REGIONAL GROWTH OPPORTUNITIES

REGIONAL GROWTH OPPORTUNITIESIn Food & Beverage Processing Employment in New Zealand

FINAL REPORT; v1.00b; August 2019

FINAL REPORT

REGIONAL GROWTH OPPORTUNITIES

In Food & Beverage Processing Employment in New Zealand

August 2019

V1.00b

Cover Image: New Zealand Story; https://toolkit.nzstory.govt.nz/assets/77807

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This document was prepared by Coriolis Ltd. (Coriolis) for our client and is based on information from a wide range of public sources deemed to be reliable and interviews with industry participants. Analyses and projections represent Coriolis’s judgment, based on the data sources cited and are subject to the validity of the assumptions noted in this document. For purposes of the analysis in this document, Coriolis has relied upon and considered accurate and complete, and at the time of initial issuance of this document is not aware of any error in, data obtained from the sources cited but has not independently verified the completeness or accuracy of the data. All estimates and projections contained in this document are based on data obtained from the sources cited and involve elements of subjective judgment and analysis.

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This work is based on secondary market research, analysis of information available (e.g. Statistics NZ), and a range of interviews with industry participants and industry experts. Coriolis have not independently verified this information and make no representation or warranty, express or implied, that such information is accurate or complete. In

many cases regional data is incomplete or not available and therefore research includes significant modelling and estimates.

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3

This project is targeted at a specific audience with clear objectives

1. Provide clear guidance on opportunities to create regional employment in post-farmgate food & beverage processing industry, both within and beyond traditional activities

2. Provide fact based/data driven foundation analysis to the regions of New Zealand

3. Move beyond typical ‘aspirational, narrative-based’ approach to regional strategic thinking in regards to where to focus limited resources to achieve post-farmgate food & beverage growth

4. Benchmark relative performance to identify gaps

5. Provide inputs to various regional strategy formation initiatives (rather that proposing a strategy)

6. Do not duplicate previous research (trade data etc.) but add to existing findings

4Source: Coriolis analysis

Regional Government

Regional Economic Development Agencies

National Agencies

Potential Investors

Other Stakeholders

EXECUTIVE SUMMARYFOOD IS IMPORTANT

New Zealand is a temperate climate country the size of Italy, Japan or the United Kingdom, but with the population of Singapore. Many of the regions of New Zealand are themselves the size of small countries. The country has an abundance of natural resources spread across a small population. Much of New Zealand’s success to date in food has come from this simple fact.

From the 19th Century to today, the food and beverage industry has played an outsized role in the economy, the importance of which is difficult to overstate.

Food production uses almost half of New Zealand’s land and much of the surrounding ocean. Food accounts for 32% of New Zealand’s total manufacturing GDP. At $34b, food is the country’s major export industry generating two thirds (65%) of merchandise exports and close to half (46%) of total exports (both goods and services).

The core production (on-farms and processing) parts of the food industry directly support 219,000 jobs. When the wider food chain is taken into account – which includes food service, food wholesaling and food retailing – the industry employs close to half a million people, or one in five workers. These jobs are not concentrated in Auckland; they are spread all across the country. In regions outside Wellington and Auckland, this chain directly employs 20–40% of the working population, making it the core economic base for both small rural communities and the larger regional cities.

CHANGE IS REQUIRED

The New Zealand food production system has evolved over many years to be a highly efficient producer of a few major commodities, with growth based on increasing volumes, and relentless productivity improvements.

Today New Zealand’s pasture-based production system is being placed under pressure. Increasing dairy cow numbers are pushing up against local environmental limits. The methane emissions of New Zealand’s animals are a major contributor to the country’s total emissions footprint. The food industry must make significant changes in the coming years to reduce these impacts on the wider environment.

FARMING IS LOSING JOBS

Farming is under not only external pressures, but also internal ones. Farming is a dynamic industry undergoing a fundamental long-term shift to fewer, larger production units. Over the last two decades, New Zealand has seen a more than 30% fall in farm unit numbers. Total on-farm employment, including owner-operators, has seen a net loss of 12,300 jobs since 2000. On-farm jobs are down across most regions, other than Canterbury, Otago and the West Coast.

5

PROCESSING IS CREATING JOBS

At the same time, over the last two decades, the number of food processing firms has increased by 50% and more than 13,500 jobs have been created. These jobs are not just on the factory floor, but in a wide variety of roles such as marketing, sales, branding, package design, and new product development. This growth is occurring across all regions and most sectors.

REGIONAL NEW ZEALAND CAN CREATE MORE JOBS IN FOOD AND BEVERAGE PROCESSING

New Zealand has been missing out on processing jobs. New Zealand is the clear outlier when it comes to creating post-farmgate jobs from food. All peers create significantly more jobs per tonne of farm gate raw material than New Zealand. In fact, New Zealand food supports 5–10 times more jobs for others beyond the border than it currently does at home. A key reason for this is that our production and export system is configured to producing and exporting the ingredients which others then take and

manufacture into the products that consumers buy. One way to think about this is that the export of commodities is also the export of jobs (see diagram next page).

Peers suggest that by continuing to do more with raw ingredients, the regions of New Zealand can continue to create significant new post farm gate processing employment across multiple sectors.

This research finds New Zealand’s largest industry is not “a sunset sector” that has limited growth potential. Precisely the opposite is true. Food exports are growing, outperforming most other export sectors. Much of this growth is driven by value added products such as processed foods, wine and nutraceuticals. This growth can continue on the back of rising global demand.

The New Zealand industry is “de-commodifying”. The last 10 years has seen a significant “move up the value chain” through the development of a large and growing food processing sector. Processors are turning more and more of our abundant ingredients into finished consumer ready products, for

example milk powder into infant formula. These are products that are ready to go into the back door of supermarkets or restaurants.

To continue the “de-commodification” trend New Zealand needs to find five to ten new growth platforms. This research identifies many product categories that can contribute to this, ranging from advanced dairy based medical nutritionals to pet food.

WHAT IS NEEDED?

Realising this employment growth opportunity requires three specific sets of potential investors to embrace the future: (1) existing large firms at scale need to reinvest, (2) new large investors with scale and skills need to be attracted, and (3) new and emerging firms need to be nurtured.

The regions of New Zealand that focus their investment of scarce time and resources in these identified growth sectors will be rewarded.

6

New Zealand is missing out on food manufacturing jobs

7

FIGURE 1: FLOW OF NEW ZEALAND MILK POWDER FROM THE FAMER TO CONSUMERSimplified model

Photo credit: public domain; Source: Coriolis

Baked goods

Dairy products

Infant formula

Specialised nutritionals

Proc. meat/analogs

Beverages

Nutrition bars

Condiments

Confectionery

Dessert-type snacks

Pet foods

Savoury items

FARMERS(milk)

DAIRY PROCESSORS(milk powder)

FOOD MANUFACTURERS(processed foods)

RETAILERS(products)

CONSUMERS(food)

POTENTIAL NEW JOBS

DAIRY PROCESSING

New Zealand can create more dairy processing jobs by producing more complex products, rather than simple ingredients. Opportunities identified for growth include: (1) Medical Infant Formula, (2) Dairy-based Nutritionals, (3) Non-Cow dairy, and (4) Specialty Cheese.

MEAT PROCESSING

While meat processing is currently a major employer, it is unclear whether the sector can create significant new jobs going forward. Opportunities identified for growth include: (1) Meat-Based Snacks, (2) Branded Packaged Consumer-Ready Products, and (3) Consumer-Ready Convenience Meals.

POULTRY PROCESSING

Poultry processing can continue to create employment growth for New Zealand. Opportunities identified for growth include: (1) Further Domestic Consumption, (2) Targeting Key Export Markets, (3) Developing Value Added Products, and (4) Alternative Poultry Species.

SEAFOOD

Seafood is unlikely to create new jobs without new aquaculture coming into production. Opportunities identified for growth include: (1) Salmon, and (2) Region-Suitable Aquaculture.

PRODUCE PROCESSING/WHOLESALING

Produce wholesaling and processing is unlikely to create new jobs without significant new land coming into production. Opportunities identified for growth include: (1) Nuts, (2) Apples, (3) Kiwifruit, (4) Avocados, (5) Emerging Fruit, (6) Under Cover Crops, (7) Root Crops, and (8) Processing Vegetables.

GRAIN PROCESSING/WHOLESALING

Grain processing & wholesaling is unlikely to create significant new jobs going forward without developing new products. Opportunities identified for growth include: (1) High-Dairy Baked, (2) Oat “Milk,” (3) Seeds, and (4) Hemp (for food and beverage usage).

PROCESSED FOODS

New Zealand can continue to grow employment in processed foods production. Opportunities identified for growth include: (1) Nutraceuticals, (2) Pet Food, (3) Confectionery/ Snacking, and (4) New & Innovative Foods.

WINE

Creating employment growth in New Zealand wine production will require regions outside Marlborough to grow. Opportunities identified for growth include: (1) Sparkling Wine, (2) “Cognac”, and (3) Non-Marlborough Reds.

OTHER BEVERAGES

New Zealand can continue to grow employment in non-wine beverages. Opportunities identified for growth include: (1) Alcoholic Spirits, (2) Water, (3) Cider & Similar, and (4) Premium Non-Alcoholic.

