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OPINIONKaiMay 25, 2020

Never let a good crisis go to waste: How our food sector can save NZ’s economy

Photo: Getty Images
Photo: Getty Images

The world will always need food, and New Zealand is enviably positioned to capitalise on this, writes future foods expert Rosie Bosworth – but we need to take a few big steps first. 

It’s a bittersweet moment for New Zealand. As a nation we’ve collectively worked hard to successfully flatten the curve (for now). But for many Kiwi businesses and industries, the economic aftermath of Covid-19 has not been pretty. As with many countries, there have been winners and losers. With some of New Zealand’s top export-earning industries – like international tourism and education, which contribute $16.2 and $5.1 billion respectively to our GDP – having been effectively decommissioned in the wake of Covid, New Zealand must now focus on its other economic heavyweights to help even up the balance sheets.

Now more than ever, our thriving agriculture and food and beverage sectors will be key economic lifelines for the country and crucial points of job creation for hundreds, if not thousands, of Covid-displaced New Zealanders hungry for work. Why? Because the world will always need food. Natural, honest, trusted products that New Zealand is enviably positioned to produce better than any other nation on the planet. Especially in a Covid world, where consumers globally are increasingly seeking immune-boosting, healthy and sustainable products. 

As a net exporter of food for more than 40 million people, generating nearly $48 billion in exports, New Zealand’s primary sector is responsible for producing some of the world’s finest dairy, meat, wine, wool, seafood, honey, fruit, vegetables and craft beverages. As consumers around the world gravitate towards buying local, the sector could have a lot to lose. Fortunately, the cards are stacked in our favour. Our small island nation has been dubbed “a coronavirus safe havenby international research organisation Deep Knowledge Group, which ranked it one of the three safest countries in the world. New Zealand’s strict lockdown procedures and rapid response to the virus, coupled with our existing strong track record of producing high-quality food and beverages the world trusts, will serve as the additional drawcard we need to lure more consumers globally towards our premium foods and natural products. 

A regenerative experiment on a Northland dairy farm (Photo: Supplied)

The UN last month warned of threatened global food supply, spurred by the closure of more than 22 meatpacking plants across the US due to crowded and unsanitary factory conditions and thousands of meatpackers contracting the coronavirus. North America’s meat shortages have seen fast food chains like Wendy’s taking burgers off the menu at some of their restaurants. Thankfully, New Zealand’s agricultural industry is well positioned to fill this void and the numbers suggest the world is safe in the hands of our agricultural and food products. According to Statistics New Zealand, the monthly value of New Zealand’s red meat and co-product exports topped $1 billion for the first time in March – an increase of 12% on March 2019, even with Covid taken into consideration. Sirma Karapeeva, chief executive of New Zealand’s Meat Industry Association, says the sector is facing challenges and disruption to the supply chain, but there is strong demand for protein. “Consumers are clearly demanding healthy, natural and nutritious beef and lamb in the wake of Covid-19. There has been a growth in online transactions and sales for red meat, particularly in China.” 

BNZ economist Doug Steel further predicts primary industries will move from comprising 54% of our export earnings to more than 70% this coming year. Increasing international demand for our existing primary exports such as red meat, dairy and fresh produce, even by a few percent, will certainly help to soften the economic blow. 

But a small lift in exports of existing primary commodity goods alone will not be enough to reboot our economy at large. Raw commodities like processing meat or milk powder, while currently in great demand, command only a fraction of the price premiums of value-added branded counterparts, like immune-boosting infant formula brands, omega-rich lamb cuts or celebrity-endorsed merino wool apparel and shoes, on the international market. We need only look at Icebreaker or Allbirds shoes, the latter which was valued at $1.4bn in its last funding round, to understand how much more value the primary sector has yet to tap into to by harnessing the power of brand. 

We need more of this innovation happening in our food and beverage sector. A small increase in value-added activity across the agricultural, food and beverage and natural products sector would lead to substantial material gains for the sector and economy at large – be it our dairy and red meat producers integrating new biodynamic regenerative or organic farming standards into their practices, more of our fisheries and horticultural sectors transforming low-value raw waste materials and byproducts into high-value immune-boosting nutraceuticals and health products, or focusing on building more immune-boosting and wellness-oriented infant formula companies like Bluebell and A2. The opportunities are staring us right in the face. Karapeeva of the Meat Industry Association says New Zealand’s red meat processing and exporting companies have been agile enough already to pivot to other markets and other segments, such as retail and online channels. Let’s build on this.

