Escolar Documentos
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Industry Snapshot
Final Report
February 2012; v1.0 0
www.foodandbeverage.govt.nz
This information was prepared by Coriolis solely for the use of our client; it is not to be relied on by any third party without prior written consent.
Coriolis is a strategic management consulting and
market research firm
We work with organisations to help them grow. For corporations, that
often means developing strategies for revenue growth. For
governments, it means working on national economic development. For
non-profits, it means helping to grow their social impact.
The coriolis force, named for French physicist Gaspard Coriolis (1792-
1843), may be seen on a large scale in the movement of winds and
ocean currents on the rotating earth. It dominates weather patterns,
producing the counterclockwise flow observed around low-pressure
zones in the Northern Hemisphere and the clockwise flow around such
zones in the Southern Hemisphere. To us it means understanding the
big picture before you get into the details.
Glossary of terms 5
F&B IP Overview 8
1. Primary production 12
Land based 15
Water based 29
2. F&B manufacturing 34
3. Markets 48
GLOSSARY OF TERMS
This report uses the following acronyms and abbreviations
A$/AUD Australian dollar NA/ME/CA North Africa / Middle East / Central Asia
ABS Absolute change NZ New Zealand
ANZSIC AU/NZ Standard Industry Classification NZ$/NZD New Zealand dollar
AU Australia R&D Research and Development
Australasia Australia and New Zealand S Asia South Asia (Indian Subcontinent)
b Billion SE Asia South East Asia
CIF Cost, Insurance and Freight S.H./N.H. Southern/Northern Hemisphere
CAGR Compound Annual Growth Rate SS Africa Sub-Saharan Africa
C/S America Central & South America (Latin America) T/O Turnover
CRI Crown Research Institute US/USA United States of America
PAGE 5
METHODOLOGY & DATA SOURCES
Data was from a variety of sources, and has a number of identified limitations
- This report uses a range of information sources, both qualitative - Coriolis makes no representation, warranty or guarantee,
and quantitative. whether express or implied, as to the quality, accuracy,
reliability, currency or completeness of the information
- The numbers in this report come from multiple sources. While we provided in the report.
believe the data are directionally correct, we recognise the
limitations in what information is available. - All trade data analysed in all sections of the F&B Information
- In many cases different data sources disagree (e.g. project are calculated and displayed in US$. This is done for a
Statistics New Zealand vs. FAO* vs. UN Comtrade). range of reasons:
- Many data sources incorporate estimates of industry 1. It is the currency most used in international trade
experts. 2. It allows for cross country comparisons (e.g. vs. Denmark)
- As one example, in many cases, the value and/or volume 3. It removes the impact of NZD exchange rate variability
recorded as exported by one country does not match the 4. It is more comprehensible to non-NZ audiences (e.g. foreign
amount recorded as being received as imports by the investors)
counterparty [for understood reasons]. 5. It is the currency in which the United Nations collects and
tabulates global trade data
- In addition, in some places, we have made our own clearly noted
estimates. - The opinions expressed in this report represent those of the
industry participants interviewed and the authors. These do not
- Coriolis has not been asked to independently verify or audit the necessarily represent those of Coriolis Limited or the New
information or material provided to it by or on behalf of the Zealand Government.
Client or any of the data sources used in the project.
- The information contained in the report and any - If you have any questions about the methodology, sources or
commentary has been compiled from information and accuracy of any part of this report, please contact Tim Morris, the
material supplied by third party sources and publicly report’s lead author at Coriolis, on +64 9 623 1848
available information which may (in part) be inaccurate or
incomplete.