8

NEW ZEALAND REGIONS2019

This analysis is conducted at the level of New Zealand’s fifteen* regions

179,100

1,695,900

468,800

305,700

49,100

165,900

119,600

243,700

521,500

104000

46,600

32,600

624,000

229,200

99,100

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

9

POPULATION BY REGION2018

*Nelson and Tasman data combined in the research; See Appendix for Regional Snapshots; Source: MBIE Regional database, Coriolis analysis

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke’s BayTaranakiManawatu-Wanganui

Wellington

West Coast

Nelson*

Canterbury

OtagoSouthland

MarlboroughTasman*

North Island3.8m77%

South Island1.1m23%

New Zealand4.9m

As a reminder, New Zealand is not a small country; many regions are the size of major European countries or American states

10

TOTAL AREA: NEW ZEALAND VS. SELECT TEMPERATE DEVELOPED PEER COUNTRIESkm2; 2018

Source: Wikipedia; CIA World Fact Book; Coriolis analysis

14 6

26

12 8

14 7

22

8 10 12

23

45

32

34

122

19

13

23

24

25

62

31

37

41

43

70

49

3

NZ USA Europe

NorthlandAuckand

Waikato

Bay of PlentyGisborne

Hawke’s BayTaranaki

Manawatu-Wanganui

WellingtonNelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

Belgium

Netherlands

Switzerland

Denmark

Ireland

Slovakia

Luxembourg

New York

New JerseyConnecticut

New Hampshire

Vermont

Maryland

West Virginia

275289

274

AGENDA

A. THE FOOD & BEVERAGE INDUSTRY IS IMPORTANT TO NEW ZEALAND

B. FOOD PROCESSING IS GROWING & CREATING JOBS POST FARMGATE

C. SECTORS VARY IN LIKELY JOB CREATION IN PROCESSING GOING FORWARD

11

Defined as 200 nautical miles from coastline

Food production uses almost half of New Zealand’s land and much of its oceans

12

NEW ZEALAND LAND USEkm2; 000; 2010

NZ ECONOMIC ZONE*Area; depth; 2018

*EEZ; Note: a nautical mile is 1,852 metres; Source: Statistics NZ; Department of Conservation; Sealord; Coriolis analysis

Farming126

47%

Forestry (private)16 6%

National parks & reserves71 26%

Other DOC14 5%

Other41 16%

TOTAL = 268,000 km2

Other government landsNon-Ag Tribal Lands

Lifestyle blocksCities and towns

Idle landsOther

DAIRY MEAT POULTRY SEAFOOD PRODUCE ARABLE PROCESSED WINE APPENDICESIMPORTANT GROWINGVARIEDPOTENTIAL OTHER BEV.

The wider food chain directly employs one in five working people in the country

Doing something other than working

13%

F&B Chain10%

Employed in other sectors

42%

Under 1520%

Over 6515% Primary

25%

F&B Mnfg.19%F&B

Whls.7%

F&B Retailing

18%

13

NZ POPULATION BY EMPLOYMENTPeople; m; 2017

FOOD CHAIN EMPLOYMENT BY SECTORPeople; %; 2017

Whls – wholesaling; Mnfg – manufacturing; Source: Statistics NZ; Coriolis analysis and classifications

… or one in five of working population

Total = 4.8m Total = 493,000

Foodservice31%

NOTE: Tight definition; excludes all inputs and support services; likely

closer to 1/3 including those


In regions outside of Wellington & Auckland, the wider food chain directly employs 20-40% of the working population

0%

5%

10%

15%

20%

25%

30%

35%

40%

Wellington

Auckland

Bay of Plenty

Canterbury

Otago

Mana-W

anga

Northland

Waikato

Nelson/Tasm

an

West C

oast

Hawke's Bay

Gisborne

Taranaki

Marlborough

Southland

14

PERCENT OF REGIONAL EMPLOYMENT IN THE FOOD CHAIN% of employees; 2018

Source: Statistics NZ; Coriolis analysis and classifications

Food Retail & Foodservice

Primary

Processing

Wholesaling

NOTE: Tight definition; excludes all inputs and support services; likely

closer to 1/3 including those


Food & beverage is the major New Zealand export industry, accounting for almost half of total goods and services exports

15

TOTAL NEW ZEALAND EXPORT OF GOODS AND SERVICES BY CATEGORYNZ$; b; 2017

Source: SNZ; Coriolis analysis and classifications

TravelWood & WoolFood & Beverage Other Goods ServicesTop Secret Oil & Minerals

$5.1$9.0$33.6

Metals$1.9

Oil$0.9Food & Beverage

$33.6

Other services$0.8

$16.6

Minerals$0.1

$1.0$1.7

Wood & products$6.0

$6.5

Animal biproducts$0.5

Chemicals$1.0

Travel $13.8

Transportation $2.7

Communications services $0.1

Plastics/Rubbers$0.5

Other$0.4

Machinery / Electrical$2.1

Medical Devices, other$0.7

Vehicles$0.3

Confidential/other

$1.7

Skins, Leather, & Furs$0.4

Royalties and licence fees $0.4

Business services$1.9

Media$0.3

Stone/Glass$0.7

Financial services $0.7

Apparel$0.1

Textiles$0.2

Wool$0.5

Computer and information services $0.7


The food & beverage industry achieves a large trade surplus, while most other sectors are underperforming or in deficit

16

NET TRADE POSITION IN TOTAL NEW ZEALAND TRADE (EXPORTS-IMPORTS) NZ$; b; 2017


-$15

-$10

-$5

$0

$5

$10

$15

$20

$25

$30

Food & Beverage

Travel

Wood &

Products

Confidential/Other

Wool

Animal Biproducts

Media

Financial Services

Skins, Leather, & Furs

Comm

unications Services

Minerals

Computer and Info Services

Stone/Glass

Textiles

Royalties and Licence Fees

Metals

Other Services

Medical Devices, O

ther

Business Services

Transportation

Apparel

Other

Plastics/Rubbers

Chemicals

Oil

Vehicles

Machinery / Electrical

TRADE DEFICIT

TRADESURPLUS

NET DEFICIT-$347m


Food & beverage is growing exports strongly, where most other sectors are underperforming or going backwards

17

10 YEAR NET CHANGE IN TOTAL NEW ZEALAND EXPORTS NZ$; b; 2007-2017


-$3

-$1

$1

$3

$5

$7

$9

$11

$13

$15

Food & Beverage

Travel

Wood &

Products

Confidential/Other

Business Services

Financial Services

Computer and Info Services

Transportation

Stone/Glass

Medical Devices, O

ther

Royalties and Licence Fees

Media

Animal Biproducts

Chemicals

Other Services

Plastics/Rubbers

Minerals

Other

Textiles

Apparel

Skins, Leather, & Furs

Vehicles

Comm

services

Wool

Machinery / Electrical

Metals

Oil

EXPORTSSHRINKING

EXPORTSGROWING


New Zealand has the highest ‘revealed comparative advantage’ in food & beverage of any major exporter

18

REVEALED COMPARATIVE ADVANTAGE IN FOOD & BEVERAGERCI index; top 54 exporting countries; 2016

Source: UN Comtrade; SNZ; Wikipedia; Coriolis analysis and classifications

0

1

2

3

4

5

6

7

8

New

Zealand

Arg

entina

Ukraine

Brazil

Chile

Peru

Denm

ark

Indonesia

Colom

bia

Netherla

nds

Spain

Australia

Thailand

Vietna

m

France

Poland

India

South Africa

Portugal

Turkey

Ireland

Ma

laysia

Belgium

Norw

ay

USA

Italy

Roma

nia

Hunga

ry

Philippines

Austria

Canad

a

Mexico

Swed

en

United

Kingdom

Germ

any

Czech Rep

ublic

Russia

Kaza

khstan

Slovakia

Israel

China

Switzerla

nd

Finland

Singap

ore

UA

E

Saudi Arab

ia

Taiwan

Hong

Kong SAR

South Korea

Japan

Kuwa

it

Algeria

Qa

tar

Iraq


AGENDA

1. THE FOOD & BEVERAGE INDUSTRY IS IMPORTANT TO NEW ZEALAND

2. FOOD PROCESSING IS GROWING & CREATING JOBS POST FARMGATE

3. SECTORS VARY IN LIKELY JOB CREATION IN PROCESSING GOING FORWARD

19

The core New Zealand food & beverage industry (on-farm & processing) has a total headcount of about 219,000

On-Farm135,500

62% Processing83,800 38%

20

F&B JOBS BY LOCATION*Headcount; 2018

F&B JOBS BY SECTOR*Headcount; 2018

Note: Actual total will be larger as this data does not include contract labour (e.g. picking gangs) and other direct labour services to farming; *Including assumed owner-operators (i.e. non-PAYE); does not include most wholesaling (only seafood and F&V); Source: Statistics NZ; Coriolis estimates, modelling and analysis

