How do we grow the F&B industry?

14 Jun 2021 12:43:00
Industry transformation – easy to discuss but harder to implement, the Government wants to grow more innovative industries, helping them to lift the productivity, sustainability and inclusivity - the food and beverage sector is one of those industries. And we are right behind them, so last week the NZFIN teams from across New Zealand came together with MPI to workshop some of the challenges, opportunities, restraints the food and beverage industry faces. This work is helping inform the Industry Transformation Plan (ITP) for our sector. MPI hope to have it available in the first quarter of next year, at the latest. Here Alexandra Allan, FoodBowl Chief Executive briefly shares some of what we shared and know from working with business, large and small across all parts of the F&B sector.

The big question – are we being left behind internationally due to a lack of clear direction on where we are going as an industry? We see so much incredible innovation and potential happening in all parts of the sector, but so much of it is happening in isolation, leading to duplication. How do we come together as an industry and work collaboratively in a way that strengthens the NZ Inc proposition?

One of the biggest opportunities is focusing more on value-add premium products rather than straight commodity exports. We are disproportionately good at growing things, but as increased pressures are placed on the primary industries, on the constraints of getting goods across the oceans, how do NZ food manufacturers ensure we are staying on top of sustainability, ethical food production, animal welfare and strengthening our social licence to operate?

We all know what our strengths are; but we discussed more of what’s holding entrepreneurs and manufactures back. Its lack of all these and more; collaboration, transportation, manufacturing infrastructure, investment, onshore ownership. Then we add in the cost of manufacturing – it’s expensive in New Zealand, starting from the land then moving to labour, energy, compliance, cost of getting to the international markets. The barriers are real, but so too is the opportunity.

The world over, we have a strong reputation for supplying high quality ingredients – think meat, and milk.

Can we also put our focus on finding out what export consumers value and produce product aligned more closely to what the market is telling us? This means getting much closer to the consumer. All easy said but there is a real conundrum at play. We are known internationally for high quality food safety outcomes due to our strong industry compliance, yet for innovators, it’s this very same compliance that can hold them back internationally. To manufacture small runs of sample products to take offshore for human sampling and market testing – the cost and restrictions of compliance makes it a highly complex and costly exercise. To truly transform the industry, activators must firstly, be supported to innovate, then encouraged to succeed or fail fast. Products live or die in the market, so let’s enable them to get those products there much faster.

I mentioned a key barrier being a lack of manufacturing equipment. As a network, NZFIN helps with the development of many products at the beginning of their lifecycle. We can manufacture small runs, for some products the next step is a contract manufacturer, then ultimately their own factory. However, so many products and processes have nowhere to go after they leave one of our hubs, the machinery needed for manufacturing simply does not exist in New Zealand. As an example, this is hugely challenging right now for the production of plant-based milks, extruded plant-based meat analogues and small-pour functional beverage shots. New Zealand simply does not have the processing capability. We have the brains, the expertise and the science – but not the equipment. Often, we adapt the product/formulation or process to suit the aging manufacturing equipment available – so often hampering the innovation that is possible. Without more investment and earlier adoption of technology, we risk always being in catch up mode with the rest of the world.

Ultimately, we all agreed the success of the ITP will be in its ability to provide a clear pathway that enables the industry, leads to growth, helps innovators make premium, in demand products in ways which are more time and capital efficient. It’s a big task and our workshop posed many questions. As an industry, let’s come together to all help inform what the future opportunity looks like… for all of us.