PAGE 7 Note: Every year two subsectors are completed in more detail. Seafood and Nutraceuticals in 2011
INDUSTRY SNAPSHOT
This snapshot of New Zealand’s Food & Beverage industry forms a part of the wider Food & Beverage
Information Project
Structure of the New Zealand Food & Beverage Information Project
(2011)
PAGE 8
TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
F&B IP Overview 8
1. Primary production 12
Land based 15
Water based 29
2. F&B manufacturing 33
3. Markets 47
NZ F&B TRADE BALANCE
New Zealand has a strong and growing trade surplus in food and beverage
$15.0 $15.0
Net trade
balance
$10.0 $10.0
Exports
$5.0 $5.0
$- $-
Imports
-$5.0 -$5.0
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
PAGE 10 Note: does not exactly match other data due to use of SITC codes (rather than HT codes, which are not available back this far) for understood reasons; Source: UN Comtrade; Coriolis
analysis
NZ F&B INDUSTRY VALUE CHAIN MODEL
We propose the following simplified model of the New Zealand food & beverage industry value chain; this model
guides our work
Simplified model of the New Zealand food & beverage industry supply/value chain
(model; NZ$b; YE June 2011 or as available) We consume domestically almost
50% of the food we produce
Value of NZ F&B
Aquaculture imports
PAGE 11 Source: Statistics NZ; MAF SONZAF; past Coriolis research; Coriolis estimates and analysis
1. PRIMARY PRODUCTION
The first section looks at primary production
Simplified model of the New Zealand food & beverage industry supply/value chain
(model; NZ$b; YE June 2011 or as available)
Primary
Land
$18.4b
Livestock
Farms
$14.5b
Horticulture
& Crop Farms
$3.9b
Wild capture
Aquaculture
PAGE 12 Source: Statistics NZ; MAF SONZAF; past Coriolis research; Coriolis estimates and analysis
SITUATION – PRIMARY PRODUCTION
New Zealand’s historical low intensity farming model is under pressure; intensification appears to be the path
forward
Growing global need for food 2. The drive to continue to increase primary production
- The global population continues to increase and has just passed
the seven billion people mark. At the same time, the rising Intensification the path forward
middle class in Asia has increasing disposable income leading to - As a result of these pressures, primary production is moving into
increasing demand for premium, high quality food and beverage. a phase of intensification. Examples of intensification include:
The world needs to significantly increase food production and
New Zealand can play a part in that process. - Conversion of sheep paddocks into wine grapes
- Conversion of rain fed beef farms into irrigated dairy farms
New Zealand is currently low intensity - Flat wild catch of seafood being supplemented by more
aquaculture
- While New Zealand’s exports of food and beverage (F&B) are
significant, these account for just 2.5% of global trade in food. - New Zealand can’t ignore these issues. As a country New
The country has considerable untapped capacity to export more. Zealand has a competitive advantage in pastoral agriculture. It
New Zealand is a country the size of Italy or the United Kingdom, also has strong agricultural science, and research capability in its
but with the population of Singapore. However Italy feeds a Universities, private institutes and Crown Research Institutes. At
domestic population of 60m people and exports twice as much the mega level New Zealand now needs to leverage these
F&B as New Zealand. capabilities and build on its existing strengths to develop ways to
increase production without degrading the land and water.
- The New Zealand Government has set a target of tripling the
country’s food and beverage exports over the next 15 years. This
will be achieved through both growth of existing major sectors Learn from peers
and the newer emerging growth stars. - There is nothing unique with the problems facing New Zealand,
other countries have had very similar pressures. The experience
Multiple pressures of high relevant global peers (e.g. Denmark, Ireland, Oregon)
strongly suggests intensification will continue going forward and
- New Zealand has had a long period of bringing new – often that strong increases in production are possible. These peers
increasingly marginal - land into production. However, this easy clearly have strong lessons available for New Zealand.
growth appears to have come to an end. Multiple pressures are
now coming to a head:
1. The growth of lifestyle blocks and “urban sprawl”
PAGE 13
PRIMARY SECTOR – CONCLUSIONS
It is difficult to see production growth going forward driven by anything other than intensification
More But…
PAGE 14
1. PRIMARY PRODUCTION – LAND BASED
Land based primary production had a turnover of $18.4b
Simplified model of the New Zealand food & beverage industry supply/value chain
(model; NZ$b; YE June 2011 or as available)
Primary
Land
$18.4b
Livestock
Farms
$14.5b
Horticulture
& Crop Farms
$3.9b
PAGE 15 Source: Statistics NZ; MAF SONZAF; past Coriolis research; Coriolis estimates and analysis
HOW BIG IS NEW ZEALAND?
New Zealand is not a small country; many regions of New Zealand are the size of major European countries or
American states
Total area: New Zealand vs. Select US East Coast states vs. select developed peer countries
(km2; 2011)
289
275 274
3 Luxembourg
Southland 34 62 West Virginia
49 Slovakia
Otago 32
25 Maryland
23 New Hampshire
West Coast 23
13 Connecticut
Marlborough 12 New Jersey
19 43 Denmark
Nelson/Tasman 10
Wellington 8
Manawatu-Wanganui 22
Taranaki 41 Switzerland
7
Hawke’s Bay 14
Gisborne 8 122 New York
Bay of Plenty 12 37 Netherlands
Waikato 26
Auckand 6 31 Belgium
Northland 14
NZ USA Europe
Lifestyle blocks
Cities and towns
New Zealand 26%
Idle lands
Other government lands
Other
Belgium 14%
Other 41 16%
Sweden 11%
Other DOC 14
5%
Finland 9%
Farming 126
47%
Portugal 8%
31%
National parks
& reserves 71 Denmark 5%
26%
Ireland 2%
Forestry
(private)
16 6% Uruguay
If we add DOC to other 0%
Government land (e.g. Defence,
Landcorp etc.), likely ~40% of
country in Crown ownership TOTAL = 268 (000) km2
PAGE 17 Source: Statistics New Zealand; World Database of Protected Areas (http://www.wdpa.org); Department of Conservation Annual Report 2010; Coriolis analysis and estimates
LAND – FARM LAND USE
The amount of farm land is declining rapidly such that New Zealand is now farming the same amount of land it
did in 1900 (~120 years ago); growth of “other” appears to be prime driver since 1990
Total New Zealand area in farming and private forestry Share of area by major use types
(sqkm; 000; 1891-2010) (sqkm; 000; 1990-2010)
250
All other
200
200
Park/
150 protected
150
1900 2010
100 Future
direction 100
?