Total = ~219,000

Dairy53,500 24%

Red Meat & Pork71,400 33%

Poultry Meat5,100 2%Seafood

10,100 5%

F&V37,200 17%

Arable/ Grain-Based12,800

6%

Other foods4,700 2%

Processed Foods12,000

5%

Wine8,800 4%

Other Beverages3,700 2%

Total = 219,000TOTALS ROUNDED


On-farm currently accounts for about 60% of jobs; post farmgate processing 40%

21

F&B JOBS ON-FARM*Headcount; 2018

F&B JOBS IN PROCESSING**Headcount; 2018

*Including assumed owner-operators (i.e. non-PAYE); **Some sectors include wholesaling; Note: Other foods (honey & eggs), when processed, are not broken out by Statistics NZ and are therefore included in our defined ‘processed foods’; Source: Statistics NZ; Coriolis estimates, modelling and analysis

Dairy13,000 16%


Poultry Meat3,600 4%

Seafood5,100 6%

F&V9,100 11%

Arable/ Grain-Based6,600 8%

Processed Foods12,000 14%

Wine3,900 5%

Other Beverages3,700 4%

Dairy40,500 30%


Poultry Meat1,500 1%

Seafood5,000 4%

F&V28,100 21%

Arable/Grain-Based6,200 5%

Other foods4,700 3%

Wine4,800 3%

Total = 135,500~60%

Total = 83,800~40%

Total = ~219,000TOTALS ROUNDED

… but 86,220 including all non-poultry livestock (including dairy)


Northland1,873 2%

Auckland19,790 24%

Waikato9,115 11%

Bay of Plenty3,452 4%Gisborne

1,321 2%

Hawke's Bay5,902 7%

Taranaki4,889 6%

Mana-Wanga5,207 6%Wellington

3,248 4%

Tasman/Nelson2,463 3%

Marlborough2,537 3%

West Coast1,049 1%

Canterbury13,220 16%

Otago4,935 6%

Southland4,749 6%

Both on-farm and processing jobs are spread across the country

22

F&B JOBS ON-FARM*Headcount; 2018

F&B JOBS IN PROCESSING**Headcount; 2018

Note: Area Outside = at sea; *Including assumed owner-operators (i.e. non-PAYE); **Some sectors include wholesaling; Source: Statistics NZ; Coriolis estimates, modelling and analysis

Northland7,984 6%

Auckland6,923 5%

Waikato22,484 17%

Bay of Plenty8,876 7%

Gisborne3,744 3%

Hawke's Bay12,284

9%Taranaki6,606 5%

Mana-Wanga11,221

8%Wellington3,880 3%

Tasman/Nelson6,851 5%

Marlborough3,629 3%

West Coast1,701 1%

Canterbury19,826 15%

Otago10,223

8%

Southland9,158 7%

Area Outside

88 0%

Total = 135,500~60%

Total = 83,700~40%

Total = 218,700

35%40%

25%

40%

35%

25%

TOTALS ROUNDED


On-farm employment is falling while processing employment is growing; NZ is adding more jobs (or value) beyond the farm

-

30,000

60,000

90,000

120,000

150,000

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

23

F&B JOBS ON-FARM*Headcount; 2000-2018

F&B JOBS IN PROCESSING**Headcount; 2000-2018

*Including assumed owner-operators (i.e. non-PAYE); **Some sectors include wholesaling; Note: Other foods (honey & eggs), when processed, are not broken out by Statistics NZ and are therefore included in our defined ‘processed foods’; Source: Statistics NZ; Coriolis estimates, modelling and analysis

-

20,000

40,000

60,000

80,000

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8


However, regions vary in their performance in post-farmgate food & beverage processing job creation

Nor

thla

nd

Auc

klan

d

Wai

kato

Bay

of P

lent

y

Gis

born

e

Haw

ke’s

Bay

Tara

naki

Man

awat

u-W

anga

nui

Wel

lingt

on

Nel

son/

Ta

sman

Mar

lbor

ough

Wes

t Coa

st

Can

terb

ury

Ota

go

Sout

hlan

d

TOA

L N

Z

Dairy -80 1,220 1,450 -120 45 100 -100 340 -30 -64 -61 360 1,460 0 210 4,730

Red Meat & Pork

-155 570 360 -281 264 -445 315 840 250 -57 -220 99 300 -318 -300 1,222

Poultry Meat 0 590 560 -30 0 0 370 3 -85 -3 0 0 290 -31 -85 1,579

Seafood 3 210 -51 100 -27 45 -40 -48 -117 -1,062 -17 70 -485 -242 -115 -1,776

Produce 64 880 117 370 35 -410 9 -80 110 93 -72 -12 -30 -228 -18 828

Grain-Based -141 555 -113 -31 -6 -76 -56 -102 -421 -8 -15 -3 245 27 -97 -242

Processed Foods

187 1,080 1,235 513 -12 283 83 359 434 177 83 9 25 81 -8 4,529

Wine 35 130 -21 20 20 280 -6 3 40 45 700 0 140 215 3 1,604

Other Beverages

0 490 107 -60 18 109 6 -21 216 106 7 -13 -60 86 12 1,003

TOTAL -87 5,725 3,644 481 337 -114 581 1,294 397 -773 405 510 1,885 -410 -398 13,477

PROCESSING JOBS 18 YEAR CHANGE BY REGIONAbsolute change; 2000 vs. 2018

Source: Statistics NZ; DairyNZ; MAF/MPI; Coriolis analysis and estimates24

See Appendix for Details


New Zealand has a large and growing food processing sector that is creating new firms

25

# OF PROCESSING UNITS BY REGIONGeographic units; 2000 vs 2018

# OF PROCESSING UNITS BY SECTORGeographic units; 2000 vs 2018

Source: Statistics NZ; Coriolis estimates, modelling and analysis

Northland

Auckland

18y ABS

Southland

Canterbury

2000

Otago

Gisborne

Marlborough

West Coast

2018

Hawke's Bay

Taranaki

Waikato

Tasman/Nelson

Wellington

Bay of Plenty

Mana-Wanga+13+33

+87

+35

+5

2,413

+113

+85

+9

+103

3,549

+87

+7

128

+102

18058

123

145

226

60

73

277

122

155175

190

277

116

+35

1,062

86

662

173

31

36

356

109

469

87

213

81 90

+22

+400

151

51

Wine

2000 2018

18y ABS

Seafood

Processed

Other Beverages

Poultry

F&V

Red Meat & Pork

Grain-Based

Dairy

300

47

35

216

346

3,549

108

2,413

328

+227

-9

+502

496

379

998

465

188

403

438

146

326

373

+108

+28

-12

-20

+62

+250

370

~+50%


38

18 1510 7 5 3 2 2

38

1815

107

53 2 2

A B C D E F G H I

38

18 1510 7 5 3 2 2

7

-1

28

-1

28

112 18

8

A B C D E F G H I

Continued growth will require some sectors to grow much larger, as other sectors have growth constraints

26

MODEL 1: EVERYTHING DOUBLES MODEL 2: SOME GROW/OTHER NO

Source: Coriolis

100

+100

100

+100

- Simple story: “Rising tide lifts all ships”

- Assumes all sectors can double in the timeframe

- Often how it is “spun” politically

- Unlikely in reality

- More complex story: “The Good, the Bad and the Ugly”

- Assumes some sectors cannot grow significantly

- Other sectors will need to grow 5x or 10x to compensate

- Peer group regions suggest this is the likely outcome


Numerous product categories have been identified that can contribute to this growth

DAIRY RED MEAT POULTRY SEAFOOD F&V

Advanced/Medical Infant Formula

Meat-Based Snacks Further Domestic Consumption

Atlantic Salmon Under Cover/Glasshouse

Root Crops

Processing VegetablesDairy-Based Nutritionals

Target Key Export Markets

Branded, Packaged Consumer Case Ready Nuts

Region Suitable Aquaculture

ApplesNon-Cow Dairy Develop Value Added Products KiwifruitConsumer-Ready

Convenience Meals AvocadosSpecialty Cheese Alternative Poultry Species Emerging Fruit

ARABLE/GRAIN OTHER FOODS PROCESSED FOODS WINE OTHER BEVERAGES

High Dairy Baked Honey Nutraceuticals Sparkling Wine Alcoholic Spirits

Oat ‘Milk’ Pet Food Water‘Cognac’Seeds Eggs Confectionery/Snacking Cider & Similar

Non-Marlborough RedsHemp (F&B usage) New & Innovative Foods Premium Non-Alcoholic

27

IDENTIFIED PRODUCT CATEGORIES THAT CAN CONTRIBUTE TO GROWTHModel; 2019

Source: Coriolis analysis


Realising this growth opportunity requires three specific sets of potential investors

28Source: Coriolis analysis

EXISTING LARGE FIRMS

AT SCALE

NEW LARGE INVESTORS WITH SCALE AND SKILLS

NEW AND EMERGING

FIRMS

REINVESTMENT ATTRACTION NURTURING

- Remove barriers to investment

- Ensure available capital is reinvested in New Zealand (not elsewhere)

- Sell New Zealand; make the case for investment in F&B here

- Identify the right investors (rather than ‘waiting for the phone to ring’)

- Focus on firms able to add value to New Zealand volume

- Sell New Zealand; make the case for investment in F&B here

- Encourage both existing small firms and new start-ups

- Focus effort on scaling small and medium firms into large, globally competitive firms at scale (currently could do more here)


