom, saw leaders announce the “Build Back Better World” (B3W) partnership. B3W is a “climate-friendly” initiative to mobilise private capital to help narrow the US$40+ trillion infrastructure need in the developing world which has been exacerbated by the Covid-19 pandemic — and has been described by some as a green counter to China’s Belt and Road Initiative.
Alongside this, the G7 leaders put forward ambitious targets for climate action. One of these targets saw a commitment to long-term strategies to net-zero greenhouse emissions by 2050 as soon as possible, “making utmost efforts to do so by COP26 (the UN Climate Change Conference COP26 in Glasgow in November).”
They also committed to set net-zero targets for energy generation in the 2030s and end direct government support for new thermal coal generation capacity without co-located carbon capture and storage technologies by the end of this year.
All other inefficient fossil fuel subsidies will be phased out by 2025. There was also a commitment made to stop direct funding for coal-fired power stations in OECD nations by the end of this year.
Other commitments made during the G7 that will impact the sustainable finance sector include the mandating of climate disclosures; a commitment to “intensify efforts in enhancing the offer of more sustainable transport modes” including encouraging the phase-out of traditional passenger vehicles in favour of electric vehicles by 2040; and a goal to jointly mobilise US$100 billion per year from public and private sources through to 2025 for developing countries.
These sweeping changes will have wide-ranging implications for governments, business, innovation, and financing.
The final leaders’ communiqué from the G7 states:
“2021 should be a turning point for our planet as we commit to a green transition” and accelerate efforts to cut greenhouse gas emissions, and “we acknowledge our duty to safeguard the planet for future generations” — although some have criticised the G7 for not being more ambitious in financial commitments to developing countries and for not being detailed in the plans to promote a green industrial revolution.
Threats to nature and biodiversity taking centre stage
In 2019, the UK was the first major government to commission a review into the economics of declining biodiversity.
The final report, the 600-page Dasgupta review, was released this year, and clearly links economic success to biodiversity.
It notes that our economies, livelihoods and wellbeing all depend on nature, and considers nature as an asset in the same way as produced capital (roads, buildings and factories) and human health (health, knowledge and skills) are assets:
“We rely on nature to provide us with food, water and shelter; regulate our climate and disease; maintain nutrient cycles and oxygen production; and provide us with spiritual fulfilment and opportunities for recreation and recuperation, which can enhance our health and wellbeing.
“We also use the planet as a sink for our waste products, such as carbon dioxide, plastics and other forms of waste, including pollution.”
The World Economic Forum estimates that $US44 trillion of economic value generation representing more than half of world GDP is moderately or highly dependent on nature. Yet the world’s biodiversity is declining faster than it has at any other time in human history, with the current rate of extinction tens to hundreds of times higher than the average over the past 10 million years — and accelerating.
We can expect to hear more about this and see it impact business decision making. The UK government has published an amendment to its Environmental Bill, requiring new “nationally significant” infrastructure projects — including for transport and energy — to provide a net gain in biodiversity and habitats for wildlife.
Protecting and enhancing nature will need concerted, coordinated action and will be major topics at this year’s upcoming COP15 (UN convention on biological diversity) in China and COP26 (UN climate change conference) in Glasgow.
“This year is critical in determining whether we can stop and reverse the concerning trend of fast-declining biodiversity,” says UK Prime Minister Boris Johnson.
“As co-host of COP26 and president of this year’s G7, we are going to make sure the natural world stays right at the top of the global agenda,” he said. “And we will be leading by example here at home as we build back greener from the pandemic.”
Sustainable Business: Climate Change Commission lays out roadmap
Sustainable Business: Climate Change Commission lays out roadmap
Last month, the Climate Change Commission released its final report: Ināia tonu nei: a low emissions future for Aotearoa, which lays out the roadmap for New Zealand to meet its greenhouse gas reduction obligations of reaching net zero emissions of long-lived greenhouse gases and reducing biogenic methane emissions between 24-47 per cent by 2050.
The 418-page report calls for transformation across almost all facets of the economy and sets out large-scale changes that will need to be taken by central government, local government, individuals, and business.
