Ready to grow

Food, beverage sector holds untapped capacity

Food and beverage accounts for just under half New Zealand’s exports, but the country has significant untapped capacity to export more, according to a Governmentcommissioned report.

The report, carried out by Australasian consultancy Coriolis and funded by the Ministry of Business, Innovation and Employment and the Ministry of Trade and Enterprise, said New Zealand was still discovering its comparative advantages in the food and beverage sector, which contributed $30.7 billion in exports — 46 per cent of the total — over 2014.

The report — titled The Investor’s Guide to the New Zealand Food and Beverage Industry — said New Zealand is a country the size of Italy with the population of Singapore.

“However, Italy feeds a domestic population of 60 million people and exports twice as much food and beverage as New Zealand,” it said.

The Government has set a target of tripling the country’s food and beverage exports over the next 15 years.

The report said the strategy was aimed at attracting high value foreign investment in areas of competitive advantage, delivering potential direct economic impact of $5 billion over three years.

In the past 20 years New Zealand wine, honey, aquaculture and avocados have all emerged from almost nothing to become world leading sectors.

The report said New Zealand had attracted investment in food and beverage manufacturing from around the world, to the point where about 25 per cent of the sector was foreign owned.

The country’s export performance was strong and improving relative to its peers, the report said.

“The country has demonstrated capability in the production of temperate-climate food and beverages,” it said.

“It is the largest exporter in the world of dairy products and lamb, and a major exporter of beef, kiwifruit, apples and seafood.”

The Top 100 food and beverage firms in New Zealand had a combined revenue of $51.5 billion in 2014.

“Industry-wide investment has driven scale, efficiencies and the continued development of high value categories,” it said.

“While New Zealand is a major global food and beverage exporter, the country has significant untapped capacity to export more.”

The report said New Zealand was already achieving long-term growth across all emerging categories.

Aside from the main categories, honey exports had enjoyed a compound annual growth rate, from 2004 to 2014, of 24 per cent to reach $168 million.

Over the same period, infant formula had achieved growth of 45 per cent to $297 million over the same period.

Fresh berry exports had risen by 17 per cent to $19 million, beef jerky by 14 per cent to $101 million, cider by 50 per cent to $14 million and sauces by 34 per cent to $16 million.