AGENDA

1. THE FOOD & BEVERAGE INDUSTRY IS IMPORTANT TO NEW ZEALAND

2. FOOD PROCESSING IS GROWING & CREATING JOBS POST FARMGATE

3. SECTORS VARY IN LIKELY JOB CREATION IN PROCESSING GOING FORWARD

29

Sectors vary in likely job creation in processing going forward

1. New Zealand can create more dairy processing jobs by producing more complex products, rather than simple ingredients

2. While meat processing is currently a major employer, it is unclear whether the sector can create significant new jobs going forward

3. Poultry processing can continue to create employment growth for New Zealand

4. Seafood is unlikely to create new jobs without new aquaculture coming into production

5. Produce wholesaling and processing is unlikely to create new jobs without significant new land coming into production

6. Grain processing & wholesaling is unlikely to create significant new jobs going forward without developing new products

7. New Zealand can continue to grow employment in processed foods production

8. Creating employment growth in New Zealand wine production will require regions outside Marlborough to grow

9. New Zealand can continue to grow employment in non-wine beverages

30


1. New Zealand can create more dairy processing jobs by producing more complex products, rather than simple ingredients - Dairy processing in New Zealand is creating jobs and jobs are spread across regions

- Regions vary significantly in terms of how many regional dairy processing jobs they create from regional milk

- Only three regions (Auckland, West Coast & Canterbury) have created more processing jobs from their milk over the last decade

- Looking beyond New Zealand shows most peers create more jobs from their milk and this confirms more jobs can be created

- Significant new dairy processing jobs would be created if New Zealand could match the performance of global peers

- Four broad standout opportunities exist to drive growth in the dairy processing industry

31


Dairy processing in New Zealand is creating jobs and and jobs are spread across regions

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

200

02

001

200

22

003

200

42

005

200

62

007

200

82

009

201

02

011

201

22

013

201

42

015

201

62

017

201

8

Northland 560

Auckland 2,150

Waikato 3,200

Bay of Plenty310

Gisborne 45

Hawke's Bay100

Taranaki 1,800 Manawatu-

Wanganui 800

Wellington 90

Tasman 126

Marlborough 9

West Coast 510

Canterbury2,350

Otago 270 Southland 630

32

DAIRY PROCESSING EMPLOYMENTHeadcount; 2000-2018

DAIRY PROCESSING JOBS BY REGION Headcount; 2018

Source: Statistics NZ; Coriolis analysis

TOTAL = 12,950 dairy processing employees


Regions vary significantly in terms of how many regional dairy processing jobs they create from regional milk

33

MEKKO: MILK PRODUCED VS DAIRY PROCESSING EMPLOYMENT PER BIL LITRE*Bil l; employment per b litre of regional milk; 2018

*Not adjusted for inter-regional transfer; Significant volumes of milk will move between regions (e.g. Gisborne to Hawke’s Bay, Waikato to Auckland); Source: Statistics NZ; DairyNZ; Coriolis analysis

Bay of Plenty

Marlborough

Gisborne

Auckland

Nelson/Tasm

an

Otago

Haw

ke's Bay

Wellington

Northland

Waikato

Mana-W

anga

West C

oast

Canterbury

Southland

Taranaki

986

124

2,429

5,302

601

229

515562607

228

843944

531

238 146

Proportional to total regional milk volume; 2018

Average employees

per bil l2018

Auckland creates a lot of employment per billion litre of milk produced in the region

Bay of Plenty does not create a lot of employment per billion litre of milk produced in the

region

Therefore area is proportional to total industry employment by region

[ (l) X (emp/l) = emp ]

National Average625 employees

/b l milk


Only three regions (Auckland, West Coast & Canterbury) have created more processing jobs from their milk over the last decade

2,617

451

382

492

543

476

98

587

262

205

310

926

319

2,544

1,105

Auckland

West Coast

Canterbury

Northland

Nelson/Tasman

Hawke's Bay

Marlborough

Waikato

Southland

Wellington

Bay of Plenty

Mana-Wanga

Otago

Gisborne

Taranaki

34

JOBS/BIL L IN 2008Headcount/bil l; 2008

10Y CHANGE JOBS/BIL LHeadcount/bil l; 08vs18

Source: Statistics NZ; DairyNZ; Coriolis analysis

JOBS/BIL L IN 2018Headcount/bil l; 2018

5,302

944

531

562

601

515

124

607

238

146

228

843

229

2,429

986

Auckland

West Coast

Canterbury

Northland

Nelson/Tasman

Hawke's Bay

Marlborough

Waikato

Southland

Wellington

Bay of Plenty

Mana-Wanga

Otago

Gisborne

Taranaki

2,685

494

149

69

57

38

26

20

(25)

(59)

(82)

(83)

(89)

(115)

(119)

Auckland

West Coast

Canterbury

Northland

Nelson/Tasman

Hawke's Bay

Marlborough

Waikato

Southland

Wellington

Bay of Plenty

Mana-Wanga

Otago

Gisborne

Taranaki

DESTROYINGJOBS

SOMEGROWTH

SOLIDGROWTH


Looking beyond New Zealand shows most peers create more jobs from their milk and this confirms more jobs can be created

3,923 3,737 3,676

2,820 2,657

2,473 2,262 2,254

1,962 1,802 1,730 1,697

1,521 1,408 1,367 1,205 1,099 1,023 1,016 1,007 999

625 542 405

Italy

Spain

Switzerla

nd

Ca

nada

Estonia

France

Sweden

Finland

United

King

dom

Australia

Belgium

Wisconsin

Austria

Victoria

Germ

any

Tasm

ania

Netherla

nds

Ireland

Colorad

o

Arizona

Ca

lifornia

New

Zealand

Idaho

New

Mexico

35

JOBS CREATED FROM MILK: NEW ZEALAND VS PEERSHeadcount/bil l or kg; 2018 or as available

Source: Statistics NZ; DairyNZ; EuroStat; UN FAO; Statistics Canada; US BLS; USDA NASS; Coriolis analysis

NZ national average625 employees

/b l milk

HOW TO READ: Australia creates 1,802 dairy processing jobs per

billion litres of milk…

HOW TO READ: New Zealand creates 625 dairy processing jobs

per billion litres of milk…


Significant new dairy processing jobs would be created if New Zealand could match the performance of global peers

36

HYPOTHETICAL NEW DAIRY PROCESSING JOBS IN NEW ZEALANDModel; headcount; 2018 vs model

Source: Statistics NZ; DairyNZ; EuroStat; UN FAO; Statistics Canada; US BLS; Coriolis analysis

12,950

38,306 33,924 33,756

27,704 24,399 22,907 22,214

18,565 16,233 15,388

12,018 9,825 8,252 8,109 7,911 7,751

-

France

Sweden

Finland

United

Kingdom

Australia

Belgium

Wisconsin

Austria

Victoria

Germ

any

Tasm

ania

Netherla

nds

Ireland

Colorad

o

Arizona

Ca

lifornia

New

Zealand

Current NZ dairy processing employment

How many new dairy processing jobs would be created if New Zealand could create post-farmgate employment from milk like these countries/regions?

HOW TO READ:If New Zealand produced more

complex dairy products like Ireland and the Netherlands, 8,000-10,000

new jobs would be created

+


Four broad standout opportunities exist to drive growth in the dairy processing industry

Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis analysis and estimates

DAIRY-BASED NUTRITIONALS

NON-COW DAIRY(GOAT & SHEEP)

ADVANCED/MEDICAL INFANT FORMULA

321

37

- High value dairy segment -US$9b global import value (2016)

- Export growth platform

- Leverages NZ capabilities and reputation

- NZ achieves a premium in the global market

- Growth in protein based nutritionals

- Aging population requiring specialty diets


- Growth in alternative dairy categories

- Multiple added value categories

PROCESSED/PIZZACHEESE

4

- Leverages NZ capabilities in cheese

- Attract new investment to a growth segment in Asia


2. While meat processing is currently a major employer, it is unclear whether the sector can create significant new jobs going forward- Meat processing supports a large number of jobs across all regions of the country, but employment is not

growing

- About half of regions are creating significant new meat processing employment, the other half are shrinking

- It is not immediately obvious that there is significant processing employment per tonne upside (increased automation and robotics)

- Three broad standout opportunities exist to drive growth in the meat processing industry

38


Northland710

Auckland1,720

Waikato2,490

Bay of Plenty569

Gisborne270 Hawke's Bay

2,715

Taranaki1,985 Mana-Wanga

3,170 Wellington1,220

Nelson/Tasman276

Marlborough190

West Coast312

Canterbury4,420

Otago3,062

Southland3,600

Meat processing supports a large number of jobs across all regions of the country, but employment is not growing

-

5,000

10,000

15,000

20,000

25,000

30,000

200

02

001

200

22

003

200

42

005

200

62

007

200

82

009

201

02

011

201

22

013

201

42

015

201

62

017

201

8

39

MEAT PROCESSING EMPLOYMENTHeadcount; 2000-2018

MEAT PROCESSING JOBS BY REGION Headcount; 2018


TOTAL = 26,709 meat processing employees


About half of regions are creating significant new meat processing employment, the other half are shrinking