Farming/
forestry
50
50
- -
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1891
1897
1903
1909
1915
1921
1927
1933
1939
1945
1951
1957
1963
1969
1975
1981
1987
1993
1999
2005
PAGE 18 Note: Missing data estimated from available data; Source: Statistics New Zealand; World Database of Protected Areas; Coriolis analysis
LAND – FARM LAND BY TYPE
84% of farm land is used for grazing; the amount of grazing and arable/fodder land has been falling at -1.0% per
year for the past quarter century
Percent of farm land by type Farm land by type
(% of sqkm; 2010) (sqkm; 1984-2010)
16,702
2,229 15,119
Tussock 2,691
21%
Total = 12,584
1984 1994 2002 2010
40
1937
3
30
2010
2
20
1
10
- -
1881
1886
1891
1896
1901
1906
1911
1916
1921
1926
1931
1936
1941
1946
1951
1956
1961
1966
1971
1976
1981
1986
1991
1996
2001
2006
1851
1858
1865
1872
1879
1886
1893
1900
1907
1914
1921
1928
1935
1942
1949
1956
1963
1970
1977
1984
1991
1998
2005
PAGE 20 Note: Missing data and missing years interpolated for available data; Source: NZ Handbook of Historical Statistics; Department of Statistics; Statistics New Zealand; DairyNZ; Coriolis
analysis
LAND – IRRIGATION IN NZ
New Zealand land under irrigation has been growing at 6% per annum, driven by the South Island; 76% of
irrigated land grows grass
Consented irrigation area by key region Percent of consented irrigation area by type
(ha; 000; 1999-2010) (ha; 000; %; 2010)
CAGR
(99-10)
6% 1,077 Other
2%
943
Horticulture
18%
680 Canterbury
Arable
592 643 4%
400
Percent of total area which is irrigated: NZ vs. select identified peers Comments/Notes
(%; 2010)
- Unlike some industry commentary, this
suggests NZ is already relatively well
16% irrigated
8%
6%
4%
4%
2%
0%
Nebraska
Netherlands
Arkansas
Denmark
California
Israel
Idaho
Portugal
Kansas
Colorado
Florida
Mississippi
Washington
France
New Zealand
Georgia
Texas
Slovakia
Missouri
Oregon
Oregon
Lousiana
Wyoming
Chile
Utah
Montana
North Carolina
Oklahoma
Arizona
New Mexico
Belgium
South Africa
United Kingdom
Switzerland
Norway
Australia
Sweden
Finland
Wales
Ireland
Scotland
PAGE 22 Note: NZ data consented not actual; actual lower but no data available; Source: MfE (http://www.mfe.govt.nz/environmental-reporting/freshwater/demand/graph-data-trends.html);
CIA World Fact Book; Wikipedia; University of Colorado; USGS; Coriolis analysis
HORTICULTURAL AREA
Horticultural area experienced a strong surge in the mid 70’s through the mid 90’s; since then grapes have grown
while the area for most other fruit has declined
120 years of area in fruit and vegetables in New Zealand Comments/Notes
(ha; actual; 1890-2009)
- Historical data should be treated as
directional due to adjustments made to
data (discussed below)
Kiwifruit
60,000
Other fruit
Apples
40,000
20,000
Vegetables
Orchards
-
1890
1894
1898
1902
1906
1910
1914
1918
1922
1926
1930
1934
1938
1942
1946
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
PAGE 23 Note: Missing data and missing years interpolated for available data; Source: NZ Handbook of Historical Statistics; Department of Statistics; Statistics New Zealand; UN FAO; P&F
FreshFacts; Coriolis analysis
WINE – BENCHMARKING
Cool climate peer group suggest opportunities for further wine area
PAGE 24 1. Brandys, cognac and other distilled wines (but not port or fortified fines which are under still); Source: UN FAO AgStat; Wikipedia; CIA World Fact Book; UN Comtrade database;
Coriolis analysis
FARM GATE F&B REVENUE
Farm gate F&B revenue has been growing, driven by dairy
Farm gate gross agricultural revenue from food and beverage primary products
(NZ$b; nominal/non-inflation adjusted; YE June; 1996-2011) 15 year 15 year
CAGR Absolute
(96-11) (96-11)
$18.1 5.9% +$10.5
$17.6
$16.2
$15.2
$13.4
$12.7 $12.8 $12.7 $9.5 Dairy 7.4% +$6.3
$11.7 $10.1 $7.9
$11.4 $11.6 $6.4
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
PAGE 25 Note: totals may not add due to rounding; Source: MAF SONZAF (various years); Coriolis analysis
PRICE VS. YIELD
Farming is a difficult business; farmers must make constant gains just to stand still
$40.00
350
$35.00
300
$30.00
Farm gate value 250
Yield
(Inflation adjusted $25.00
(cwt/acre)
US$/cwt)
200
$20.00
150
$15.00
100
$10.00
$5.00 50
$- 0
1913
1916
1919
1922
1925
1928
1931
1934
1937
1940
1943
1946
