The AERU Value Chain Compass

Background

The AERU was founded in 1962 by the New Zealand Cabinet as part of New Zealand’s response to the United Kingdom moving towards Europe. Lincoln College agreed to host the Unit under its first Director, Professor Bryan Philpott. The AERU continues to do its work at Lincoln University.

In 2006, Distinguished Professor Caroline Saunders led research in the AERU on the Food Miles Debate. This found that key food products grown in New Zealand and exported to the United Kingdom were less damaging to the environment than the same products sourced locally for the UK market.

Based on that insight, Professor Saunders initiated a pilot research project on how consumers in China, India and the United Kingdom valued agri-food products with strong credentials for ‘credence attributes’ such as animal welfare, environmental stewardship, social responsibility and cultural authenticity. That pilot confirmed the existence of market segments willing to pay premiums for food and fibre products with these qualities.

This led to a decade of public science research programmes led by the AERU between 2013 and 2022. These programmes focused on two important research questions:

• How can New Zealand enterprises, including iwi and hapū exporters, identify key international market segments that value credence attributes associated with New Zealand food and fibre products?

• How can New Zealand enterprises, including iwi and hapū exporters, construct value chains that create greater value for their final consumers and capture some of that value for local producers.

The research team implemented surveys of consumers of different products in different countries, and worked with ten case studies of existing or emerging value chains, to answer these questions. A researcher in the programme, Dr Tiffany McIntyre, completed her PhD thesis in 2021 on The governance of value creation and capture in agribusiness value chains.

In 2022, the research team created the Value Chain Compass as a tool for communicating important lessons learned from the research programmes.