865

1,150

2,130

850

6

3,160

1,670

2,330

970

333

410

213

4,120

3,380

3,900

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

40

EMPLOYMENT 2000Headcount; 2000

18Y CAGR% head; 00vs18

Source: Statistics NZ; UN FAO; MAF/MPI; Coriolis analysis


710

1,720

2,490

569

270

2,715

1,985

3,170

1,220

276

190

312

4,420

3,062

3,600

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

-1.1%

2.3%

0.9%

-2.2%

-0.8%

1.0%

1.7%

1.3%

-1.0%

-4.2%

2.1%

0.4%

-0.5%

-0.4%

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

23.6%


It is not immediately obvious that there is significant processing employment per tonne upside (increased automation and robotics)

-

5

10

15

20

25

30

35

Ohio

Pennsylvania

Kentucky

Sweden

Germ

any

Greece

Virginia

France

Portugal

United

Kingdom

Texas

New

Zealand

Austria

Italy

Illinois

Michig

an

Ireland

Spain

Australia

Wa

shington

Ca

nada

Colorad

o

Nebraska

South Da

kota

Kansas

Utah

Missouri

Belgium

Okla

homa

Denm

ark

Iowa

Minnesota

Indiana

Netherla

nds

41

PROCESSING JOBS PER THOUSAND TONNES: NZ VS PEERSHeadcount/1,000t; 2018 or as available

* Source: Statistics NZ; Eurostat; UN FAO; US DOL; USDA NASS; Coriolis analysis and estimates

Likely either (1) exporting jobs to neighbouring regions or (2) highly automated, low complexity

products and ‘simple’ species (e.g. pigs)

Likely either (1) more difficult to automate or (2) producing higher

complexity products (e.g. case ready rather than carcass/primal)

NZ result will be partly a result of the low automation/high labour/low yield nature of sheep (e.g. relative to pigs


Three broad standout opportunities exist to drive growth in the meat processing industry

Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis estimates

BRANDED PACKAGED CONSUMER READY

PRODUCTS

CONSUMER READY CONVENIENCE MEALSMEAT-BASED SNACKS

321

42

- High value product $80-$100/kg


- Growing global demand- Growth in snacking and high

protein snacking

- Brand and story develops loyalty

- Leverages NZ reputation- Premium consumers in key

export markets


- Growth in convenience categories

- Multiple added value categories

Processed Foods adjacency


3. Poultry processing can continue to create employment growth for New Zealand- Poultry processing in New Zealand is creating jobs, but jobs are currently located primarily in four regions

- Only these four key regions – Auckland, Waikato, Taranaki and Canterbury – are creating significant new processing employment

- There appears to be potential to create more processing jobs from existing volumes

- New Zealand poultry meat production can continue to grow

- Future employment growth will either come from (1) existing regions getting bigger or (2) a new region emerging

- Four broad opportunities exist to drive growth in the poultry industry

43


Poultry processing in New Zealand is creating jobs, but jobs are currently located primarily in four regions

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

200

02

001

200

22

003

200

42

005

200

62

007

200

82

009

201

02

011

201

22

013

201

42

015

201

62

017

201

8

Auckland1,100

Waikato1,050

Taranaki 670

Mana-Wanga21

Wellington 25 Canterbury

760

Otago 9

44

POULTRY PROCESSING EMPLOYMENTHeadcount; 2000-2018

POULTRY PROCESSING JOBS BY REGION Headcount; 2018


Employed inPoultryProcessing

Employed in other parts of the business (e.g. feed milling, farms)

TOTAL at firm level

TOTAL = 3,635 poultry processing employees

CAGR(00-18)

3%


Only these four key regions – Auckland, Waikato, Taranaki and Canterbury – are creating significant new processing employment

510

490

300

470

18

-

-

-

-

-

3

30

40

110

85

Auckland

Waikato

Taranaki

Canterbury

Mana-Wanga

Northland

Gisborne

Hawke's Bay

Marlborough

West Coast

Nelson/Tasman

Bay of Plenty

Otago

Wellington

Southland

45


15Y CHANGEHeadcount; 03vs18



1,100

1,050

670

760

21

-

-

-

-

-

-

-

9

25

-

Auckland

Waikato

Taranaki

Canterbury

Mana-Wanga

Northland

Gisborne

Hawke's Bay

Marlborough

West Coast

Nelson/Tasman

Bay of Plenty

Otago

Wellington

Southland

590

560

370

290

3

-

-

-

-

-

(3)

(30)

(31)

(85)

(85)

Auckland

Waikato

Taranaki

Canterbury

Mana-Wanga

Northland

Gisborne

Hawke's Bay

Marlborough

West Coast

Nelson/Tasman

Bay of Plenty

Otago

Wellington

Southland SHRINKING

LOW/NO

STRONG


There appears to be potential to create more processing jobs from existing volumes

-

5

10

15

20

25

30

OhioVirginiaIndianaGeorgiaArkansasTexasCzechHungaryMissouriKentuckyIrelandNewZealand

FranceAustraliaSwedenUnitedKingdom

46

PROCESSING JOBS PER THOUSAND TONNES: NZ VS PEERSHeadcount/1,000t; 2018 or as available

*As an example, compare the processed chicken range of Tyson (US) with Inghams (NZ); Source: Statistics NZ; Eurostat; UN FAO; US DOL; USDA NASS; Coriolis analysis and estimates

Likely flowing into further processing into ready meals

Relatively high efficiency but low complexity processing

Likely being processed into higher complexity products*


New Zealand poultry meat production can continue to grow

-

10

20

30

40

50

60

196

11

964

196

71

970

197

31

976

197

91

982

198

51

988

199

11

994

199

72

000

200

32

006

200

92

012

201

5

4,092

586

392

333

68

55

United States

United Kingdom

Canada

Ireland

New Zealand

Australia

47

POULTRY CONSUMPTION PER CAPITAKg/person/year; 1961-2017

POULTRY EXPORT VOLUMET; 000; 2018 or as available

Source: UN FAO; MAF/MPI; UN Comtrade; Coriolis analysis

Ireland

UK

Canada

NZ

Australia

USA

4.9x


Future employment growth will either come from (1) existing regions getting bigger or (2) a new region emerging

48

SIMPLE MODEL OF POTENTIAL FUTURE POULTRY PROCESSING EMPLOYMENT BY REGIONHeadcount; 2018 vs potential

Source: Statistics NZ; UN FAO; MAF/MPI; Coriolis analysis, estimates and modelling

1,100

1,050

670

760

-

55

Auckland

Waikato

Taranaki

Canterbury

Other

CURRENT (2018)

2,300

2,300

2,300

1,100

150

Auckland

Waikato

Taranaki

Canterbury

Other

MODEL 1WINNERS WIN

1,800

1,800

1,800

1,100

1,500

150

Auckland

Waikato

Taranaki

Canterbury

"New Region"

Other

MODEL 2NEW WINNER(S) EMERGE

TOTAL = 3,635 TOTAL = 8,150 TOTAL = 8,150


Four broad opportunities exist to drive growth in the poultry industry

49Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis estimates

TARGET KEY EXPORT MARKETS

DEVELOP VALUE-ADDED PRODUCTS

INVEST IN GROWTH OF DOMESTIC

CONSUMPTION

321INVEST IN

ALTERNATIVE POULTRY SPECIES (DUCK,

TURKEY)

4

- Growing chicken consumption in NZ

- Growing global demand for protein (in particular chicken)

- Leverages NZ capabilities and reputation (free-from)

- Premium consumers in key export markets

- High value product- Leverages NZ capabilities

and reputation

- Brand and story develops loyalty


export markets- Duck favoured species in

parts of Asia

IMPORTANT DAIRY MEAT POULTRY SEAFOOD PRODUCE ARABLE PROCESSED WINE APPENDICESIMPORTANT GROWINGVARIEDPOTENTIAL OTHER BEV.

4. Seafood is unlikely to create new jobs without new aquaculture coming into production- Seafood production & processing employment in New Zealand is concentrated in key regions and overall

employment is falling

- Seafood is creating jobs in some regions, but not others; job losses in Nelson/Tasman are the standout

- New Zealand has an abundance of coastline spread across all regions; however, only Nelson/Tasman and Canterbury stand out as creating significant seafood jobs from their coastline

- Realised production of wild capture per kilometre of coastline has been falling and aquaculture has stalled

- New Zealand achieves a moderate wild catch per kilometre of coastline relative to many peers

- New Zealand has clear potential to produce more aquaculture

- NZ seafood industry jobs per kilometre of coastline is lower than European peers supporting the potential for employment growth; if New Zealand could match any peer, significant new jobs would result

- Two broad opportunities to drive growth in seafood are highlighted: (1) Salmon and (2) Region Suitable Aquaculture (e.g. opportunity for inland acquaculture on rough coasts)

50


Seafood production & processing employment in New Zealand is concentrated in key regions and overall employment is falling

-

2,000

4,000

6,000

8,000

10,000

12,000

200

02

001

200

22

003

200

42

005

200

62

007

200

82

009

201

02

011

201

22

013

201

42

015

201

62

017

201

8

Northland 234

Auckland 1,086

Waikato 394

Bay of Plenty550

Gisborne 81

Hawke's Bay138

Taranaki 21

Mana-Wanga57

Wellington 176

Nelson/Tasman2,243

Marlborough785

West Coast 224

Canterbury1,890

Otago 181 Southland 440 Area Outside 88

51

TOTAL SEAFOOD SECTOR EMPLOYMENTHeadcount; 2000-2018

SEAFOOD SECTOR JOBS BY REGION Headcount; 2018


TOTAL = 8,588 seafood sector employees

NOTE: Seafood section combines total industry as a result of

severe data issues


Seafood is creating jobs in some regions, but not others; job losses in Nelson/Tasman are the standout

