The food and beverage industry has welcomed a government research project that fleshes out how exports could be boosted by nearly $5 billion annually.
The latest report, described as an Investor’s Guide to Emerging Growth Opportunities, is the latest in series prepared by Coriolis Research for the Ministry of Business, Innovation and Employment. It highlights emerging growth opportunities and identifies the sector’s best-performing companies as export focused in niche areas.
Speaking at the Food and Grocery Council conference in Melbourne, Coriolis managing director Tim Morris said the export-focused companies, which made up about half of the industry, were performing well above the 8% annual growth needed to double export income by 2025.
FGC chief executive Katherine Rich said it was the first time information about the industry had been collected in such an easy-to-reference format.
“It’s important that this additional investment is attracted so New Zealand can take advantage of the significant growth opportunities presenting themselves, particularly in Asia as the middle class there grows,” she said.
“It’s perhaps not surprising that the sectors identified by the report as showing the greatest potential to grab these opportunities are ones where New Zealand could have a competitive advantage: salmon, honey, spirits, biscuits, pet food, cherries and infant formula.”
Other areas were identified, too, as having high growth potential: chocolate, frozen french fries, beer, alcoholic cider, avocados, berries, jams and jellies, capsicum, peas (frozen and dried), sugar confectionery, soups and broths, fresh onions, prepared fish and beef jerky.
“As the report identifies, our exports of these top categories in 2010 were greater than the wine industry ($1.03 billion as against $951 million), and most of them are growing faster than all other food and beverage exports,” Mrs Rich says.
“These categories of processed goods are already having an impact. But what is most exciting is that Coriolis predicts that if they all achieved their potential we would be looking at exports worth between $4.3 billion and $6.1 billion – approximately $4.9 billion additional.”
The report excludes the major export companies and categories, such as dairy, meat, seafood, pipfruit, kiwifruit and wine, and instead focuses on the $US2-100 million turnover companies.
An initial screening process identified 25 high potential categories, ranging from honey, salmon and chicken through to a large range of horticultural produce, processed food and alcoholic beverages.
Those with the highest possibility of achieving growth rates similar to the wine industry – which went from near zero in exports in the early 1990s to $US800 million by 2010 – are salmon and spirits, which could earn more than $US300 million in exports by 2025, honey ($US100-200 million) and cherries (under $US100 million).
The Coriolis analysis then ranks a top 20 into three categories of good, better and best. The latter added biscuits and pet food to the top three performers.
Salmon, honey and spirits were selected for in-depth analysis because they scored consistently highly across all the research criteria. They had shown strong and consistent export growth over time, attracted a premium for quality, and were able to leverage off New Zealand's image.
Coriolis estimated the export potential of honey products at $US150-200 million, the potential of spirits at $US300 million and salmon at $US500-700 million.
Overseas investment features in most of the top 20 sectors, the main exception being honey, where Cerebos’ takeover was rejected by Comvita shareholders.
Areas where overseas companies feature include spirits, beer, cider, biscuits, pet food, chocolate, french fries, frozen and processed produce, and beef jerky. The biggest salmon company is half-owned by Malaysian interests.
But in his conference presentation, Mr Morris said his research identified some 200 multinational food and beverage companies that had not yet invested in New Zealand.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Veritas share price plunges after result
- Airways signs big US air traffic deal after reporting record year
- Sir Bob Jones' company buys landmark Wellington building
- Property developer David Henderson claims judicial bias in appeal over tax convictions
- Manufacturing in China: the key lesson from Kiwi startup’s flame-out, US startup’s success
Most listened to
- Airways's Ed Sims says the growth in air traffic management will be hard to sustain
- In Editor's Insight, Nevil Gibson watches Auckland's four "true blue" mayoral candidates step out in Takapuna
- Cameron Officer on Singapore’s driver-less taxi in Car Torque
- In Editor's Insight, Nevil Gibson looks at Phil Goff, who at a forum in Takapuna spoke of the need to reduce population
- Meridian CEO Mark Binns on the Tiwai smelter and generation options