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
PAGE 26 cwt = hundred weight; Note: historic US data used as historic NZ data poor to non-existent; Source: USDA NASS database (custom job); US BLS database (custom job); Coriolis analysis
FARMING SYSTEM IMPROVEMENT EXAMPLE – DAIRY
Any given farming system has an underlying rate of improvement, but competing systems may improve at
different rates (e.g. pasture vs. feedlot), as this example from the dairy industry shows
93 years growth in New Zealand butterfat per cow Milk per cow: NZ vs. select peers
(kg/cow; 1917-2010) (t/cow; 1961-2009)
CAGR
200 10.0 (61-09)
120 6.0
Australia 2.2%
100 5.0
Ireland 1.8%
Argentina 1.9%
80 All our science, all our 4.0
research, all our investment
New Zealand 0.4%
just keeps us on this line
60 3.0 China 1.8%
China
Last 10 years
40 2.0 6.2%
Brazil 1.3%
1.0
20
-
-
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
1917
1922
1927
1932
1937
1942
1947
1952
1957
1962
1967
1972
1977
1982
1987
1992
1997
2002
2007
PAGE 27 Source: UN FAO AgStats; Statistics NZ; Department of Statistics; DairyNZ; Coriolis analysis
COMPETITORS IMPROVING FASTER
New Zealand’s key dairy competitors are not standing still; they continue to improve, often at a faster rate
1973 1981 1991 2001 2007 1973 1981 1991 2001 2007 1973 1981 1991 2001 2007 1973 1981 1991 2001 2007
19,396
-1.4%
Question: Can you project these variables in 2025?
16,757
15,313
14,000
13.1
1973 1981 1991 2001 2007 1973 1981 1991 2001 2007 1973 1981 1991 2001 2007 1973 1981 1991 2001 2007
Simplified model of the New Zealand food & beverage industry supply/value chain
(model; NZ$b; YE June 2011 or as available)
Primary
Land
$18.4b
Livestock
Farms
$14.5b
Horticulture
& Crop Farms
$3.9b
Wild capture
Aquaculture
PAGE 29 Source: Statistics NZ; MAF SONZAF; past Coriolis research; Coriolis estimates and analysis
WATER – FISHING AREA
New Zealand has 6.7m square kilometres of controlled ocean space (15 times the land area); unfortunately much
of this is relatively unproductive water over a kilometre deep
Limit of Exclusive Economic Zone (EEZ) Area of EEZ by water depth
(area, depth, 2010) (km2; % of area; 2010)
Defined as 200
nautical miles from
coastline
200 to 1,000m
1.5
22%
1km+
4.8
72%
PAGE 30 Note: a nautical mile is 1,852 metres; Source: Wikipedia (http://en.wikipedia.org/wiki/Exclusive_Economic_Zone); Sealord; Coriolis analysis
WATER – WILD CATCH
Wild catch has fallen; direction over the next 15 years is unclear, but unlikely to be up
Orange
Roughy
300
Other
200 marine fish
100
Crustaceans
Other Molluscs
Squid/scampi
- Other
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Wheat 53,885
Salmon 16 100 $145 $1,450,000
Potatoes 11,398
Apples 9,284
Clearly, this is revenue only and does not reflect Oats 7,425
the cost of business, expenses , capital outlay etc.
Figure should be taken as directional as varies
depending on the figure used for productive space Aquaculture 6,250
Onions 4,511
Avocados 4,117
PAGE 32 Note: Domestic value and area is directional only; Source: MFish; Aquaculture NZ; Industry Estimations; MAF; UN FAO; Plant & Food Fresh Facts; Coriolis analysis
2. F&B MANUFACTURING
Food & beverage manufacturing has a turnover of $37.7b
Simplified model of the New Zealand food & beverage industry supply/value chain
(model; NZ$b; YE June 2011 or as available)
Primary Secondary
Dairy
Horticulture Meat
& Crop Farms
Seafood
$3.9b
Produce
Beverages
Nutraceuticals
Oceans & Lakes
Processed/other
Wild capture
Aquaculture
PAGE 33 Source: Statistics NZ; MAF SONZAF; past Coriolis research; Coriolis estimates and analysis
OVERVIEW – THE SITUATION
F&B manufacturing is an important sector that will require significant capital if it is to triple exports over the next
fifteen years
An important sector next 20 years New Zealand’s F&B exports will likely come to
- New Zealand’s food & beverage (F&B) manufacturing sector is resemble those of peer group countries.
large, with almost 2,000 enterprises, employing 80,000 people - The government’s Economic Growth Agenda (EGA) has set a
with a total revenue of approximately NZ$38 billion. It accounts target of tripling New Zealand’s F&B exports over the next 15
for 54% of exports. years. While this is a clearly a stretch target all of our research
suggests it is possible.