482

1,185

669

608

137

212

107

117

380

3,468

951

254

1,949

462

725

147

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

Area Outside

52



Note: Area Outside = at sea; Source: Statistics NZ; UN FAO; MAF/MPI; Coriolis analysis


375

1,218

520

658

114

183

36

72

275

2,396

956

254

2,064

268

599

136

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

Area Outside

-107

33

-149

50

-23

-29

-71

-45

-105

-1072

5

0

115

-194

-126

-11

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

Area Outside


New Zealand has an abundance of coastline spread across all regions

3,595

2,721

1,521

811

322 392 276 161

521 845

1,893

678 864

590

3,858

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-W

anga

Wellington

Nelson/Tasm

an

Marlborough

West C

oast

Canterbury

Otago

Southland

53

COASTLINE BY REGIONKm; 2019

Note: May not be comparable to other sources, but uses common measure (polygon size) across all regions; Source: LINZ dataset; Statistics NZ; Coriolis analysis


Only Nelson/Tasman and Canterbury stand out as creating significant seafood jobs from their coastline

54

TOTAL SEAFOOD INDUSTRY EMPLOYMENT PER KILOMETRE OF COASTLINEHeadcount/100 km; 2018


Otago

Nelson/Tasm

an

Canterbury

Bay of Plenty

Marlborough

Auckland

Mana-W

anga

Haw

ke's Bay

Wellington

West C

oast

Waikato

Gisborne

Southland

Northland

Taranaki

13

284

239

81

514545 5337 45

34 351610

47

Creating jobs from coastline

Underperforming in creating jobs from coastline May be opportunities to create more jobs from coastline

NZ average 53

Jobs/100 km

Proportional to Coastline

Denmark 91

Norway 169

UK 271


-

5

10

15

20

25

30

35

19501953195619591962196519681971197419771980198319861989199219951998200120042007201020132016

55

LANDED TONNES PER KM COASTLINET/km; 1950-2018

Source: UN FishStat; Statistics NZ; MPI/MAF/MoF; Coriolis analysis

-

1

2

3

4

5

6

19501953195619591962196519681971197419771980198319861989199219951998200120042007201020132016

WILD CAPTURE AQUACULTURE

Realised production of wild capture per kilometre of coastline has been falling and aquaculture has stalled


New Zealand achieves a moderate wild catch per kilometre of coastline relative to many peers

67

57 51 51 49

44

32 30 28 28 21 21

17 16 15 13 9 8 8 5 5 4 4

Lithuania

Netherlands

Belgium

Spain

Poland

Latvia

France

Portugal

Ireland

Iceland

Malta

New

Zealand

Germ

any

Slovenia

Italy

Bulgaria

Norw

ay

United Kingdom

Finland

Denmark

Croatia

Sweden

Greece

Cyprus

Romania

Estonia

56

LANDED WILD CATCH PER KILOMETRE OF COASTLINE: NZ VS EUROPET/km; 2018 or as available

Source: UN FAO FishStat; Eurostat; MPI; CIA World Fact Book; Coriolis analysis

212 295 404


57

MATRIX: TONNES/KILOMETRE VS DOLLARS/KILOMETRE VS TOTAL INDUSTRY VALUET/km (actual); US$/km (actual); total US$m; 2018 or as available

Source: UN FAO FishStat; Eurostat; MPI; CIA World Fact Book; Coriolis analysis

60 14030 702010 50400

$300,000

$250,000

$0

$200,000

$150,000

$50,000

$350,000

$100,000

EstoniaIceland Latvia

Bulgaria

SloveniaUK Lithuania SpainTurkeyIreland

Romania Poland

NetherlandsFrance

Norway

Belgium

Cyprus

$1,000

Finland

DenmarkSweden

Croatia

PortugalGreece

NZ

GermanyItaly

Tonnes of aquaculture produced per kilometre of coastline; t/km; 2018 or as available

US$ per kilometre of

coastline;2018 or as

available

Size of bubble is proportional to total value; a bubble this size is US$1b

New Zealand has clear potential to produce more aquaculture


2,174 2,161

1,869 1,746

1,239 1,014

621

377 277 271 187 169 139 91 53

Poland

Netherlands

Romania

Portugal

Spain

France

Finland

Ireland

Greece

Iceland

United Kingdom

Croatia

Norw

ay

Sweden

Denmark

New

Zealand

58

FISHING/AQUACULTURE/PROCESSING SEAFOOD INDUSTRY EMPLOYMENT PER KMHeadcount/km; 2018 or as available

Note: New Zealand total includes wholesale but other do not; Source: UN FAO FishStat; Eurostat; MPI; CIA World Fact Book; Coriolis analysis

8,225

Discussed next page (x Croatia)

NZ seafood industry jobs per kilometre of coastline is lower than European peers supporting the potential for employment growth


United KingdomNorwaySwedenDenmarkNew Zealand

59

MODEL: NUMBER OF JOBS CREATED IF NZ COULD MATCH PERFORMANCE OF…Headcount; 2018 versus modelled potential

Note: New Zealand total includes wholesale but other do not; Denmark excludes Greenland and Faroe Is. data (cf. Kingdom of Denmark); Source: UN FAO FishStat; Eurostat; MPI; CIA World Fact Book; Coriolis analysis

Seafood jobs per kilometre of coastline

53 91 139 169 271

10,080

+7,200

+16,400

+22,200

+42,000

How to read: If NZ could match Denmark and create 91 jobs per kilometre of coastline, this would

result in +7,200 new jobs

If New Zealand could match any peer, significant new jobs would result


Two broad opportunities to drive growth in seafood are highlighted: (1) Salmon and (2) Region Suitable Aquaculture

1. Defined as North America, EU, Japan, Chile, Argentina, South Africa, Australia; Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis estimates

IDENTIFY REGION SUITABLE

AQUACULTURE

ATLANTIC & PACIFIC SALMON

21

60

- 41% of NZ peers1 produced Atlantic salmon (2015)

- Global trade $15.1b in 2015

- Capabilities in salmon farming

- High quality omegas and oils

- Opportunity to develop aquaculture beyond mussels, oysters and salmon

- Extensive coastline (10th

longest in the world)

- Aquaculture global growth story vs wild

IMPORTANT DAIRY MEAT POULTRY SEAFOOD PRODUCE ARABLE PROCESSED WINE APPENDICESIMPORTANT GROWINGVARIEDPOTENTIAL OTHER BEV.

5. Produce wholesaling & processing is unlikely to create new jobs without significant new land coming into production- New Zealand F&V processors/wholesalers are creating modest numbers of new jobs and jobs are spread

across all regions

- Mild overall employment growth masks regional shifts, with the Upper North Island leading growth and many others declining

- New Zealand turns its abundant fruit and vegetables into few processing jobs, particularly relative to major US regions

- There is a clear case that all regions of New Zealand can increase area in fruit and vegetables

- Eight broad opportunities to drive growth in the fruit, nut and vegetable industry are highlighted

61


New Zealand F&V processors/wholesalers are creating modest numbers of new jobs and jobs are spread across all regions

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Northland 195

Auckland2,360

Waikato 275

Bay of Plenty670

Gisborne 680

Hawke's Bay1,890

Taranaki 30

Mana-Wanga

280

Wellington245

Nelson/Tasman473

Marlborough373

West Coast -

Canterbury1,450

Otago 162

Southland 37

62

F&V PROC/WHLS EMPLOYMENTHeadcount; 2000-2018

F&V PROC/WHLS EMPLOYMENTHeadcount; 2018


TOTAL = 9,120 employees

WHOLESALE & PROCESSING EMPLOYMENT0.5% (00-18)


Mild overall employment growth masks regional shifts, with the Upper North Island leading growth and many others declining

131

1,480

158

300

645

2,300

21

360

135

380

445

15

1,480

390

55

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

63


18Y CHANGE (CAGR)Headcount; 00vs18



2.2%

2.6%

3.1%

4.6%

0.3%

-1.1%

2.0%

-1.4%

3.4%

1.2%

-1.0%

-0.1%

-4.8%

-2.2%

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

195

2,360

275

670

680

1,890

30

280

245

473

373

-

1,450

162

37

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

-100%


New Zealand turns its abundant fruit and vegetables into few processing jobs, particularly relative to major US regions

0

5

10

15

20

25

30

35

Texas

New

York

Florida

Michigan

Oregon

Minnesota

Indiana

Georgia

USA (average)

Washington

Estonia

United Kingdom

Sweden

Czechia

Hungary

Australia

Norw

ay

Canada

Austria

Lithuania

Ireland

Germ

any

Greece

New

Zealand

Poland

Finland

Switzerland

Denmark

64

PROCESSING EMPLOYMENT PER 1,000 TONNE OF F&V: NZ VS SELECT PEERSHeadcount/1,000t processed/handled; 2018 or as available

Note: This specific analysis excludes wholesaling for data availability reasons (comparing apples with apples); Source: UN FAO; USDA NASS; USDA Census of Agriculture; Eurostat; MPI; Coriolis analysis and classifications