These changes will result in a hit to New Zealand’s GDP.
The Commission assessed that the level of GDP could be around 0.5 per cent lower in 2035 and 1.2 per cent lower in 2050 than it would be otherwise. Significantly, it says that not acting and delaying key actions could result in the level of GDP in 2050 falling by around 2.3 per cent.
Transport
Transport makes up almost 33 per cent of New Zealand’s total long-lived gas emissions and is the fastest-growing source of emissions.
The report says there is an opportunity to decarbonise transport by 2050 by investing in the right infrastructure and systems, encouraging changes to behaviour, and adopting technologies that are available now and improving fast.
It recommends the Government set targets by 2022 and implement a plan (including substantially increasing the share of central government funding) to increase walking, cycling, public and shared transport to displace vehicle use.
Increased numbers of people working from home and a switch to low emissions vehicles will help, but the report notes the latter will require a “rapid increase” in electric vehicle sales, with nearly all light vehicles entering NZ electric by 2035.
The report also assumes from 2030, short-haul aviation (such as Wellington to Nelson) would take place in new generation planes.
This was modelled with electric planes, but biofuels or hydrogen could also be used to make sustainable aviation fuel for longer distance flights.
Forestry
Around 380,000ha of new exotic forestry (particularly pine) will need to be established from 2021 to 2035. These absorb carbon quickly, reaching their average carbon stock after around 20 years. The Commission recommends a comprehensive plan for new native forests on less productive land.
These absorb carbon more slowly than exotic production forests but will continue to do so for centuries until they reach maturity. This will help offset long-lived greenhouse gas emissions in sectors with limited options to reduce emissions from 2050 and deliver wider benefits for erosion, soil health, water quality and biodiversity.
Agriculture
For agriculture, the Commission says New Zealand needs to reduce its livestock numbers 13.6 per cent by 2030.
It predicts that while New Zealand will still produce roughly the same amount of milk and meat, it will do so with fewer animals, and expects some farms to replace animals with horticulture.
It says low-methane sheep will play an important role (and will help cut methane by 10 per cent by 2030), along with a reduction in the use of fertiliser, and new technologies will need to come on board, such as vaccines that can help reduce emissions from livestock.
Energy
The report says replacing fossil fuels with low-emissions electricity will play an essential part in New Zealand’s transition, requiring a major expansion in the electricity system which should start immediately.
It recommends the installation of new coal boilers is stopped immediately, and a timetable set to phase out fossil fuel use in existing boilers.
New Zealand Institute of International Affairs 2021: Prime Minister Jacinda Ardern interview (video)
New Zealand Institute of International Affairs 2021 conference opening (video)
Opening of the New Zealand Institute of International Affairs 2021 conference, ‘Standing in the Future: New Zealand and the Indo-Pacific region’. Co-hosts Tim McCready and Ziena Jalil.
Agribusiness Report: Accelerating agri trends providing opportunities for NZ
Agribusiness was the shining star for the New Zealand economy last year. Its status as an essential industry meant it was able to continue during lockdowns and provide food to an uncertain world.
But a year on, the world remains turbulent. While we can expect to see markets slowly return to a resemblance of normality as the vaccine rollout continues and lockdown restrictions are reduced, global megatrends impacting the agriculture industry will continue to shape the future of agribusiness.
Need for a cohesive national strategy on sustainability
Covid-19 brought a discussion around sustainable and safe food systems to the fore, with the boosted emphasis on climate change, carbon offsetting and ESG (environmental, social, and governance) credentials all having an impact on the behaviour of consumers.
They are looking for sustainable business models that consider all aspects of the production process — including the impact on natural resources.
Some developments on this were made last month, with the Climate Change Commission releasing its final report: Ināia tonu nei: a low emissions future for Aotearoa. It lays out a roadmap for New Zealand to meet its greenhouse gas reduction obligations by 2050, and calls for immediate action by government, local government, individuals and businesses.
For agriculture, the Commission says New Zealand needs to reduce its livestock numbers by 13.6 per cent by 2030. It predicts that while New Zealand will still produce roughly the same amount of milk and meat, it will do so with fewer animals, and expects some farms to convert from livestock agriculture to horticulture.
