The figures were revealed following a study conducted by the country’s business and export development agency, New Zealand Trade and Enterprise (NZTE) that surveyed the country’s natural products companies.
Michelle Palmer, executive director of industry organisation Natural Products New Zealand, told FoodNavigator-Asia that this is a significant benchmark for the sector.
“This figure puts the New Zealand natural products industry on a par with the country’s wine industry which has been a large industry by New Zealand standards for some years already,” Palmer said.
She added that the natural products sector is now larger than the country’s wool industry which is pegged at $500m and larger than the biotechnology and organics industries combined.
This study not only highlights the growth of the sector, Palmer said, but also the potential for future development.
Research on New Zealand’s nutraceuticals and foods for health sector, compiled by consultancy firm Coriolis, noted that Natural Products New Zealand has articulated a growth target of $5 billion by 2025. It predicted that an 11% year on year growth will be required to reach this target.
Lively beginnings and export opportunities
Currently 71% of revenue within the sector comes from exports, with health supplements the main focus and functional ingredients and foods following. Findings showed however that the biggest revenues for the export market are generated from functional ingredients.
There are clear opportunities for growth in the export market, Palmer said, but companies need to keep up with international regulations to ensure successful development.
They need to invest in further research and specifically focus on the science to support health claims, she added.
The NZTE identified both overseas regulatory systems and access to distribution channels as the current biggest challenges facing New Zealand businesses.
The Coriolis research suggested that industry collaboration and consolidation is required within New Zealand’s natural products industry as it is a highly fragmented industry with small and under-resourced companies.
It noted that a wide range of points in the supply chain that could benefit from increased economies of scale and that industry and science must align to become innovative.
Coriolis suggested that investors should focus on proven products achieving traction in export markets, such as Manuka honey, green-lipped mussel extracts and dairy-related or derived nutraceuticals.
Palmer said that the sector is currently “young and dynamic” and predominantly made up of small to medium sized companies.
The NZTE study showed that more than half of the sector’s companies are less than 12 years old, employing 10 or less people with average revenues of $1m or more, with only around 13 companies employing over 50 people pulling in revenues over $25m.