3.3x


There is a clear case that all regions of New Zealand can increase area in fruit and vegetables

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Netherla

nds

ItalyBelgiumSpa

inPortug

alC

aliforniaG

reeceRom

ania

PolandH

ungary

Albania

Auckland

Bay of PlentyBelarusFra

nceD

elawa

reC

roatia

FloridaG

erma

nyD

enmark

Haw

ke's Bay

SloveniaG

isborneW

ashingtonSw

itzerland

United

KingdomA

ustriaBulg

ariaN

ew Jersey

LithuaniaLuxem

bourgC

zech Republic

Nelson/Tasm

an

Northla

ndG

eorgiaH

awaii

Idaho

Canterbury

Wisconsin

New

YorkLatviaSlova

kiaN

orth Carolina

Oregon

Waikato

Minnesota

Ma

na-W

ang

aEstoniaW

ellingtonIrela

ndO

tago

TexasFinlandSw

eden

Norw

ay

Australia

Canad

aSouthlandM

arlborough

TaranakiM

ontanaIcelandW

est Coast

Alaska

65

SHARE OF TOTAL LAND AREA IN FRUIT & VEGETABLES% of sq km; 2018 or as available

Source: UN FAO; USDA Census of Agriculture; Eurostat; OIV; CIA World Fact Book; Statistics NZ; Coriolis analysis

Mostly solid temperate climate peer group for New Zealand

Mostly peers with large amounts of frozen or desert land

Many regions of New Zealand are

underperforming peers


Three broad opportunities to drive growth in the vegetable industry are highlighted


OTHER PROCESSING VEGETABLES

UNDER COVER/ GLASSHOUSE

31ONIONS,

POTATOES & OTHER ROOT

CROPS

- Increase industry scale

- Attract new investment from Europe

- Target high value markets, particularly AU and developed Asia

- Attract new investment

- Need to scale up and increase average farm sizes

- Targeting value added processed products for Asian markets

- New Zealand achieves world class yields

- Need to scale up and increase average farm sizes

- Targeting value added processed products for Asian markets

2


Five broad opportunities to drive growth in the fruit & nut industry are highlighted

67*For more detail on nuts see ‘What does Asia want for dinner’ https://www.mbie.govt.nz/dmsdocument/2237-what-does-asia-want-for-dinner-part-1-pdf; Note: Jobs includes on-farm and processing; Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis estimates

APPLES KIWIFRUITNUTS*

654

AVOCADOS

7

- Huge growth in healthy foods and snacking categories

- High $/kilo*

- Leverage market access and capabilities in apples

- #3 Southern Hemisphere producer

- Growth in new varieties

- Leverage market access and capabilities in kiwifruit

- #1 global exporter

- Strong export growth

- Significant growth in plantings/production

- Growth in global consumption

- Growth in NZ exports to AU and Asia

- Strong promotion of health benefits

CHERRIES, BERRIES & OTHER EMERGING FRUIT

8

- Significant growth in plantings/production

- Growth in global consumption

- Growth in NZ exports to AU and Asia

- Strong promotion of health benefits


https://www.mbie.govt.nz/dmsdocument/2237-what-does-asia-want-for-dinner-part-1-pdf

6. Grain processing & wholesaling is unlikely to create significant new jobs going forward without developing new products - Grain processors/wholesalers jobs are predominantly in Auckland and Canterbury and employment is not

growing

- Mild overall decline masks regional shifts, with Auckland, Canterbury and Otago growing jobs while all others are declining

- New Zealand is not obviously underperforming peers in turning area in market grains into grain-processing jobs

- Four broad opportunities to drive growth in the grain-based foods industry are highlighted

68


Grain processors/wholesalers jobs are predominantly in Auckland and Canterbury and employment is not growing

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Northland 21

Auckland2,940

Waikato 203 Bay of Plenty

460

Gisborne 104

Hawke's Bay 27

Taranaki 225

Mana-Wanga208

Wellington296

Nelson/Tasman48

Marlborough21

West Coast -

Canterbury1,750

Otago 280 Southland 54

69

GRAIN PROC/WHLS EMPLOYMENTHeadcount; 2000-2018

GRAIN PROC/WHLS EMPLOYMENTHeadcount; 2018


TOTAL = 6,640 employees

WHOLESALE & PROCESSING EMPLOYMENT-0.2% (00-18)


Mild overall decline masks regional shifts, with Auckland, Canterbury and Otago growing jobs while all others are declining

165

2,385

319

485

110

100

278

310

717

50

39

1,505

253

151

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

70


18Y CHANGE (CAGR)Headcount; 00vs18



-10.8%

1.2%

-2.5%

-0.3%

-0.3%

-7.0%

-1.2%

-2.2%

-4.8%

-0.2%

-3.4%

0.8%

0.6%

-5.6%

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

21

2,940

203

460

104

27

225

208

296

48

21

-

1,750

280

54

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland


New Zealand is not obviously underperforming peers in turning area in market grains into grain-processing jobs

-

50

100

150

200

250

300

Latvia

Estonia

Lithuania

Denmark

Finland

Hungary

Spain

Poland

Romania

Sweden

Bulgaria

Slovakia

France

Ireland

Czechia

United Kingdom

Norw

ay

Austria

Croatia

Slovenia

New

Zealand

Italy

Greece

Germ

any

Luxembourg

Belgium

Portugal

Switzerland

Netherlands

71

POST FARMGATE GRAIN-BASED PROCESSED FOOD JOBS PER HECTARE OF GRAINS*Headcount/ha; 2018 or as available

*Uses grains and pulses (excludes fodder crops); Note: not adjusted for imports/exports (it is out of scope, but performance would be poorer if this was included); there is clearly further scope for import substitution; Source: Statistics NZ; UN FAO; MAF/MPI; Eurostat; Coriolis analysis


Four broad opportunities to drive growth in the grain-based foods industry are highlighted


OAT ‘MILK’ SEEDSHIGH DAIRY

COMPONENT BAKED PRODUCTS

321

HEMP(F&B USAGE)

4

- Par-baked frozen categories growing

- Add value to existing and new oat crops

- Counter-seasonal clean seed production

- Climatically suited to wide range of crops (pasture, vegetable, grains, seed, forage)

- Significant source of essential amino acids, omegas

- Growth in plant based proteins

- Leverage growing capabilities


7. New Zealand can continue to grow employment in processed foods production- ‘Processed foods’ captures a wide range of products that are made from a combination of ingredients

- New Zealand has large and growing volumes of raw materials suitable for making processed foods

- New Zealand’s food & beverage exports are currently still over-weighted to low value-added, unprocessed ingredients

- However, New Zealand’s exports of value-added processed foods and beverages are growing strongly long term

- Processed foods is creating jobs; however, jobs are currently concentrated in Auckland

- Employment growth varies by region; Northland, Hawke’s Bay, Wellington and Nelson/Tasman achieving high growth rates

- Peers suggest New Zealand can create more processed foods jobs from its abundant raw materials

- If New Zealand could match key peers, ~3,000 to 30,000 new jobs would result

- Four broad opportunities to drive growth in the processed foods industry are highlighted

73


‘Processed foods’ captures a wide range of products that are made from a combination of ingredients

74Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis analysis


New Zealand has large and growing volumes of raw materials suitable for making processed foods

75

TOTAL NEW ZEALAND FOOD PRODUCTION VOLUME AT FARM GATE1

T; 000; 1961-2018

1. Dockside for seafood production; *Milk is milk solids; meat is dressed but bone-in; seafood is green weight as reported; **Fruit includes wine grapes; honey line is thickened to make it visible; Source: United Nations FAOStat & FishStat; MAF/MPI; Coriolis analysis

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

196

1

196

3

196

5

196

7

196

9

197

1

197

3

197

5

197

7

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

200

1

200

3

200

5

200

7

200

9

201

1

201

3

201

5

201

7

Cereals

Vegetables

Fruit**

EggsSeafood

Meat

Dairy*

Honey

CAGR(61-18)2.1%


New Zealand’s food & beverage exports are currently still over-weighted to low value-added, unprocessed ingredients

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Switzerland

United Kingdom

Italy

Japan

Germ

any

Ireland

Netherlands

Sweden

Finland

Spain

Denmark

Canada

New

Zealand

76

AGRIFOOD EXPORTS VALUE SHARE BY SEGMENT: NZ VS OTHER RICH COUNTRIES% of value; 2017

Source: UN Comtrade database; Coriolis classifications and analysis

Beverages

Processed FoodsOilseeds, Oils & Fats

Produce

Dairy

Seafood

Meat

Grains

CLEAR STRATEGIC DIRECTION


However, New Zealand’s exports of value-added processed foods and beverages are growing strongly long term

$-

$1.0

$2.0

$3.0

$4.0

$5.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

77

NEW ZEALAND VALUE-ADDED PROCESSED FOODS & BEVERAGE EXPORTSUS$; b; 1998-2017

Source: UN Comtrade database; Coriolis classifications and analysis

CAGR(98-17)9.2%


Processed foods is creating jobs; however, jobs are currently concentrated in Auckland