It says low-methane sheep will play an important role (and help cut methane 10 per cent by 2030), along with a reduction in the use of fertiliser, and new technologies will need to come on board, such as vaccines that can help reduce emissions from livestock.
Transparency into provenance and supply chains
As part of making more conscious sustainable choices, consumers in some of our major trading markets are demanding detail and transparency on provenance and supply chains of food, to make informed decisions about what they eat. In some cases, this detail is sought down to individual farms and farmers.
A discussion paper on the future of food and the primary sector by University of Auckland thinktank Koi Tū: The Centre for Informed Futures, headed by Sir Peter Gluckman, notes that this trend is one New Zealand can approach with some confidence. We have high social and environmental values, and our primary sector produces quality, safe animal protein with a low carbon footprint relative to our competitors.
But while we have a favourable global profile, Koi Tū says that in order to sustain it for our high-value agricultural exports we must develop a cohesive national strategy that is connected to quality assurance:
“Our national product branding needs to be refreshed and not just seen as a slogan. It needs to be linked to measurable progress on key indicators of value to consumers. These are likely to be origin and environmentally linked.”
The new coal?
Although it may seem extreme, the growing awareness from consumers of the environmental impact of the food they eat means that some are predicting beef to become “the new coal”.
Alternative protein has reached a tipping point where it is becoming mainstream, with plant-based options such as Beyond Meat and the Impossible Burger increasingly common on restaurant menus and in supermarkets. Last year around 13 million metric tonnes of alternative proteins were consumed globally — including those from plant-based ingredients, cultured meat products, and alternative sources such as insects. This represents around 2 per cent of the animal protein market.
Boston Consulting Group (BCG) believes by 2035 — when alternative proteins reach full parity in taste, texture, and price with conventional animal proteins — 11 per cent of all the meat, seafood, eggs, and dairy eaten around the globe is very likely to be alternative.
This could save as much carbon dioxide equivalent as Japan emits in a year, conserve enough water to supply London for 40 years, and promote biodiversity and food security.
In late 2020, Singapore gave the world’s first regulatory approval for meat that doesn’t come from slaughtered animals. Eat Just’s chicken meat is grown from animal muscle cells in a lab, and the company says this “breakthrough for the global food industry” is one it expects other countries to follow.
New Zealand innovators are working to meet this growing demand for alternative protein. Auckland-based Sunfed Meats recently launched its Bull Free Beef product made from vegetables and cocoa butter, alongside its range of other plant protein “meat analogues” including Chicken Free Chicken and Boar Free Bacon.
FoodHQ, which represents NZ’s food innovation organisations, said in a recent report that emerging proteins are a diversification opportunity that could complement New Zealand’s traditional animal-based protein sectors.
“While our dairy products, meat, wine, apples and kiwifruit will underpin NZ’s food exports for many years to come, we must explore the opportunities to continue adding diversity to our food product offering in order to meet global demand,” says FoodHQ chief executive Abby Thompson.
Tech to boost productivity and reduce emissions
Sensors, robotics, big data and artificial intelligence are other technologies shaping the future of food production and farming.
They all contribute to what is known as precision agriculture, which was already becoming mainstream before the pandemic, but has in the past year demonstrated its importance in creating resilient farming systems.
A local example that integrates several of the above-mentioned technologies is Halter — a company developing a smart collar for fence-free animal management. Last month, Halter secured $32 million in a Series B round led by Australian VC firm Blackbird Ventures (supported by current shareholders including Rocket Lab’s Peter Beck).
The collars, loaded with Bluetooth, GPS and solar panels, allows farmers to virtually herd their stock from anywhere by using an app on their smartphone. Sound and vibration help direct cows, and the collar can also monitor the wellbeing of the animals by detecting unusual movement which might indicate if it is lame or on heat.
The technology works well with NZ’s farming system, as well as other regions that put an emphasis on free-range, pasture-based farming such as Europe and South America.
As new technologies like Halter emerge and farms become better connected to digital infrastructure, the use of precision agriculture and other technologies in agriculture will dramatically accelerate.
