The oil and gas industry in Canada should be taking note of the potential change in fossil fuel use in the future. China has just announced its proposal to ban the production and sale of fossil fuel in the near future. The country produces and sells 28 million cars annually and is a major market for luxury vehicles. This was not lost on Jaguar Land Rover as they target 2020 to have electric versions available to fill that need. Volvo has stepped up with a commitment for electric options in China by 2019, with Ford promising electric options in China by 2025. The U.K. has targeted 2030 for implementation of electric vehicles as has France with a target date of 2040.
These are high population countries with massive fuel use and in the case of China, large production facilities. It would seem that there would be an expectation of a reduction in conventional resources such as oil and gas as the changes are implemented. With the price of oil as a basis for the strength of the Canadian dollar, this is an especially intriguing time for Canada. Currently, reports are that the industry is avoiding the inevitable even in the renewable energy space. While renewables such as wind power have an annual growth rate of 7.6 per cent with 1.6 per cent growth in gas and 0.7 per cent in oil, several companies are still trying to convince shareholders that the future is in oil and gas.
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Not believing change is happening for a reason, particularly in the public interest, is like ignoring the 2016 growth in electric car sales in Canada of 56 per cent. Hybrid and electric cars are a disruptive technology and things will change. Consider the technology of cell phones. Not very many years ago they were interesting, large, limited and used by a few. Then they became smaller with larger capacity. Along the way the key pad was switched for a touch screen. And now they have full computing capability and built-in services that are potentially life saving. Over half of Canadian homes have cancelled their land lines in favour of the cell phone, leaving traditional communications companies struggling to keep their clients.
If this all sounds familiar, it is. It was just a few years ago that electric cars were a “niche” market, something like “no hormone added” “natural” or “organic” were in the beef industry. Most certainly a luxury meat like beef was considered not to be susceptible to the change in public opinion, and much like the oil and gas industry, tended to believe that changing consumer preferences were a passing phase, and sales would go up — eventually. Arguably, many folks will have to buy protein on price point but if they have the privilege of choice or have a national policy of no hormones or GMO or some other restriction, they will buy accordingly.
And so I am concerned over the broad and sweeping statements of claim that are endemic in the beef industry against players within it for their pursuit of niche markets or execution of a brilliant marketing strategy. Internal conflict demonstrates a lack of self-confidence to the end user and alienates creative thought towards palatable solutions. When someone eats cereal, say, Cheerios, they do so out of choice. The cereal is a brand built on trust and it is familiar as even little babies can let the oat based O dissolve in their mouth. On the box you will see a claim of gluten free, an area that was once claimed to be a niche, yet is not questioned now. That claim is true and positions the product in the marketplace. It does not create internal cereal wars.
How does this differ from branding a product as “no added hormone,” “hormone free,” “local” or even “raised right?” These characteristics are there for the purpose of assuring the client of content, protocol or process and are not attached to wilfully degrade or diminish other products. We don’t take away from the baby because of the claim of gluten free nor do we question the use of a cell phone because the technology has changed with the consumer demand. Industry, any industry, be that auto, communications or food must embrace change that is driven by the buyer.
The protein industry is especially vulnerable as we head into demographic change which drives diet and purchasing power. Younger and more diverse populations have different needs and the strong middle class in our country allows them the privilege of choice. And they will choose according to their core values and beliefs — using the newest cell phone, driving an economical car, feeding their babies a cereal they trust and eating the beef they want to. Literate, informed and curious enough to take part in the discussion of food production and value, animal welfare and emerging technology in production, processing and the preparation of food, our new client may choose plant protein over animal protein or “no hormone added” over the product that lacks the label of assurance they asked for. Whatever it is — time is wasted in the lobby for the gas guzzlers and landlines of the world.
As for those electric cars, it is true that they need charging and currently are somewhat limited in distance and affected by the cold. Technology will address these issues and policy and places will change to accommodate production and plugging in. At the end of the day, everyone wins except for the principles that choose not to change in attitude, perspective and appreciation of both their stakeholders and their clients.