Investment in oat factory leads to calls for more local processing
Processing more homegrown products at local facilities would benefit farmers, consumers and the environment, say food industry experts.
The reaction came after a $6 million government investment in a Southland oat milk factory that will help New Zealand Functional Foods produce up to 80 million litres of plant-based milk a year.
Industry representatives said such facilities should have been built years ago. Currently, locally grown oats were exported to Europe to be turned into oat milk then sent back to New Zealand.
New Zealand Functional Foods chief executive Roger Carruthers said the company hoped to convert a large proportion of Australian oat milk to local product. He expected the Southland factory to create 50 jobs when it reached full production after next year. The factory would cost about $60m, Carruthers said.
Significant freight costs would be removed by not transporting oats from Dunedin to processing facilities in Europe, and back to
New Zealand again, Carruthers said.
Foodbowl chief executive Grant Verry said the carbon footprint of goods was reduced when homegrown products were processed locally, as the supply chain was shortened.
Foodbowl was a food and beverage processing facility that enabled businesses to process and commercialise new products and test viability in the market.
There were significant climate benefits to processing locally, Verry said.
The lack of local processing facilities also meant New Zealand products created a lot of value for offshore economies.
Growers could benefit from better prices, which created food security as growers then reinvested in their farms. It also meant locally processed products became more affordable, Verry said. If more businesses could process locally, it would boost export revenue, GDP and the standard of living.
At present, some growers were not able to justify their expenditure to grow food when they weighed up costs against returns, Verry said.
Potatoes NZ chief executive Chris Claridge said horticulture and vegetable production was sold with no value added to it.
The value of produce exported as whole products had not increased substantially over the decades, Claridge said.
Frozen french fries were a good example of how processing could add value to growers and the economy, he said.
Processed frozen fries could be sold by factories for almost 60% more than what it cost at the farm gate. The price to consumers after that was even higher, Claridge said. However, New Zealand had no large factories to process potatoes into french fries on a scale that could compete with the global market.
When exporting fresh produce, timing was critical. Growers couldn’t choose when they entered a market as the product could not be stored, he said. In contrast, frozen or processed products could be stored long term, giving customers the opportunity to buy their preferred brands throughout the year.
Brothers Green co-founder Brad Lake, who sold hemp food products, said exporting goods to other countries for processing and re-importing the finished product was ‘‘country washing’’.
This was similar to greenwashing, where a product was said to be sustainable, but further investigation proved it was not.
Customers wanted to know where their food came from and such practices should be declared on the packaging, Lake said.
Brothers Green had paid a research facility more than $70,000 to process goods to see if it was viable in the market.
Once they verified its viability, they were told there was no local facility that could process their goods on a commercial scale, Lake said.
Companies needed sales to justify investing in processing infrastructure, but they could not achieve sales without processing facilities. Brothers Green had hemp seeds milled locally.
Lake said investment in facilities that could process commercial products for multiple smaller companies was needed. He hoped the Southland facility could fill this gap.