These technologies will play a critical role in helping the industry operate with more resilience, increase food security, boost productivity and reduce emissions in farming systems. All of these are integral aspects of the megatrends shaping a sector that is so important to New Zealand’s economy now and into the future.
Agribusiness Report: Why care is a consideration, according to NZTE
New Zealand has relied on tourism as a way of keeping us alive in the hearts and minds of global consumers.
Research released by New Zealand Trade and Enterprise (NZTE) in April revealed that the five major challenges New Zealand exporters are grappling with are: building brand awareness, finding the right partners and channels, dealing with strong overseas competition, understanding how destination markets differed from New Zealand markets and each other, and determining the right export pricing strategy and product-related costs to remain competitive and profitable.
All these challenges have been heightened during the Covid-19 pandemic, particularly brand awareness and developing the right business connections, given there is no international travel.
NZTE’s “Made with Care” campaign aims to help lessen these barriers. Launched in October 2020, the campaign has been designed to grow awareness, preference and demand for New Zealand food and beverage products in key markets offshore, and share New Zealand’s commitment to being a trusted, sustainable global food source. It provides New Zealand food and beverage exporters access to a suite of free, ready-made marketing assets to use in their own sales and marketing efforts.
The campaign is part of a wider “Messages from NZ” country brand campaign — a New Zealand Inc effort to raise our international profile in key markets across trade, education and tourism with international consumers, buyers, and investors to help rebuild our economy.
To establish the Made with Care campaign, NZTE joined forces with Tourism New Zealand, Ministry for Primary Industries, Education New Zealand, and New Zealand Story, building on the positive sentiment felt toward New Zealand and raising the international profile of the New Zealand brand across priority markets.
NZTE’s lead for food and beverage, Craig Armstrong, says the openness of all organisations to work differently has been the key to the campaign’s success.
“We have borrowed a lot of tourism people for the last 15 months to make this work — it’s been fantastic,” he says. “It really became a partnership to say: ‘Well, how can we promote New Zealand products, as opposed to promoting New Zealand as a destination?'”.
Armstrong says businesses were telling NZTE the biggest issue for them was not being able to be in market to talk to buyers and consumers.
“What we realised was that we could use this budget to talk to shoppers and buyers at a time when New Zealand businesses could not get there and do it themselves.”
The Made with Care campaign includes paid media, social campaigns, and a suite of creative assets including templates, logos, stories, videos, and vignettes that businesses can use as part of their own marketing.
Since its launch, over 340 companies have been involved in the Made with Care campaign — by using the free marketing assets made available, or by participating in promotions managed by NZTE in Australia, China, East Asia, the United Arab Emirates, the UK and North America.
NZTE says because of the campaign, preference and appeal measures for New Zealand food and beverage are trending slightly upwards. As an example, after a short burst of promotional activity in the UK, spontaneous awareness of New Zealand as a country that produces premium quality food and beverage increased 5 per cent, with 57 per cent of research respondents stating they have either bought or are considering buying food and drink from New Zealand because of seeing the campaign.
In North America, awareness of New Zealand food and beverage increased by 10-14.5 per cent across seafood, wine, meat, and honey.
Armstrong says he has been surprised by the results and the cut through the campaign has had with consumers internationally.
“When you reflect back on it, we managed to get what can be at times a very competitive industry to work together and agree on something.”
Underpinning the Made with Care sentiment, and what distinguishes New Zealand food and beverage products from others, is the principle of Taiao — the interconnectedness of our people and the natural world.
The values of Kaitiakitanga (guardians, caring for people, place and planet, now and for future generations), Manaakitanga (caring for others and showing hospitality, kindness, generosity, support and respect) and Ingenuity (challenging the status quo with original and bold solutions) are also woven throughout the campaign messaging.
This interconnectedness of people and the natural world, and the desire for sustainable, safe and innovative products are all aspects of the megatrends that are currently shaping the industry, and Armstrong says the desire for these attributes have all been accelerated due to the pandemic.
