NZ 'missing out' on added value bonanza

File Photo / NZ Herald

New Zealand is underperforming when it comes to high-value, processed food exports, according to Government-commissioned research.

According to the report - Moving to the centre: the future of the New Zealand food industry - such products made up only around 14 per cent of this country's total food and beverage export value, per capita, in 2009.

By comparison, processed edibles made up about 30 per cent of Denmark's total food and beverage export value during the same year and almost 40 per cent of Ireland's.

According to the research, New Zealand's export mix to Australia is more weighted towards processed foods, with $877 million (excluding wine) worth of those products shipped across the Tasman in 2009.

"Conceptually, if we could get our global food export mix to resemble our Australian food export mix, our food industry would be more value-added and profitable," the report states.

Minister of Economic Development Gerry Brownlee said the research suggested New Zealand could double the value of food and beverage exports, which were worth $17.6 billion in 2009.

"We know that New Zealand needs to sell more added value food products ... exports to Australia show it can be done," he said.

Tim Morris, director of Coriolis Research, which conducted the report, said one way New Zealand could add value to the sector would be through increasing its exports of infant formula, rather than milk powder.

Milk powder undergoes a 10-fold increase in value when turned into baby formula, the research found.

Brownlee said Australia was a good "stepping stone" for manufacturers to use on the way to other markets.

"New Zealand is achieving success in Australia across a wide range of non-traditional food and beverages - these are our growth stars and the foundation for future export growth to the world," he said.

One example of success across the Tasman is Kiwi juice maker Charlie's, which secured a deal to stock its products in the 750 stores of Australian supermarket giant Coles last month.

But Morris said going beyond Australia to much larger markets, such as China, required a level of scale many Kiwi food manufacturers would find difficult to reach in a single step.

Morris said this country already had many successful food manufacturers that often "fly under the radar".

New Zealand was fundamentally good at producing food, he said, and much economic benefit could be gained through more focus on the edibles sector - rather than trying to create new industries.

EXPORT MIX
Proportion of New Zealand exports by sector
* Food and beverage....53 per cent
* Commodities....3 per cent
* Wool....2 per cent
* Tools & Machinery....4 per cent
* Oil....5 per cent
* Biomedical....2 per cent

Source: Coriolis Research