B+LNZ: US market insights
A recent McKinsey study conducted a meta-analysis covering five years of U.S. sales data, from 2017 to June 2022. The study analysed 600,000 product Stock Keeping Units (SKUs) and $400 billion in retail revenues across 44,000 brands.
The focus of the analysis was on 93 distinct environmental social and governance (ERG) related claims, including terms like "cage-free" and "eco-friendly", categorized into six classifications. The results were resounding - products making ESG-related claims experienced an average cumulative growth of 28 percent over the past five years, outperforming products without such claims, which achieved 20 percent growth. This discovery is a beacon for New Zealand farmers, signalling that embracing sustainable practices could not only align with ethical considerations but also translate into increased market share and profitability.
Hugh Good, B+LNZ's Global Market Intelligence & Research Manager says it is significant to see evidence that people will pay for products labelled as sustainable.
"For New Zealand farmers, this shows real potential for increased market share and profitability through the use of sustainable production credentials for our red meat products.
"It underlines the importance of programmes like the New Zealand Farm Assurance Programme (NZFAP) and New Zealand Farm Assurance Programme Plus (NZFAP Plus), which will allow us to produce to a higher sustainability standard, and allow us to capture value in the market".
"What is also interesting is that less-common claims tended to be associated with larger effects", says Good.
The study found products labelled as "vegan" or "carbon zero" demonstrated an 8.5% advantage over their counterparts without. In contrast, products with more common claims such as "sustainable packaging" or "plant-based," showed a 4.7% advantage.
Beef + Lamb New Zealand's (B+LNZ) Market Development team monitors global consumer markets, analysing data to see how the New Zealand red meat industry might take advantage of trends. The team shares its findings through the B+LNZ quarterly Pulse report.
TikTok is Gen Z’s advertising of choice platform
B+LNZ’s market insights show TikTok has emerged as the advertising channel of choice for Generation Z, ahead of Instagram and YouTube.
In a November 2022 survey of 1,000 US TikTok users, Gen Z respondents said they trusted influencers on TikTok most, compared with those on other platforms.
The platform's short-form videos have captured the attention of young consumers, presenting an avenue for New Zealand farmers to connect with the next generation.
The growth of 'livestreaming'
Other insights from the latest report include the rise of 'livestreaming' in the U.S. market. As consumers increasingly seek authentic connections with the origin of their products, livestreaming provides a platform for sellers and producers to showcase their practices, tell their stories, and engage with a wider audience.
The market is projected to reach $31.7 billion by the end of the year, nearly tripling its size from 2021, and is anticipated to grow to $67.8 billion by 2026.
Good says, "This presents an opportunity for New Zealand farmers to leverage technology to bridge the gap between their farms and the American consumer. We have such a great story to tell, but we need to develop the capabilities and embed the technologies to make this possible".
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