The report compiled by research company, Coriolis, and commissioned by New Zealand’s government, identified “significant untapped capacity” in its food and beverage industry and suggested that it can export more.
It said that strong investments in science and innovation, as well as globally recognised levels of food safety and sustainable production, would ensure healthy growth.
New Zealand spends over half a billion dollars each year on Agri-Food research and the government has nine scientific agencies participating in research, creating a wide pool of knowledge available to industry, the research said.
Key growth segments
The processed food sector and beverages segment offer manufacturers the most growth opportunities for the export market, the report said.
Processed foods exports had experienced a CAGR (compound annual growth rate) of 12% between 1995 and 2010 and beverages 17%, yet both sectors remained small by comparison to other larger export segments such as whole milk powder, lamb and beef.
For the processed foods sector, the research suggested opportunities in exporting infant formula, due to knowledge in dried milk as well as Danone and Nestlé both manufacturing in New Zealand.
For beverages, it noted that wines represented an area with growth potential, and that Marlborough Sauvignon white wine could be expanded into different varieties. It added that the presence of big wine and beverage companies from the US, Australia, Japan and Europe could help drive growth with further investments.
Sights set on Asia
Asia is now the largest destination region for New Zealand’s exports, representing 40%, the report showed, with China the single largest importer.
According to the research, “New Zealand is in the middle of a fundamental transition from feeding Westerners to feeding the Asia Pacific region.”
The demands of this diverse region, the research said, are driving the growth of the export market and will continue to do so.
In 2010, the food and beverage sector represented 54% of New Zealand’s total export market, with its largest export, whole milk powder representing 18% pegged at US$3.1bn and its second largest export, lamb at 12% with a worth of US$1.9bn.
Currently, 25% of the country’s food and beverage manufacturing sector is foreign owned, and so, according to the research, the growth of New Zealand’s export industry will involve such investors.