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FT-mar16-Vol51-2

INDUSTRY BODIES’ CRITICAL ROLE www.foodtechnology.co.nz 45 What human being over 25 isn’t astonished by what is now possible using technology? Looking back over the past 30 years in the food and beverage export sector, I’m grateful that the office no longer requires a telex. The internet, cheaper air travel and modern communications have all improved our ability to identify offshore opportunities, access markets and gather intelligence, making doing business offshore more affordable and convenient. But perhaps more astonishing than the advancements in technology is our failure to add any meaningful value to the primary sector over this same period. The quality of our food and beverage is still very high when compared with the rest of the world. We are competitive and have access to capital to invest in downstream processing and value added products. So why have we seen no increase in the value per container (in real terms) exported from New Zealand in the last 30 years? Why are we still hearing “we must add value to our primary products” after 30 years of deregulation? Firstly, it is little understood that New Zealand was stripped of much of its managerial and food processing capability post deregulation when offshore companies moved head offi ce functions to Australia. While our food technology training courses generate high quality, they have failed to turn out meaningful numbers of graduates to replace managerial shortfall and generate a pool of entrepreneurs in the sector. Meanwhile students have been attracted in large numbers to software, IT and digital media courses. The recent sale of Diligent for $943m is testament to the rewards of this human capital investment. Correspondingly, Silver Fern Farms recently sold 50% of its shares for $260m. The disparity is striking. Secondly, valuable export experience has been lost following the demise of the single desk sellers such as the Meat Board following deregulation. New Zealand does not have a large pool of individuals with export experience in the food and beverage sector. NZTE and others have tried to overcome this with training and support of SMEs. However individual operators have largely had to develop their own specialised skills inhouse and take on signifi cant costs to present their products to international consumers. Countless small players across the country learning how to export (all reinventing the wheel) represents a huge cost in capital, time and energy. Thirdly, with a few exceptions, businesses in New Zealand with export aspirations are typically small scale. Faced with a very modest domestic market (our population is similar to a regional city in China) many businesses lack the resources to commence an ambitious export programme of value-added product in the fi rst place. Arguably this is the crucial difference between the food and beverage sector and the digital media sector where scalability is more easily achieved. Of course individual businesses with export capability can access support through NZTE, and many do with good results. But a lot more can be done more efficiently for the country as a whole through industry bodies aggregating small operators and assisting with information sharing, R&D, advocacy and advisory services. And let’s not forget the cheerleading role industry bodies play to motivate members to greatness. The wine industry is an excellent example of how an industry can collaborate internationally while still competing locally. In the time it’s taken to ditch the telex, we’ve seen a move from niche players producing low cost fl agons of nasty plonk to a $1.5billion export industry marketing sophisticated world class wines. And who’s not astonished by that? The challenge for other sectors is to work at speed and collaboratively in the brutally competitive export market. Chris Claridge is the newly appointed head of Potatoes New Zealand. M Y S AY


FT-mar16-Vol51-2
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