“What Covid has done is really bring forward consumers’ changing preferences by years — whether that is five years, six years, 10 years… I’m not quite sure,” he says. “But what we are seeing now is a need or a preference from consumers that is playing into New Zealand’s hands. We are a very ethical producer of food, treat our people well, treat our animals well, and generally treat our land well.
“We have got to be able to tell that story and be able to capitalise on what most advanced and developing economies now care about.”
He says telling that story is critical, and that most of the growth from exporters is not hampered because we are not in the right markets or don’t have the right product, but rather because people don’t spend any money on marketing and telling their story.
“Look at the results we are getting through the Made with Care campaign,” he says. “Those kinds of numbers should give you an indication that if you invest in marketing and look at it as an investment, rather than a cost, you will get a return out of it.”
Insights into key purchase drivers from 14,000 international shoppers
NZTE partnered with global research and insights company Kantar to identify key purchase drivers, supported by insights into behavioural and emotive needs of the primary household shoppers in Australia, China, Singapore, Japan, United States of America and the United Kingdom.
With Kantar, NZTE conducted an online survey with household shoppers in January/February 2021 to examine what’s driving purchases within eight different F&B categories and 29 sub-categories, including meat, fruit and vegetables, dairy, seafood, alcoholic beverages, non-alcoholic beverages, sweet snacks and vitamins, minerals and supplements/mānuka honey.
“We learned that eight attributes drive consumer purchases: tasty, affordable, trusted brand, safe product, healthy, fresh, ethical and on-trend,” says NZTE’s Craig Armstrong.
“Those may sound obvious, but we must understand our consumers rather than base what we do off assumptions. Plus, there is a huge amount of depth and data behind these insights.”
Armstrong says the research found five key paths that companies could take to capture a premium: ethical, on-trend, health, safe product and trusted brand. However, he says these vary depending on the market and category, so how businesses construct and communicate their offer needs to be tailored.
“For example, China is influenced by health and safety; Japan by health, taste and freshness; Singapore contains a broader spread of drivers; while Western markets are more driven by affordability, taste and trusted brand.
“However, affordability and taste do not pull in a premium whereas there is real potential for ethical and on-trend purchases to do so, particularly in the US.”
Locking in brand sustainability
David Babich, chief executive of Babich Wines says they have seen a 4 per cent lift in website traffic over the time Made with Care has been running.
“While not double-digit growth, it is off good base traffic and in an environment where the investment (hence competitiveness) in this area has been intense due to the global constraint on face-to-face.
“As an exporter you have to make an investment in travel and visiting customers. While people understand the reasons why we can’t visit, the time that you can get away with not doing that is fundamentally finite.
“We are going to hit two years without visiting our customers, and meanwhile other competitors are either domiciled in the market or have face-to-face market access because of their own infrastructure — especially the large players.
“We have four people in the US, three in China, one in the UK, so we are not without representation in our key markets, but we don’t have an enormous team to continue to push our message relentlessly. A lot of other NZ companies are in that situation.
“Since we can’t put a billboard in Times Square, social media has worked particularly well for us to market to the world and get our brand messaging out.
“What has resonated for us in the Made with Care Campaign is that one of our brand platforms is sustainability.
“We lock right into that.”
Agribusiness Report: Plant & Food working to increase fish production
Open ocean aquaculture
Plant & Food Research, a Crown Research Institute, is working on ways to increase fish production through open ocean aquaculture.
Global demand for seafood continues to grow, but if production remains static, supply will fall massively short of demand. Managed sustainably, mobile oceanic fish farms off New Zealand’s coastline may soon provide a means to supply nutrition and sustenance to the world.
Suzy Black, Open Ocean Aquaculture Direction leader at Plant & Food Research, says the research programme is taking a unique approach by looking at the idea from the point of view of fish. “We are asking ‘what do they need to be at their best?’ This means understanding fish needs and behaviour and incorporating that into the design.
Black says the team is taking the knowledge it already has about near-shore aquaculture and making it more sustainable for the ocean.
“Our approach is a bit different from what you see overseas where ocean aquaculture systems are mostly enormous structures built to withstand harsh ocean conditions.
“We are taking a mobile approach and trying to work with the environment, rather than against it,” says Black.
