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I think at the core of what I was asked about how
do we remain competitive, is this question of the customer.
It's this question of well,
is there a bit of a unique secret about an
international customer as compared to a customer in
the Australian marketplace?
Look I've thought long and hard about this,
especially given that one of my board members is
sitting in the audience because I thought I could
tell you that there's a secret.
'Cause that might cause me to be able to ask for a
bit more money at the next salary review but he would
know and we all should know that there is not.
And that I think that sometimes this is overblown.
Every person in this room is a customer.
And every person in this room looks for the same
things when they turn up at their local supermarket.
Now whether you're a customer that's going to a
supermarket to do a little bit of retail shopping,
buy the groceries, or whether you're a customer
because you're a business-to-business
customer, in other words we're selling to you for
you to do something more with it,
the rules actually don't change that much.
And this is why I always go well let's not get too
complicated about what the rules of business are.
So in terms of the customer,
well what do they want?
Well the first thing they want to do,
they put it on the shopping list and when the
turn up they want to make sure the product's there
so they want reliability of supply.
So we can tick the box and say I think Australia is
very good at reliability of supply in terms of agriculture.
And then you know when you buy a block of Bega
Cheese, you're actually taking it as read that it
will taste pretty much the same as the last block you bought.
So they want consistency of supply as well.
And then you move down and you say well you would
assume that if you've got reliability and
consistency that quality is, of course, taken for granted.
But it is important to make sure that that
quality aspect is always there.
You want it to be fit for purpose.
If we said it would melt on the top of a pizza you
want it to melt.
If we said that we're delivering an infant
formula base to be further valuated before it goes
into a retail market, you expect it to be able to be
managed in the way it wants so fit for purpose
is extraordinarily important.
But then we start to move into some of the more
ethereal things if you like.
You know a customer no matter where they are will
ultimately become concerned about your
behaviour, where you are sourcing your raw material.
Indeed how you're managing that supply chain and how
you're delivering it and they will start to ask
those questions which we must be ready to answer.
On top of that, increasingly there are,
there is the growing story of providence.
We can talk about it in many different ways but
the reality is if we just go straight in a very
simple way and talk about the fact that people want
to feel good about that purchase,
so when they're buying Bega Cheese somewhere they're
reflecting on the ad that the Bega farmers did talking
about their love of the company and the product
and the pride in their properties and whatever else.
And the providence theme starts to play.
And that providence issue goes well beyond the
consumer It goes right through the supply chain.
But interestingly we are all human beings and
regardless of whether we're a direct consumer,
business-to-business consumer we will become
bored and we will expect innovation.
We'll expect you to put it in a newer packet or do it
in a different way or deliver a different
product and find a way to value-add.
And if that's not coming, if that's not forthcoming
we'll expect the next thing which is we want it cheaper.
So it won't cost out.
We'll want the supply chain to have become more effective.
So the funny thing is that when you run through that
list it's not a very hard list to come up with.
Any one of you if you sat down for a moment and
thought about it, you would say,
yeah okay that's sort of what I want.
Well, I don't think the assumption should ever be
made that a customer anywhere in the world is
different to the customer sitting across the table
from you.
They are the same.
You need to be culturally aware,
you need to be designing your product to meet their
needs but in the end they are the customer.
And they get to ask whatever questions
they like and you get to try and deliver to their
expectation and requirement.
If there is no innovation, if there is no
improvement, if there is no research and
development you won't get there.
You won't get there.
You might hold them for a while and leave.
So the reality is, long-term customers expect you
to be thinking about them continually.
If I was to make, if I was to pick a customer in
Australia for example and was to talk about Coles,
Coles expect us to be thinking about the supply
chain all the time.
They don't expect to come in and not see us
investing in faster and faster machines,
greater and greater innovations.
So it's not only about innovation in terms of the
delivered product, it is how that product is delivered.
So ladies and gentlemen, I guess in this context we'd
think about well how does Australian agriculture
take its position in the world?
And indeed what is the challenge for the leaders?
And it's interesting I did say to my PA,
so how does Dr. Evil get on the slide as a global leader?
And did ask the same question about,
she thought long and hard about where she positioned
the pictures on the slide and she did position me
away from Dr. Evil, although at the time she
was just going to position me right beside him.
But the reality is that it doesn't matter who the
leader is.
Dr. Evil needed some of the same things that we need.
I've got our esteemed political leaders up there
because quite frankly there's been a number of
comments made lately about the state of the Labour
Party and the state of the politics in general,
politics in general.
The funny thing is about leaders when you come down
to it, we'll maybe come back to the top one
because that is perhaps more political than the rest.
But if you're a leader, if you're a leader of any
salt, if you're a leader of any substance that's talking
about taking a business forward,
achieving something a little different,
what are you really thinking about?