Jahna Tuliau of Gravity Fishing sets a blue cod jigger off Bluff (Photo: Tony Stewart)

Sanford is a great example of a primary sector company moving in this direction. Through the work it undertook at Auckland food development facility the FoodBowl, the seafood company recently shifted its R&D efforts towards using its raw material supply for the production of high-value nutraceutical ingredients such as fish oils, marine collagen, proteins and mussel extracts to produce a broad range of high-value products, including dietary supplements and cosmetics. The company this year has committed to invest $20 million into a Blenheim-based marine-extract research lab and factory that will not only bring 30 new jobs to Marlborough, but also open up new, higher-value diversified product offerings that health-conscious consumers are increasingly seeking.

Beyond our primary sector, New Zealand’s thriving F&B industry, which has a combined revenue of $71.7 billion (2018/19), and which accounts for 46% of all goods and services exports, is an obvious area in which much of this value-add can be harnessed. The Covid-19 crisis presents unique opportunities for the industry to collaboratively innovate new products and offerings backed by science-based health, sustainability and/or lifestyle claims for the world’s wealthy, discerning global consumers desperately seeking health, wellness and new experiences.

Now is the time for the F&B sector to come together to develop the next generation of functional food brands based on holistic human physiology models (like Australia’s the Beauty Chef); to transform New Zealand’s less-than-pretty second-grade high-quality organic produce (which would otherwise be thrown away) into high-value brands like organic baby foods or polyphenol-rich anti-ageing beverages, as Australia Organic Food Co has done; and for more companies to get on board the plant-based diet revolution using NZ-grown, trusted and healthy products, following in the footsteps Otis Oat Milk and Sunfed Meat. 

Facilities like the FoodBowl, as well as the country’s experienced R&D institutes like the Riddett Institution and Plant & Food, are well-equipped test beds to spur, support and help grow F&B and natural product innovation across the industry, and are there to be utilised by more New Zealand innovators. 

The 100% Pure campaign has created billions in value beyond the tourism sector. Why can’t we do something similar for the food industry? (Photo: Tourism New Zealand)

To top it all off, we need a compelling and unified NZ Inc brand taking in all our quality agricultural products and F&B offerings. A brand story that collectively promotes and provides a voice for the entire industry on the international stage, underpinned by a strong, compelling and robust digital platform.

We’ve done it for tourism. We’ve done it for our kiwifruit industry. Now let’s do it for the food industry at large. Think 100% Pure brand story scale and scope, but this time for our incredible food and natural products. Humans gravitate towards brands that resonate with our needs and desires – brands that have an honest story. Now is the time to collectively, as a nation, develop a campaign that targets the world’s discerning, sophisticated, health-conscious consumers in a way that not only promotes New Zealand’s products to the world but translates brand preference into brand choice and sales. 

As Geoff Ross, executive chairman for the Moa Group, suggested in his recent “Bringing New Zealand to you” manifesto, in the absence of international tourism, we should create a heartfelt campaign that brings New Zealand’s primary and F&B products to the world when the world can no longer come to us. 

This last piece is especially vital for the success of our food industry. More than ever, in the wake of Covid, consumers globally are expressing strong preferences for local food and brands over international ones, across all categories. If we are to have an advantage over the blanket “buy local” push going on in almost every one of our key export markets offshore, we need to be superior. Superior in our product offerings and even more exceptional in our storytelling and branding. 

As Winston Churchill wisely put it, never let a good crisis go to waste. For better or worse, Covid is finally pushing our food sector in the deep end to collectively, collaboratively and strategically invest in new, high-value innovations and to diversify the range of great products New Zealand offers the world. This is a good thing. Together, we must come together to blaze new lucrative trails and become the world’s most trusted and leading food and wellness innovators. To create rapid, impactful and profitable change fit for a Covid world. 

Now is New Zealand’s time to shine, to help re-rail our economy and show the world we have what it takes to enable people to thrive in this new world.

Keep going!