Still New Zealand owned, primarily by farmers - To achieve this, the path forward over the next 20 years is about
- Historically New Zealand has been a major producer of turning ingredients into packaged/processed foods (e.g. infant
ingredients through farmer-owned cooperatives and marketed formula instead of milk powder). This transition will require large
via quasi-government monopsonies1. amounts of new investment in research, plants and equipment,
sales and marketing.
- Despite media comment, the New Zealand F&B industry is still
owned by New Zealanders. Four of the top five New Zealand F&B - Conceptually this will require something approaching tripling the
firms are owned by farmers. There is nothing wrong with farmers amount of capital in the F&B industry. Firms will need to make a
owning the food industry. This is a common situation across peer significant increase in their investment to make this required
group counties all of whom have a somewhat similar structure of transition to packaged goods.
ownership of primary production.
Foreign capital filling the gap
Moving to the centre - Producer owned co-operatives strive to maximise returns to
- Broadly speaking 50% of what is sold in a supermarket anywhere members, which limits availability of capital to fund growth.
in the world is fresh perishables (e.g. meat, seafood, produce, - Nevertheless, international investors are providing a large and
dairy) and 50% is consumer-ready packaged shelf-stable constant in-flow of capital, particularly in the areas of strong
products. The export mix of peer group countries match these growth potential going forward (i.e. beverages and processed
proportions (i.e. 50/50). New Zealand, on the other hand, is 80% foods).
weighted toward perishables and only 20% shelf-stable.
- In the last 10-15 years New Zealand’s F&B industry has begun to
transform into a producer of consumer ready packaged goods.
- Processed/packaged F&B are showing rapid growth, and over the
PAGE 34 1. Monopsony = a monopoly on buying not selling
CAPABILITY ASSESSMENT
To truly succeed in the international market New Zealand needs to improve in some key areas
NZ current capabilities
102 107 115 119 125 124 121 121 118 108 F&V 1% +6
120
147 138 134 129 121 115 104 97 Seafood -4% -50
133 128 112
58 57 53 51 56 57 57 57 58 72 78 Dairy 3% +20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 36 Source: Statistics New Zealand (Detailed industry for enterprises (ANZSIC06)); Coriolis analysis
F&B MANUFACTURING – EMPLOYMENT
The number of people employed in F&B manufacturing was growing through 2005 and has been flat-to-down
since then
Number of people employed in F&B manufacturing by sector Comments/Notes
(people; head count; 000; 2000-2010)
- Statistics NZ does not collect data on
nutraceuticals and foods for health; we
Absolute suspect much (but not all) of this sector is
CAGR change caught in “other” food
83.3 82.9 83.4 82.7 (00-10) (00-10)
81.6 81.9 - Dairy clearly has higher productivity per
79.4 80.1 1% +6
78.3 employee than meat
76.1
73.6 - Head count is as of Feb of year in question;
18.4 18.4 20.4
17.6 20.5 19.6 this will not catch some seasonal surges
16.5 17.1 18.9 Processed/ 2% +3
16.0 Other
16.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 37 Source: Statistics New Zealand (Detailed industry for enterprises (ANZSIC06)); Coriolis analysis
F&B MANUFACTURING – EMPLOYMENT BY KEY FIRM
Looking at total industry employment by key firms and sectors highlights that industry employment is spread
across a wide range of firms
Number of people employed in F&B manufacturing in New Zealand by key firm and by sector Comments/Notes
(people; head count; %; 2010)
- Results should be treated as partially
directional as SNZ does not disclose actual
firm sector classification (i.e. classifications
are Coriolis assumptions)
Meadow Fresh
1% - Interestingly Fonterra is not a large
Fonterra
Other employer relative to its export volumes
11% Other dairy (high employee efficiencies)
17%
2%
Griffins - Classification of some firms overlaps
1% multiple classifications (e.g. Heinz-Watties)