Well the first thing you should be thinking about
is what infrastructure do I need short and long term
to meet the objectives of this business?
And whether that infrastructure is the
infrastructure that Bega Cheese requires or indeed
the infrastructure the nation requires to deliver
product to the world we better be thinking about
it and I don't think we are from a national point of view.
In terms of research and development we would also,
any good leader worth its salt will make sure that
his business is focussed on research and development,
investment of the future to make sure that business
can differentiate itself in the marketplace,
whichever marketplace it might be worked,
might be related to.
We would say that the working environment is
extraordinarily important and what do we really need
in that working environment?
Well we need people that are flexible.
We need them to be motivated and we need them
to be able to respond to changing conditions
according to what might be happening at the customer end.
So that's the marketplace.
That's the environment that I would look to be
creating for my staff.
And it would be the environment that I would
hope my leaders would be looking to create in the country.
And of course we'd be making some in-market investment.
We'd be making sure that we are indeed investing in
the future establishing reputational things that
are important, making sure that our customers
understand that we want to be there and we'll be
there for the long term and of course we'd be
staying the course.
Barrack Obama made a comment when he was being
asked about the origins--or when he was being asked to
present his birth certificate.
Because the nutty Right, we're trying to say that
he wasn't an American citizen and he said we
haven't got time for this silliness.
It was said again interestingly enough over
the last few months while we've had the Labour Party
wrangles around leadership and the wrangles around
any number of other things where we see a distracted
government that is not focussing on the things
that any other leader would be expected to
absolutely focus on.
If you're a leader in corporate Australia,
you would be asked to move to one side because you're
allowing yourself to be distracted.
For me, these are the things that we should be
thinking about.
The top one around trade is of course about
multilateral and bilateral trade agreements that see
that customer being able to be serviced more easily
or indeed not a disadvantage in a
competitive sense.
But there is always an opportunity, I guess, to
talk about what I think about and what I focus on,
I guess, as I thought about it in this environment and
given the political atmosphere that we've
lived in in recent times.
I thought actually you know what?
The leadership rules are not too different to the
business rules.
They actually stay pretty much the same,
but you need people to be actually focussed and
thinking about them.
Ladies and gentlemen, you'll be pleased to know
this is my last slide.
I opened by saying we are in a very interesting
period of time in that I think there is great
opportunity for the Australian dairy industry
to take a particular position in the global markets.
It will be it will be by necessity a position that
requires some level of premium.
Which is a little sobering because it wasn't
Australia's traditional position.
There is a lot of talk about food security
globally now as we look at population growth.
And there's a lot of talk on occasions about whether
Australia can actually add or indeed produce more
food to assist with global food security.
The truth is we all know that answer.
We know the answer is yes of course it can.
The question that is going to be asked more often I
think as we move forward is not whether the
demand's out there, not whether Australia can
produce enough product, it will be whether the world
can afford our food.
And I think it's one that isn't actually asked often
enough as we try and think about how we build a
sustainable and growing agricultural industry in
this country.
There is one thing that we've learned over the
last couple of years.
It's been wonderful to see the last five years,
it's been wonderful to see those demand curves going
up and it's been wonderful to say we don't have a
problem finding a customer.
And in reality it was great to see pricing
before global financial crisis just following
through and pushing down on to farm and everybody
enjoying the fruits of that.
But of course we learned a big lesson in the global
financial crisis and that was that something
completely external and unrelated to what we were
doing could absolutely destroy the returns in our
business and that's what it did.
It was wonderful then to see it recover so quickly
that you go well maybe we're going to return to
pre-global financial crisis days.
And of course as I said in pricing we have but
mining, two-speed economies have not seen
that premium flow through.
I've got a rather confronting slide up there.
The reason why I think there is some,
there's great opportunity but there is some doubt
about how that opportunity might manifest itself and
indeed how industries might play a role in it as
opposed to companies, is that there is great
uncertainty out there.
So while there is no question that as
population growth grows and as GDP improves you'll
see domestic--you'll see demand improve.
But that population growth curve will also see that
other statistic about how many people out there are
dying of hunger go up as well.
Why is that important for this forum?
It is the problem of every nation;
it is the problem of every industry that in the event
of global stability, sorry in the event of global
instability, you will get extraordinary fluctuations
in returns.
I have a fundamental belief that the returns
for food products will continue to improve and grow.
There will be hiccups and I accept that and that's evident.
But the reality will be that those hiccups will be
caused by external factors,
those hiccups will be what caused by social unrest
and political unrest as much as by economic
upheaval and it's something that whilst not
stopping any strategy that we have in business,
it's something that we should always be aware of.
Ladies and gentleman, I hope you found that interesting.
I'm pleased I've got a new watch and I'll be happy to
take any questions.
Thank you.