Global food producers can leverage the country’s reputation for its exceptionally high standards in food quality and freshness, as well as New Zealand’s highly skilled workforce, stable democracy with strong economic freedoms, top investor protection, low corruption, favourable business environment, access to commodities, and relatively low costs.
New Zealand’s skilled pool of labour, its research and development, excellent transport and distribution links to international markets, and agricultural products create opportunities to meet further export-led demand. A number of planned irrigation projects will improve land productivity and unlock further investment opportunities for global food processors.
There are opportunities for global food producers based in New Zealand to access fast-growing markets through free trade agreements with China, as well as traditional markets in Europe and North America.
Global leaders have already endorsed New Zealand by investing in manufacturing in the country – 25 percent of the food and beverage manufacturing sector is foreign owned. New Zealand currently has investments in place from more than 60 global food and beverage multinationals.
Financial and commercial advantages
New Zealand ranks as a consistently competitive location, particularly in the meat, dairy and produce categories. It actively promotes sustainable business practices, which, in turn, create efficiencies and lower costs for manufacturers. In addition, New Zealand is a world leader in meat and dairy exports. This position allows for lower material costs.
Quality and safety
New Zealand is a leader in food safety and product traceability, underpinned by strong biosecurity measures. Consumers around the world trust food and beverage products produced in New Zealand. The World Organisation for Animal Health also recognises New Zealand as being free of animal diseases.
Efficient supply chain management
New Zealand’s efficiencies lie in the supply chain. While most countries are struggling with disaggregated supply chains in their food and beverage sector, New Zealand has worked to ensure the supply chain is efficient and highly competitive, and is enjoying the associated benefits. For example, there is significant scope for the development of value-adding meat processing facilities, and the high degree of competition among local meat companies would make this economically viable.
New Zealand’s large talent pool forms the basis of the sector here. There is a long history of food processing in this country, and it is the birthplace of many successful companies and brands. New Zealand spends more than half a billion dollars a year on agri-food research across a wide range of areas, from fruit genetics to nutraceuticals. The country is also home to four major universities respected globally for their agri-food research. The combination of strong research, good business sense, a highly skilled workforce, a reputation for safety, and an innovative edge, makes New Zealand an ideal location for food and beverage operations.
By 2050, global agricultural production is required to increase by 70 percent to feed a population that will grow from seven to nine billion. Added to this is the growth of middle classes around the world looking to increase the amount of animal-based protein in their diet. New Zealand is well placed to help meet that global demand.
New Zealand is a world leader in the following categories: milk powder, butter, cheese, other dairy products, lamb, beef, apples, kiwifruit, wine, honey, rock lobster, infant formula and dairy-based processed foods.
Some of New Zealand’s emerging products include salmon, spirits, biscuits, pet food, cherries, chocolate and sugar confectionary, frozen french fries, beer, cider, avocados, berries, jams and jellies, capsicum, peas, soups and broths, onions, prepared fish, beef jerky and avocado.
New Zealand food and beverage is most famous for its dairy sector. The taste of milk products from grass-fed animals with space to roam gives New Zealand dairy a full-flavoured, natural quality that sets it apart. New Zealand is the world’s top dairy exporter, accounting for one-third of international dairy trade. There are now more than 100 categories on offer, from gourmet ice-cream to innovations such as spray-dried milk proteins and infant formula produced from goat milk. The demand for New Zealand whey milk protein and other milk commodities is expected to exceed supply capabilities for the foreseeable future.
Returns on investment in the dairy sector are greater than New Zealand Government bonds or publicly listed shares. The industry’s key strengths include its efficient all-grass farming system, large-scale processing, significant investment in research and development, high standards for food safety and animal welfare, 130 years’ experience in dairy exports and a leading position in the global dairy industry, and creative marketing.
Investment opportunities in the dairy sector include:
- Value-added dairy products, including infant formula and other dairy nutritionals (e.g. nutritional shakes);
- Export-oriented niche dairy products that ‘fly under the radar’ such as shredded cheese, single serve butter and premium specialty cheese; and
- Dairy-based processed foods and beverage, such as chocolate, frozen bakery and dairy-derived nutraceuticals.
While beef and lamb are New Zealand’s most popular meat products, the country is also highly regarded for its veal, goat, poultry and venison. New Zealand has an almost exclusively free-range grass-fed production system, producing a tender, appetising and healthy product that is customised for clients around the world. The livestock’s diet of fresh pasture, grass and nutrient-rich clover almost completely eliminates grain feeding and nutritional supplementation.
The industry enjoys a unique combination of competitive advantages: knowledge gained from an extensive farming history , a natural environment favourable to pastoral agriculture, low cost grass fed beef and sheep production systems, high standards of food safety and animal welfare, a strong position in the global lamb trade with a counter-seasonal window to the Northern Hemisphere, preferential access to Europe for some products for historical reasons, world-leading research and development and support infrastructure, and stringent biosecurity standards.
New Zealand has a burgeoning health-ingredients, functional foods and nutraceuticals industry, based on its expertise as a major producer of healthy, high quality food. World-class science, unique raw materials, excellence in food research, biodiversity, a pristine growing environment, safety, and traceability all make this an exciting sector for future investment.
New Zealand also offers investors potential opportunities in functional foods such as low-fat milk that is high in calcium and protein, as well as biomedical and biohealth products.
Over the past 15 years, the wine industry has experienced significant growth in production volumes and exports. It now plays an important role in New Zealand’s growing economy. During these years, the industry has attracted considerable foreign investment from a number of global beverage companies. They contribute to an estimated industry turnover of more than $2 billion per annum, with $1.3 billion of this coming from export earnings.
New Zealand consistently produces award-winning, premium wines. New Zealand producers have invested heavily in technology and innovation in viticulture. As a result, the quality, popularity and international reputation of its wine is consistently high. Sauvignon Blanc accounts for the majority of New Zealand’s wine exports. Pinot Noir has also grown in reputation and value, and is now its second largest varietal by export volume. Chardonnay, Syrah and Cabernet Sauvignon all remain important signature varietals for particular regions.
The main export markets of Australia, Europe and the United States are expected to grow. However, markets in Asia, where New Zealand enjoys favourable trade relationships, are projected to increase as new consumers enter the market. Investors in New Zealand wines can tap into this growing consumer base.