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Top of the South untapped F&B export potential tops $19bn

15th April 2021 By Bridget O'Connell | bridget@foodticker.co.nz | @foodtickernz

Food and beverage producers at the Top of the South have the potential to tap into a further $19bn of international sales with new and existing products, according to a new report from Infometrics.

The economic consultancy analysed the global opportunity for eight major categories of export products – six of which were F&B-related – from the region that spanned the Nelson, Tasman and Marlborough districts.

It ranked the opportunity for each sector, identifying Te Tauihu’s major export product of wine as having the greatest global potential with $5.28bn of sales going begging according to the Food for Thought report.

It said the challenge for the industry to boost Nelson’s current $1.96bn of wine exports, was to optimise its export profile between bulk and bottled wine, and between established and relatively untapped markets.

For bottled wine – which it said presented a $4.8bn opportunity – it noted the the biggest opportunities were provided by the two largest markets: exports to the US could climb from $519m to over $1.4b, while exports to the UK could increase from $304m to more than $800m.

Less established markets with potential for significant export growth included China ($478m), Germany ($421m), Hong Kong ($273m), and Japan ($220m).

On bottled wine the UK, Germany and the US were said to offer significant scope for growth, with smaller opportunities available in other European Union (EU) members including Sweden, Belgium, Denmark, and the Netherlands.

Wine technology, such as the export of thermostats, founded out the total wine sector opportunity coming in at $539m.

The F&B sector with the second largest export opportunity was the catch-all category of ‘other food’, where Infometrics’ tallied up what kind of push could be made by big local producers including peanut butter, jam and frozen peas.

It concluded that there was an untapped global potential of close to $5bn for these food producers.

The region’s leading seafood and aquaculture sector was unsurprisingly also seen as a major opportunity. Te Tauihu accounts for 31% of NZ’s economic activity in the fishing and aquaculture and seafood processing industries, despite the area only making up 2.7% of the overall nationwide economy.

Te Tauihu’s current export levels of $981m were dwarfed by the international growth potential which Infometrics put at $3.2bn, with a focus on hoki, mussels and salmon as primed for a push.

Diving deeper into the shellfish opportunity, Infometrics said while there were restrictions to frozen and fresh exports, “mussel oil is an extremely high-value product, with exports currently dominated by the US and South Korea. Japan, Germany, and Hong Kong shape as the largest potential growth markets, dependent on precise consumer preferences and demand.”

Although the region was not as well know for meat and diary exports as other part of the country, these were also reckoned to have respectable global market opportunity at $3bn and $2bn respectively.

In respect of dairy the report focused on the exports of whole milk powder ($26m), skim milk powder ($6.8m), and ice cream ($4.4m) directly out of Nelson. It was icecream that was picked up for its potential here.

“European countries dominate the largest potential markets for ice cream exports, filling 15 of the top 20 spots for potential exports,” the report said.

“However, an effective import tariff of 17% is in place which, combined with transport costs, appears to be inhibiting the establishment of these export markets.

Outside the EU, there was scope for $30m of exports across several Muslim countries including Saudi Arabia, Malaysia, and Kuwait, Infometric said although noted the requirement for it to be halal.

The smallest opportunity of the eight sectors – but still coming in at a respectable $1bn – was allocated to the apple and kiwifruit sector.

Te Tauihu contributed 9% ($86m) of New Zealand’s apple exports in 2020 and 1.2% ($31m) of the country’s kiwifruit exports.

Given that New Zealand’s export markets for these fruits are reasonably well diversified, with countries across Europe, Asia, North America, and the Middle East all represented, the markets with the biggest export potential were also quite varied, according to the report.

European countries featured prominently on the list, with significant potential offered by Germany, the UK, Spain ($39m), and the Netherlands, while Russia was noted specifically for kwifruit.

Across the eight sectors, which included wood products and logs, a total export opportunity of $24bn was identified, although Infometrics cautioned this was simply a demand side analysis, and did not account for supply side constraints that would restrict growth or export capacity.

 

 


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