Heinz-Watties - Fonterra is domestic employees (excluding
2% TipTop)
Silver Fern Farms
Goodman Fielder 9%
2% - Excludes wholesaling
Other beverages
Alliance
9%
9%
Lion
2%
AFFCO ANZCO
Other F&V 4% 3%
3%
T&G
2% Other meat
Tegel
10%
Other seafood 2%
Sealord Inghams
4%
2% Sanford 1%
2%
80,080 employees
(head count)
PAGE 38 Source: Statistics New Zealand (Detailed industry for enterprises (ANZSIC06)); various other sources (see module 2 sections for details); Coriolis analysis
EMPLOYMENT BY INDUSTRY BY REGION
Looking at industry by region we find farm-based products spread across the regions, but processed foods more
concentrated in Auckland
F&B employment by industry by region
(people; head count; 2010)
19%
Remainder UNI 27% 43%
47%
1%
37%
50%
16%
15%
Canterbury 18% 3%
25% 3%
16%
8%
23%
45%
10% 15%
Remainder SI 29% 27%
13% 13%
11%
PAGE 39 Note: UNI = Upper North Island; Source: Statistics New Zealand (Detailed industry for enterprises)
F&B MANUFACTURING – TURNOVER
Total F&B manufacturing turnover was $37.7b in 2009; manufacturing turnover has been growing at a 6.5%
CAGR over the last decade
F&B manufacturing turnover growth Comments/Notes
(NZ$; b; 1999-2009) Absolute
- 2010 not yet available
CAGR change
(00-10) (00-10) - Data appears to be turnover of New
$37.7 6.5% +$17.7 Zealand operations, not global sales
$35.7 - Beverages technically includes tobacco
$4.7 Beverage 4.1% $1.5 manufacturing, though we do not believe
$32.0 $4.3 cigarettes are manufactured in this country
$26.8
$24.9
$22.2 $23.1 $22.5 $23.0 $23.0
$18.7
$16.9
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
PAGE 40 Source: Statistics New Zealand (Annual Enterprise Survey; supplementary tables; various years); Coriolis analysis
TOP 64 NZ F&B BY OWNERSHIP
Looking at the ownership of the turnover of the top 64 New Zealand F&B firms, we find ~60% owned by farmers,
75% owned by New Zealanders, 14% by other Anglo-Saxon countries, 3% by Europeans and 8% by Asia
Turnover of top 64 New Zealand F&B firms by ownership type/country Comments/Notes
(% of NZ$m; 2010e)
- Companies with mixed ownership (e.g.
Japan/Iwi) have had their turnover
allocated proportionally
Iwi 1% Listed 1%
- The Anglo-Saxon four own as much as
Private 14% Charity 0% private individuals
Anglo- - Data includes significant number of
Saxon
14% estimates
Australia 8% - Totals may not sum due to rounding
USA 5%
Canada 1%
United Kingdom 1%
Swiss 1% Euro
France 1% 3%
75%
Netherlands 1%
Japan 5% Russia 0%
Hong Kong 1%
Farmers 59% Singapore 1% Asia
8%
China 0%
Malaysia 0%
Thailand 0%
TOTAL = NZ$38.9b
Bakels NZ
Tasti
Yarrow's
Fern Ridge
Greenlea
Aotearoa Sea.
NZ King Salmon
Gardner Smith NZ
Jack Link's
Lean Meats
Sanitarium
Seeka
Universal Beef
Taylor Preston
Leader Brands
Villa Maria
Blurbird
FreshMax
Synlait
Hellers
Aotearoa Fish.
Cerebos NZ
Tatua
Vitaco
Talleys
Mars NZ
Scales
Fresh Direct
McCain
Constellation
Brinks
Delegat's
Chelsea
Cadbury NZ
Griffins
Unilever NZ
GWF NZ
Inghams NZ
Pernod Ricard NZ
Frucor
F&B MANUFACTURING – FIRM TURNOVER
Tegel
Ind. Liquor
Sanford
Westland
Turnover of top 64 New Zealand F&B companies
Nestle NZ
DB Breweries
investment and ~40% of total
Coca-Cola NZ
Substantial outward direct
Open Country
Sealord
Goodman Fielder NZ
Meadow Fresh
Ovation/other
MG Marketing
F&B exports
T&G
Lion
Source: Coriolis
Heinz-Watties
AFFCO
ANZCO
Alliance
Zespri
SFF
(NZ$m; 2010)
Fonterra
firms
PAGE 42
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$-
TOP 10 RESIDENT FOOD & BEVERAGE COMPANIES: NZ VS. DENMARK
Benchmarking the turnover of the top 10 domestic resident F&B firms in the New Zealand food industry with
Denmark indicates there is a “missing middle” of large firms other than Fonterra
Comparison of sales and ownership structure of top 10 food & beverage industry firms (domestic-residence only): Denmark vs. NZ
(NZ$b; 2008)
Coop/board
Listed w/cornerstone
$16.0 $16.2 Private
Private w/foreign control
Public
$13.4
$13.0
Alliance
Zespri
ANZCO Foods
AFFCO
Sealord
T&G ENZA
Westland
MG Marketing
Carlsberg
Arla Foods
Danish Crown
Danisco
Novozymes
Royal Greenland