The mobile prototype is still in development, and it is too early to know what it might look like. But Black says the aim is to move the systems around the ocean autonomously so fish can experience the temperatures, currents and water quality to ensure they are in the best environment year-round.
“If this takes off, there is so much opportunity for Aotearoa,” she says. “This has the potential to create a whole new sector with new technologies, new industries and regional jobs”.
The open ocean aquaculture work is being done by scientists at Plant & Food Research in collaboration with science organisations overseas and in New Zealand, including Cawthron Institute and the Universities of Auckland and Otago. The programme is funded by the Ministry of Business, Innovation and Employment and Plant & Food Research’s internal Growing Futures investment.
Extracting protein from pasture
Generations of New Zealand farmers have excelled at growing pasture for livestock. The leaves of these crops are rare examples of plant proteins with a full complement of essential amino acids — the building blocks of proteins that humans need to keep their bodies functioning.
In response to the increasing population of people looking for plant-based protein, Plant & Food Research is looking into different ways to harness the goodness of plants.
“It’s important for Aotearoa New Zealand’s economic future that the food industry develops new plant-based food options for consumers, creating a wider portfolio of products and reducing our reliance on animals for both our own diets and for export,” says Dr Jocelyn Eason, GM Science Food Innovation at Plant & Food Research.
“The challenge in being so far from our major markets is that our export products need to be of high value, compared to alternatives. We can’t produce commodity plant protein ingredients, like pea or soy protein ingredients, for export as our competitors operate at scales we cannot achieve.
“We need something extra, something we can market as uniquely Kiwi, such as ingredients from plants that offer more or capitalise on our reputation for innovative sustainably-grown foods.”
Eason says by incorporating these crops into rotational farming practices, we could create a food protein ingredient with the unique characteristics needed for the New Zealand food industry and with positive sustainability credentials.
Proteins from plants could be used as foundation ingredients in a range of different manufactured foods, such as protein-fortified beverages, nutrition bars or healthy foods for seniors. They could also be used to create new vegan-friendly meat alternatives, providing the full range of essential amino acids in one product.
A side-benefit of extracting protein from plants traditionally used in animal feed is reducing the amount of protein in the diet of stock. The by-products of the isolation process still have nutritional benefits for animals but, by removing some of the protein — the compounds responsible for the nitrogen expelled in urine — the amount of nitrogen leaching into soils and waterways is reduced, improving the impact of animal farming on the environment and enhancing New Zealand’s clean green reputation.
High value marine molecules
Cyber Physical Seafood Systems (Cyber-Marine) is a research programme led by Plant & Food Research that is looking at extracting high-value molecules from seafood during processing. The idea is to create automated multi-operation flexible factories, monitored by artificial intelligence (AI) sensor systems. These factories will analyse seafood as it enters the factory and determine the best way to process it to achieve 100 per cent utilisation and maximise the value for all harvested wild and aquaculture seafood.
By making use of all raw material, this will allow the industry to achieve growth targets without increasing catch volume from wild-capture fisheries, as well as maximise value from increasing aquaculture. It is envisioned that once established for the seafood industry, the technology could be adapted for any bio-industrial process.
In addition to its role as a food source, seafood contains a range of marine molecules with special properties. They range from big structural proteins for biomedical scaffolds, through to anti-inflammatory omega-3s, and blood pressure-lowering or anti-aging peptides.
“Many of these molecules can be found in marine by-products and by-catch, so by extracting them for new products our seafood industry can grow without affecting seafood availability or needing more fish to be caught,” says Dr Susan Marshall, leader of the Cyber-Marine programme.
“It also ensures that we can use all of the biomass grown through aquaculture, not just focus on the food portion. The challenge is how to efficiently extract everything from really diverse marine organisms that contain different types and combinations of the molecules, whilst not destroying one component to recover another.”
● Case studies supplied by NZ Plant and Food Research
Tapping into the Multinational Opportunity (Callaghan Innovation)
Originally published on Callaghan Innovation’s Healthtech Activator website
Tim McCready from BioPacific Partners spoke with healthtech multinationals about changes in the industry and why they are interested in NZ innovation
The healthtech sector is broad, and big corporations in pharma, consumer health and medtech all have slightly different attitudes toward accessing external innovation – but they all share an increased reliance on external innovation to supplement and bolster their pipeline.
