Think in a long term way: Q&A with Mary Shelman

Mary Shelman

She was joined on stage by globally recognised retailers and a foodservice distributor to discuss how their companies are responding to this new environment. I had a few questions for Shelman regarding the evolving dynamic between retailers and agricultural producers.

With the focus on sustainable agriculture and the development of new technologies as well new policies being implemented to this end, what innovations do leading retailers need to make to tap into this market?

Mary Shelman: I think a lot of that is around data and the ability to not just have data on what you are doing inside an operation as a retailer but all the way back across the supply chain. As supply chains are very fragmented and there are a lot of small producers, it's very difficult to get the data. But when you think about smartphone technology and even little farm technology, the systems exist now to make that possible. So to me, they should use the data to want to understand their customer base and what customers really want and what they value.

On the other side of it, is to be able to coordinate the supply chain and to understand who's your best producers, how to make that chain very efficient and how to deliver something to the market that consumers find very valuable.

A large number of informal and smaller retailers are starting to supply consumers with affordable organic produce. How are larger retailers dealing with these changes in dynamic and the extra bit of competition?

Shelman: I think it's good. One question is, is the customer base the same or is it all a growing segment that you are pushing through. From a standpoint of organics, it's very interesting that consumers clearly value them. But what is it that they are looking for and is it true organic production or is it something else?

There are often opportunities, but also challenges with organic production. It is not as high yielding in most cases, it limits the area to where you can grow something, and there might be pressures that you can take care of in a different way. So I think we should grow in a very environmentally sustainable fashion, but that doesn't necessarily mean it has to be truly organic, however, organic is defined here, and I think the challenge for the entire system, whether it's the retailers or a stall on the side of the road is to be able to provide those products that are sensibly produced in an environmentally sensitive way and at a good price point that expands access to these products.

According to a report by KPMG, South Africa is the only country in Africa with food self-sufficiency. How will decisions made by South African producers and retailers influence the rest of the continent?

Shelman: One thing we'll continue to see is that there is self-sufficiency here, but at what level? But importantly here is a very dynamic export industry and it's typically those dynamic export industries that pull the rest of the sector forward in terms of increasing capacity and that is a very important aspect from the point of economic development, job creation. To me, self-sufficiency shouldn't necessarily be a government goal. A strong and healthy agricultural and fruit sector should be the government's goal.

I do think there is excess capacity here and that means that South African can then play an important role in satisfying food demands across borders locally and globally. Also the ability to transfer technology as well as help other producers in other countries that have similar climate conditions, but aren't yet at the technological level to achieve the same yields.

What are the most pressing challenges facing the industry with regards to creating environmentally sustainable agriculture, especially in terms of seeing to the demand from an incredibly large and growing population?

Shelman: The biggest challenge right now is water. If we could release more water, productivity in many areas could improve. So technology is going to continue to play an important role in helping us to meet the challenge. I was out with Tommy van Zyl on the tomato farm ZZ2 and what they are able to do with drip irrigation, very carefully controlled to measure and they think in a long term way; and that's it, to be able to think in a long term way about farm management, about environmental management as opposed to just having to survive the season. To do that, we need a level of economic success reliability and you also need land rights, because to be able to invest for the future, you have to know that you have access to it in the future.

Consumers want more organic options when they are shopping; they want to buy safe and quality produce. What are large retail companies doing to meet the increasing demand for organic food or what should they be doing?

Shelman: Again, I think there is this perception and concern in the consumer's mind about the safety and quality of the food they are eating, so one fall-back for them is organic. So there's a growing demand and it's right that we should meet that demand, but there's also other ways to achieve this safety and quality levels, without having to go after the organic roots.

I think many retailers, in order to serve this growing demand for organics are reaching back in the supply chains and working directly with the growers, because to go organic on ground that hasn't been organic in the past means you actually have to manage that land as organic for a number of years, before you can sell organic produce off of it. So that really requires a partnership, because there needs to be that commitment there. A farmer can't start that journey, unless they are sure that the investment they are going to make over this transitional time is going to be appreciated in the longer term.