Royal Unibrew
Chr. Hansen
AAK
Kavli Holding
PAGE 43 Note: ANZCO is not listed on the NZX but has a range of domestic shareholders (plus NSK & Itoham); Sealord is NSK and various Maori interests; Source: Coriolis
TOP 15 FOOD & BEVERAGE COMPANIES: NZ VS. CANADA
A similar message comes from a benchmarking of the top 15 F&B firms in the New Zealand food industry with
Canada: there is a “missing middle” of large firms other than Fonterra
Comparison of sales and ownership structure of top 15 food & beverage industry firms: NZ vs. Canada (all ownership)
(NZ$b; 2008)
Coop/board
Listed w/foreign control
$16.0 Listed w/cornerstone
Subsidiary of foreign
Private
Private w/foreign control
Listed
$11.5
$8.2 $8.1
$7.2 $6.9
Alliance
Zespri
ANZCO Foods
AFFCO
Goodman Fielder
Heinz Wattie's
Sealord
Lion Nathan
T&G ENZA
Westland
Coca-Cola Amatil
Tegel Foods
Frucor
McCain Foods
Cargill Canada
Saputo
La Coop fédérée
Agropur
PepsiCo Canada
Parmalat Canada
George Weston
Olymel
Molson Canada
Cott Corporation
Nestle Canada
Paterson GlobalFoods
PAGE 44 Note: ANZCO is not listed on the NZX but has a range of domestic shareholders (plus NSK & Itoham); Sealord is NSK and various Maori interests; Source: Coriolis
TOP 17 RESIDENT FOOD & BEVERAGE COMPANIES: NZ VS. MINNESOTA
A similar message comes from a benchmarking of the top 17 resident F&B (+agribusiness) firms in the New
Zealand food industry with the state of Minnesota (a major food producing state in the US)
Comparison of sales and ownership structure of top 17 resident food, beverage & agribusiness industry firms: NZ vs. Minnesota
(NZ$b; 2008)
Coop/board
$168.6 Listed w/cornerstone
Private
$45.0 Private w/foreign control
Public
$16.0
$12.5
$9.5
“The missing middle”
$7.4
$6.3
$3.3 $2.9
$2.0 $2.4 $2.1 $1.7
$1.3 $1.2 $1.1 $1.1 $0.9 $0.7 $0.6 $1.4 $0.8
$0.6 $0.5 $0.3 $0.3 $0.2 $0.2 $0.2 $0.2 $0.7 $0.7 $0.6
Fonterra
Alliance
Zespri
ANZCO Foods
AFFCO
Ravensdown
Balance
Sealord
T&G ENZA
Westland
Open Country
MG Marketing
Tatua
Taylor Preston
Villa Maria
Scales/Mr Apple
Cargill
CHS
General Mills
Land O'Lakes
Hormel Foods
Mosaic
PepsiAmericas
Rosen's
Schwan Food
Michael Foods
Davisco
Malt-O-Meal
MN Soybean
First District
Lakeside Foods
PAGE 45 Note: ANZCO is not listed on the NZX but has a range of domestic shareholders (plus NSK & Itoham); Sealord is NSK and various Maori interests; Source: Coriolis
FINANCIAL RATIOS: NZ VS. DENMARK
The New Zealand food & beverage sector is under-capitalised relative to peers; as a result, it is less profitable
Select financial ratios of top five food & beverage businesses: New Zealand vs. Denmark
(NZ$m; FY09)
$22,997
$14,788 Firm #1
$5,741 $1,046 $2,334 Firm #1
$74 $249 $361 $21 $39
$252 $43 $21
$4,805 $922
PAGE 46 Note: Firms ranked by turnover; treat as directional due to differences in accounting practices, and business structures; 2 Danish firms are coop (1 meat, 1 dairy) so that can not be
used as an excuse; Source: various company annual reports (Fonterra, SFF, Alliance, Zespri, ANZCO, Carlsberg, Arla, Danish Crown, Danisco, Novozymes); Coriolis analysis
3. MARKETS
New Zealand food & beverages are sold to domestic retail and foodservice outlets and into export markets
Simplified model of the New Zealand food & beverage industry supply/value chain
(model; NZ$b; YE June 2011 or as available)
Value of NZ F&B
Aquaculture imports
PAGE 47 Source: Statistics NZ; MAF SONZAF; past Coriolis research; Coriolis estimates and analysis
OVERVIEW – THE SITUATION
New Zealand is in the middle of a fundamental transition from feeding Westerners to feeding the Asia-Pacific
region; this transition is driving rapid change in what is being produced and where it is being sold
Food & Beverages as a percent of New Zealand’s total export value Total F&B export value: New Zealand vs. peers
(%; 2010) (US$b; 2010) Note: uses US$
Germany $59
France $58
Netherlands $56
Spain $35
Italy $34
Belgium $34
United Kingdom $24
New Zealand $17
Denmark $17
Other products
46% Chile $11
Food &
Beverages Ireland $11
54% Austria $10
Norway $9
NZ exports 4x as
Sweden $7 much food as
Switzerland $7 Japan!