Multinational corporations can bring with them strong investment, a powerful workforce, and access to global markets for local New Zealand (NZ) innovators. But regardless of whether a partnership or investment happens or not, there are always insights to be gained from them. Even a 15-minute conversation can reveal insights that might help reshape a product to be more suitable or better accepted by the market, or perhaps adapt a business model to one that had not previously been considered.
Most of these multinationals are not embedded within the Australasian region. They might have sales and marketing teams here, but there are few business development personnel. While it can be a challenge identifying and reaching relevant decision-makers within the confusing hierarchies of multinationals, there are many reasons why it can be a worthwhile activity.
Strong desire to access good innovation
“Innovation does not have a boundary. There is no border limit, wherever there is good science, we go for it,” I was told by a business development executive at a healthtech multinational. It helps that generally these companies are positive about NZ innovation – thanks to our well-regarded education and science, robust regulatory environment, and diverse population.
“If something is making headway there, there’s a whole lot of hurdles it has overcome and it makes me think I can pick it up and run with it elsewhere,” they said.
For the pharmaceutical industry, the cost of research and development for new drugs, the high risk of failure, and the significant exposure many have due to the expiry of blockbuster drug patents means they increasingly look to external innovations for their product pipelines. If the technology fits a gap in the company’s pipeline they will be interested – and are largely ambivalent about the stage of development.
But for medical technologies this is slightly different. For traditional medical devices, multinationals will often prefer to wait until a technology has regulatory approval and can demonstrate strong sales. This is because some of the most challenging aspects of bringing a device to market are the registration of the device, and the considerable work required to convince physicians and surgeons that an innovation is worth considering (and often retraining for) over existing alternatives. Multinationals prefer to see a technology that is proven to mitigate these risks.
Digital innovation
There has been a rapid shift in digital innovation in healthtech, and the development of technologies for a consumer market, including mobile phone sensors, smartwatches, fitness trackers, apps and the use of big data for diagnostics and treatment. This is causing huge concern in the medtech and consumer health industries about where future revenues will come from.
I was told by a business development executive in a medtech multinational: “I joke that I’m glad I am closer to the end of my career than the beginning because I’m not wired to think this way. My gut feel used to be pretty good, but I don’t have that for the future… I think it is incredibly naïve to think that technology and digital won’t fundamentally change the sector.”
The onset of digital giants entering the healthtech space has made traditional medtech multinationals nervous. They are hesitant to enter the consumer market since the big players – the likes of Amazon, Samsung, Apple, Google and Huawei – could quickly wipe out the market share of new technologies that begin to gain traction.
A business development director joked with me that “One day I will need a new hip. I’ll go onto Amazon, where there will be a base one, and then ones with extra features… I’ll select my hip, pick my doctor, choose a hospital – after checking their reviews – and take my basket to the checkout. Somebody is going to figure that out.”
Making the connection
Before the pandemic, these big players were reluctant to travel the 12 to 24 hours required to visit NZ and saw the significant time zone difference as a barrier. This meant that costly visits to the big conferences – the likes of the BIO Convention or The MedTech Conference – were the only places to sit down for 15 minutes with the relevant people in these companies.
But over the past year these interactions have moved online, and with it so has a growing acceptance from large corporations that new technologies can be discovered using digital platforms – no matter where in the world they might come from.
As New Zealand starts its journey to open to the rest of the world world, it was interesting to reflect on technologies being implemented globally that could play a part in NZ’s response:
🎤 The increased use of micro-influencers, particularly in the United States, to reach out to small pockets of communities that are vaccine-hesitant and allay concerns.
📌Wristbands (Singapore, South Korea, Hong Kong) and geotagged facial recognition (Western Australia) for ensuring home quarantine.
📱 Linking the Covid tracer app to vaccine status so that entry requirements can be varied based on risk and are validated when you scan into a venue (such as in Singapore, which requires double vaccination to enter restaurants, but a lesser requirement for office spaces).