By Melinda Collins
Is a pinch of talent, a dash of government funding and a dollop of Kiwi ingenuity the recipe to improve New Zealand’s innovation performance? Seems it is.
New Zealand has been failing abysmally in the innovation stakes during the past decade. But for our food and beverage companies, it has not been for lack of trying, Canterbury Development Corporation (CDC) sector manager agri-business Blair Cottam says.
“CDC has been working closely with companies in the food industry within Canterbury to understand how they can grow more rapidly. Many of these companies identified access to equipment and expertise for new product development as a major constraint.”
Now with the Government stumping up as much as $21 million to establish a food innovation network across the country, small and medium sized companies will have access to state of the art research and development facilities.
Food Innovation Network New Zealand (FINNZ) will be a collaboration between national and local government, industry, research and education providers with four regional hubs in Manukau, Waikato, Palmerston North and Canterbury.
New Zealand’s export base is reliant on our food and beverage industries, Economic Development Minister Gerry Brownlee says, and by providing the infrastructure these firms need to add value to their products, it will allow the industries to develop more rapidly and improve our economy.
“The absense of open-access facilities in New Zealand to enable product development and testing is a significant gap in our food and beverage industry and a constraint to growth. Such facilities exist in most OECD countries.
“The food and beverage sector is responsible for over half of New Zealand’s export earnings. Directly or indirectly, the sector employs one in five of the working population. Given its importance, maintaining and improving the performance of this sector is essential to achieving the government’s economic growth agenda.”
New Zealand’s exports of processed foods have experienced strong compound annual growth of 18 percent in the last decade and now account for $2.1 billion of exports. This has the potential to at least double in the next few years with the assistance of initiatives such as the FINNZ, Browlee says.
New Zealand Food and Grocery Council (FGC), chief executive Katherine Rich says the network will be a significant resource for the industry and encourage more product development to be done in New Zealand. “New product development is the lifeblood of all food companies, but many New Zealand food companies are not of a size to warrant an in-house product development resource. These open-access facilities will shorten the time it takes to get products to market and reduce the risk and cost to small and medium sized food companies.
“FGC gives its wholehearted support of these centres and encourages all food companies to see them as a valuable industry resource.”
Cottam agrees the regional food hub will be a significant asset to Canterbury. “The infrastructure that FINNZ will put in place represents a concerted national effort to raise the value of food products manufactured by New Zealand companies. A regional hub in Canterbury will provide local companies with easy access to this infrastructure as well as enabling them to tap into the resources of the other hubs nationwide. This initiative is very much what we’ve been working towards — it’s a great outcome for the city.”
Bumpy road to recovery
While the improving global economy is expected to have a positive impact on most agricultural sectors, primary producers will need to manage their operations in a potentially volatile marketplace, according to Rabobank’s group executive country banking, Neil Dobbin.
While the global economy is in recovery, it is expected to be a bumpy road, which will bring with it a period of commodity price volatility. “Leading producers understand, more than most, that they need to implement strategies to drive their business forward in this complex and competitive environment,” Dobbin says.
“Going forward, this commodity price volatility is expected to lead to opportunities and challenges for agriculture in New Zealand and Australia. When it comes to taking advantage of these opportunities, it is important that producers are up-to-date with all the current practices, whether it be for markets, finances, business strategy or human resources,”
Wairarapa export leader
Wine exports from the Wairarapa have out-performed the rest of New Zealand in the past three years.
Announcing the results, Wines From Martinborough general manager Kaylene Moore cited New Zealand’s smallest wine producing region as proportionately its most successful exporter. “The region has achieved significantly better results in growing export earnings, maintaining export prices in the face of big production rises and finding new markets over the past three years compared to national averages.”
Wines from the region are positioned strongly at the top end of the market and successfully command premium prices. Nearly 60 percent of Wairarapa’s 43 wineries are involved in exporting. “Efforts to diversify into new markets have been particularly successful; from a 2005 benchmark of nine export markets, local wineries now supply 29 markets.” The top two markets are Australia and the UK.