Portugal $5
Japan $4
Iceland $2
Israel $2
Finland $2
Export value of key products in 2010 vs. 15 year CAGR of export value vs. 15 year absolute growth in exports
(US$b; nominal; 1996v2010)
9% Biomedical
8%
7% Ships/other vehicles
Growth Plastics
Electrical equip
Overall
5%
CAGR of export 5.2%
value (96-10) 4% Wood & products
Ores
3% Tools & machinery
Aluminium
2%
Other
1%
0%
1%
2%
Wool
3%
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19
Size
Export value in 2010 in US$b
PAGE 50 Source: UN Comtrade database (custom job); Coriolis analysis
RANGE OF SECTORS
New Zealand food exports are spread across a range of product sectors; while all are achieving export value
growth, processed foods and beverages stand out as growth stars
New Zealand F&B export value by major segment New Zealand F&B export value by major segment 15 year
(US$b; 2010) (US$b; non-inflation adjusted; 1995 vs. 2010) CAGR
(95-10)
Other beverages $16.7 7%
$0.2 1%
$1.0 Beverages 17%
Wine $0.8
5% $1.5 Processed 12%
$0.3 Other 4%
Other foods Processed foods Whole milk powder $1.3 Produce 3%
$0.3 2% $1.5 9% $3.1 18%
Other produce $0.4 $1.0 Seafood 2%
3%
Apples $0.2 1%
$0.3 $0.1
$0.2
$0.8
Other meat $0.4
2% Cheese $1.0 $0.8
Lamb $1.9 12% $7.8 Dairy 9%
6%
$1.8
Other dairy
$1.1 7%
Meat Beef $1.4 8%
$2.1
$3.7b
22%
Total = US$16.7b 1995 2010
100%
Wine
67%
90% Processed/other F&B
80% Kiwifruit
Apples
54% 54% Other dairy
51% 70%
45%
44% 60% Milk powder
50%
34% Cheese
40% Butter
Seafood
30% Other meat
16%
20% Lamb
10% Beef
PAGE 52 Source: Statistics of New Zealand 1880, 1990, 1920; New Zealand Trade & Shipping 1940; New Zealand Details of Exports 1960; UN Comtrade SITC1 1980, 2000, 2009; Coriolis analysis
F&B EXPORT VALUE
Comparing export product mix by country highlights that New Zealand is overweighted to dairy and meat; peers
highlight processed foods and beverages as opportunity
Share of food & beverage export value by sector: New Zealand vs. identified climatic peers Comments/Notes
(% of US$; 2010 or latest available)
- This suggests that there may be more growth
Dairy Processed foods Beverages potential in beverages
Switzerland
United Kingdom - Chile, Spain, Uruguay, Netherlands, Austria &
Argentina use 2009 data
Austria
Italy
France
Portugal
Germany
Ireland
Belgium
Sweden
South Africa
Netherlands
Finland
Spain
Chile
Dairy
Denmark
Meat
Canada
United States Seafood
Australia Produce
New Zealand Grains
Argentina
Other
Iceland
Processed
Norway
Uruguay Beverages
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
PAGE 53 Source: UN Comtrade database; project RFP; Coriolis analysis
F&B EXPORT VALUE
Comparing New Zealand F&B exports by sector with peers we find peers achieving success across a wide range of
products
Total food & beverage export value: New Zealand vs. identified climatic peers Comments/Notes
(US$b; 2010 or latest available)
- This comparison with peers suggests it is
difficult to see major F&B export growth
$- $20.0 $40.0 $60.0 $80.0 $100.0 coming from anything other than processed
foods and beverages; we suggest a strong
United States
focus on these
Germany
France - Clearly our production mix is not fixed and can
Netherlands change over time (for example: sheep to wine
grapes in Marlborough)
Spain
Italy - Chile, Spain, Uruguay, Netherlands, Austria &
Belgium Argentina use 2009 data
Canada
United Kingdom
Australia
Argentina
New Zealand
Denmark
Chile
Dairy
Ireland
Norway Meat
Austria Seafood
Sweden Produce
Switzerland
Grains
South Africa
Portugal Other
Uruguay Processed
Iceland Beverages
Finland
Venezuela
2%
Other United Kingdom Europe & Russia
Europe
7% 5% 17%
North Africa 11%
Middle East UAE Other Russia
Central Asia 1% NA/ME/CA 1%
17% Saudi Arabia 6%
2%
USA
10% North America
SE Asia 13%
14%
Canada
2%
Mexico
1%
Australia
Taiwan
Asia 11%
3%
39%
South Korea Oceania
2% Hong Kong China Japan 13%
2% 11% 7% Pacific Islands
2%
Total = US$16.7b
New Zealand export value matrix: NZ export value per capita vs. GDP/capita vs. total NZ export value
(various; US$; 2009)
$70,000
$65,000 Switzerland
Rich and good
$60,000 Rich and could customers
sell more
$55,000
$50,000
United States UAE
$45,000 Belgium Australia
France
$40,000 Singapore
GDP/capita
(US$; 09) $35,000
Italy
Japan
United Kingdom
Spain
$30,000 Greece Hong Kong
Bahrain
$25,000 Czech Republic