SOCIAL media experts believe the agribusiness sector is lagging well behind in its management of the unprecedented changes to consumer buying patterns online campaigns are creating.
Their message is that social media can cut both ways for farmers but it can no longer be ignored.
Last month’s online callout for consumers to buy branded milk and to leave house labels on the shelf, in response to the devastation farmgate price cuts are having on dairy farmers, appears to be waking farming leaders up to the social media juggernaut.
More than 20,000 Facebook posts are believed to have been made, along with thousands of Instagram and Twitter mentions, and the result was a dramatic oversupply of generic milk, with some supermarkets slashing prices to as low as 50 cents a litre in a bid to move product.
Dairy Australia sales figures show an increase in branded milk purchases in excess of 20 per cent nationally for the latter part of the past financial year.
Industry leaders say small processors have reported increases of 30 to 40pc of branded milk sales.
Big retailers and their suppliers were caught off balance, their logistics understandably determined by historical consumption patterns, and the need for a built-in ability to react faster became evident.
Experienced social media consultants say that ability will only come with a greater understanding of the power of social media and a dedication of resources to monitoring and managing it.
Max Doyle, managing director of consultants Hello Social, said for all large, fast-moving consumer goods companies, social media now played an important role.
According to the Australian Bureau of Statistics, the number of households with access to the internet at home reached 7.7 million in 2014/15, representing 86 per cent of all households.
Social networking was the equal highest (with banking) reason for accessing the internet, accounting for 72pc of online activity.
Mr Doyle said the branded milk campaign was an example of an initiative that went viral randomly and the same thing had happened across many consumer goods industries.
“What it shows is that people have strong feelings on this issue and that unveils great marketing potential,” he said.
“The tricky part is that the chances of planning something to go viral in this way are slim.
“But clearly social media plays a role in people’s purchasing behaviour.”
Mr Doyle listed numerous other cases of how social media campaigns had led to significant changes in consumer buying patterns.
They included Choice’s listing of 19 egg brands to boycott after a government free range definition was announced earlier this year that the consumer organisation believed was misleading.
Others were consumer boycotts of Nike and Adidas products which used kangaroo leather and the popularised NestleFreeWeek hashtag in the wake of Nestle’s push for fake baby milk and perceived undermining of breastfeeding.
Agrifood consultant Dr David McKinna, from Victorian company McKinna et al, said the branded milk affair was unprecedented but it was also short-lived.
Any company seeking to use social media to influence consumer buying behaviour should not get a false sense of comfort from this event, he said.
“Yes, social media is very powerful but its effect is felt mostly amongst millennials and they are not getting a balanced view of what is going on,” he said.
“They are not consuming traditional media and they are not hearing alternative opinions.
“In that way, social media can present a danger too, particularly to the agriculture sector.”
Dr McKinna said the out-of-stock situation happened mostly in country areas, with little sign of the campaign infiltrating capital cities.
“If you did a vox pop in Martin Place you wouldn’t find many who have heard of the dairy crisis,” he said.
“The bottom line is if you’re a battler with four kids and you can saving $10 a week on non-label milk, well that is going to have the bigger impact on your buying behaviour.”
Social media, Dr McKinna said, can be nothing more than a rumour out of control.
“It can be unrepresentative, uncontrolled, petrol on flames,” he said.
“It is incredibly powerful and if you don’t manage it and understand it, you could find your business in a lot of trouble.
“It is taking too long for agribusiness to cotton onto that. Banks have been all over this for years - they have teams of people constantly monitoring social media.
“The thinking is you have to put out the fire within an hour.
“How long did it take the live cattle trade industry to react? Much, much longer and their industry closed down overnight.”
Norco leads the way
ONE agribusiness taking a progressive approach to the changing consumer dynamics presented by social media is Lismore-based dairy co-operative Norco.
The farmer-owned business, which supplies Coles’ milk labels in Queensland and Northern NSW along with having a range of its owned branded products, certainly felt the effects of the recent Facebook ‘buy branded milk’ callout.
On one Tuesday at the height of the campaign, the normal historical order of around seven semi trailer loads of packaged milk to Coles was reduced to 1.5, Norco’s chairman Greg McNamara said.
The uplift in Norco’s branded sales in the last five weeks of the financial year versus the seven weeks prior was 26 per cent and the drop in generic sales 16pc.
“Because we make more generic milk than Norco branded milk, this actually resulted in a drop in total volume of 82,000 litres a week, which is two b-double truck loads worth,” Mr McNamara said.
There was some fast reaction required on the part of the company’s milk logistics team to divert milk and find the next best profitable home for it.
As a result of the event, Coles has increased Norco’s supply footprint by another 77 stores as far north as Cairns and given Norco additional shelf space for branded products.
Mr McNamara is confident of maintaining the current Norco banded volume as the new norm.
The company has also now engaged a social media agency to ‘encourage greater consumer preference for branded products’.