-

2,000

4,000

6,000

8,000

10,000

12,000

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Northland 226

Auckland5,350

Waikato1,516 Bay of Plenty

866

Gisborne 15

Hawke's Bay339

Taranaki 155

Mana-Wanga662

Wellington895

Nelson/Tasman219

Marlborough141

West Coast -

Canterbury815

Otago654

Southland 152

78

PROCESSING EMPLOYMENTHeadcount; 2000-2018

PROCESSING EMPLOYMENTHeadcount; 2018


TOTAL = 12,005 processed foods employees

FOOD PROCESSING EMPLOYMENT2.7% (00-18)


Employment growth varies by region; Northland, Hawke’s Bay, Wellington and Nelson/Tasman achieving high growth rates

39

4,270

281

353

24

56

72

303

455

45

58

-

790

573

163

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

79


18Y GROWTH (CAGR)%; 00vs18



226

5,350

1,516

866

15

339

155

662

895

219

141

-

815

654

152

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

10.3%

1.3%

9.8%

5.1%

-2.6%

10.5%

4.4%

4.4%

3.8%

9.2%

5.1%

0.0%

0.2%

0.7%

-0.4%

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland


Peers suggest New Zealand can create more processed foods jobs from its abundant raw materials

8.7

6.7 6.1 6.0

5.3

4.4 3.9 3.8 3.8 3.8 3.6 3.5 3.5 3.3 3.2 3.1

2.2 2.2 2.1 2.0 1.9 1.9 1.9 1.8 1.8 1.7 1.6 1.6 1.5 1.2

Estonia

United Kingdom

United States

Switzerland

Croatia

Slovenia

Czechia

Slovakia

Finland

Hungary

Lithuania

Ireland

Canada

Sweden

Latvia

Australia

Germ

any

Denmark

Austria

Portugal

Italy

Poland

Romania

New

Zealand

Greece

France

Belgium

Norw

ay

Spain

Iceland

80

PROCESSED FOODS JOBS PER 1,000 TONNE RAW MATERIALS* Headcount/1,000t; 2018 or as available

*Non-grain based (see previous section for grain); Source: UN FAO AgStat; UN FAO FishStat; Eurostat; Statistics Canada; US DOL; USDA NASS; Statistics NZ; Australian Bureau of Statistics; Coriolis classification and analysis


If New Zealand could match key peers, ~3,000 to 30,000 new jobs would result

UnitedKingdom

United Statesof America

FinlandIrelandCanadaAustraliaDenmarkNew Zealand

81

MODEL: NUMBER OF JOBS CREATED IF NZ COULD MATCH PERFORMANCE OF…Headcount; 2018 versus modelled potential

*Non-grain based (see previous section for grain); Source: UN FAO AgStat; UN FAO FishStat; Eurostat; Statistics Canada; US DOL; USDA NASS; Statistics NZ; Australian Bureau of Statistics; Coriolis classification and analysis

Processed food jobs per 1,000t raw materials

1.8 2.2 3.1 3.8

12,005+2,700

+8,300+11,000

+29,000How to read: If NZ could match Ireland and create 3.5 jobs per 1,000t of raw materials, this

would result in +12,000 new jobs

+12,000 +13,000

+32,000

3.5 3.5 6.76.1


Four broad opportunities to drive growth in the processed foods industry are highlighted

*Defined by Coriolis as global trade code HS210690 ‘Other Food Not Elsewhere Classified’; Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis estimates

PET FOODCONFECTIONERY

& SNACKSNUTRACEUTICALS

321

82

- High value product- Leverages NZ capabilities

and reputation - Growing global demand


export markets- High growth category

- Global Pet food category ~US$100b


- Growth in convenient, portable, snacking categories

- Multiple added value options across multiple categories

- Global category +US$100b

NEW & INNOVATIVE FOODS*

4

- New products and categories that didn’t previously exist

- Segment is demonstrating strong export driven growth

- Leveraging NZ innovation

?


8. Creating employment growth in New Zealand wine productionwill require regions outside Marlborough to grow- New Zealand wineries are creating jobs and jobs are spread across key regions; however, only four

regions – Marlborough, Auckland, Otago and Nelson – are creating significant new wine processing employment

- NZ is unlikely to squeeze more processing jobs out of each tonne of grapes; more jobs will need to come from more grapes

- Can New Zealand produce more wine grapes?

- New Zealand regions vary in terms of the share of total area that is in wine grapes; only Marlborough (2.4%) stands out

- Relative to other countries and regions, only Marlborough has wine grapes at a relatively high proportion of land area

- New Zealand is growing wine grape production, though this been driven primarily by new land in Marlborough

- New Zealand is overweighted to one wine region; older, more mature climatic peers have a more balanced portfolio of regions; when New Zealand balances its portfolio, significant new area will come into production

- Three broad opportunities to drive growth in the wine industry are highlighted

83


New Zealand wineries are creating jobs and jobs are spread across key regions

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Northland 55

Auckland 540 Waikato/BOP

43 Gisborne 120

Hawke's Bay350

Wairarapa160

Nelson183

Marlborough1,250

Canterbury180

Otago 560

Other 28

84

WINE PROCESSING EMPLOYMENTHeadcount; 2000-2018

WINE PROCESSING EMPLOYMENTHeadcount; 2018


TOTAL = 3,469 wine processing employees


Only four regions – Marlborough, Auckland, Otago and Nelson –are creating significant new wine processing employment

570

120

250

48

15

-

180

50

190

400

630

Marlborough

Auckland

Otago

Nelson

Northland

Other

Canterbury

Waikato/BOP

Wellington

Gisborne

Hawke's Bay

85



*Primarily in the Wairarapa; Source: Statistics NZ; UN FAO; MAF/MPI; Coriolis analysis


1,250

540

560

183

55

28

180

43

160

120

350

Marlborough

Auckland

Otago

Nelson

Northland

Other

Canterbury

Waikato/BOP

Wellington

Gisborne

Hawke's Bay

680

420

310

135

40

28

-

(7)

(30)

(280)

(280)

Marlborough

Auckland

Otago

Nelson

Northland

Other

Canterbury

Waikato/BOP

Wellington

Gisborne

Hawke's Bay

SHRINKING

SOME/NO

STRONG

*


NZ is unlikely to squeeze more processing jobs out of each tonne of grapes; more jobs will need to come from more grapes

-

5

10

15

20

25

NewZealand2005

USA (Total) California Hungary Portugal NewZealand2018

Australia Spain Germany France Italy

86

WINERY EMPLOYMENT PER 1,000 TONNE OF GRAPESHeadcount/1,000t processed; 2018

Note: European data captures wine manufacturing facilities; appears to exclude significant cellar door activities; Source: OIV; Eurostat; USDA; Wine Institute; Wine America; WineNZ; Statistics NZ; Coriolis analysis and estimates


New Zealand regions vary in terms of the share of total area that is in wine grapes; only Marlborough (2.4%) stands out

87

AREA VS SHARE OF TOTAL AREA IN WINE GRAPESSq km; % of sq km; 2018

Source: WineNZ; Statistics NZ; Coriolis analysis and estimates

Bay of Plenty

Otago

Taranaki

Waikato

Auckland

Mana-W

anga

West C

oast

Tasman/N

elson

Canterbury

Southland

Gisborne

Haw

ke's Bay

Marlborough

Wellington

Northland

0.12%0.13%0.17%0.07%

0.35%

0.06%

2.40%

0.03%0.00% 0.00%0.00%0.00% 0.00%0.01% 0.00%

Proportional to total area of New Zealand

% of total area in wine grapes; 2018


Relative to other countries and regions, only Marlborough has wine grapes at a relatively high proportion of land area

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Languedoc-RoussillonM

oldovaA

quitaine-Bordea

uxPoitou-C

harentes

Pr. Alpes-C

ôte d'A

zurM

arlborough

ItalyPortug

alSp

ainFranceRhône-A

lpes

Cha

mpa

gne-Ard

ennePa

ys de la Loire

Bourgogne

Midi-Pyrénées

Romania

Greece

Hunga

ryBulga

riaA

ustriaTurkeyC

alifornia

Switzerla

ndH

aw

ke's BayG

ermany

Chile

Uzb

ekistanG

isborne

New

Zealand

Wellington

Wa

shingtonTa

sman/N

elsonSouth A

fricaIranC

hinaA

rgentina

Auckland

Ota

goIndiaU

nited Sta

tesO

regon

New

York

Ca

nterbury

Australia

Mexico

Brazil

RussiaN

orthland

Texas

Bay of Plenty

Wa

ikato

Tara

naki

Mana-W

ang

aW

est Coast

Southland

88

SHARE OF TOTAL AREA OF COUNTRY/REGION THAT IS IN WINE GRAPES% of area; 2018 or as available

Source: OIV; Eurostat; USDA; Wine Institute; Wine America; WineNZ; Statistics NZ; Coriolis analysis and estimates


New Zealand is growing wine grape production, though this been driven primarily by new land in Marlborough

0

50

100

150

200

250

300

350

400

450

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

89

TOTAL NEW ZEALAND WINE GRAPE PRODUCTION T; 000; 1992-2018

Source: Statistics NZ; UN FAO; MAF/MPI; New Zealand Winegrowers; Coriolis analysis

8y CAGR(92-00)4.7%

Marlborough

CanterburyOtago

Gisborne

Hawke’s BayWellingtonNelson

Waikato/BOPAucklandNorthland

18y CAGR(00-18)9.6%


New Zealand is overweighted to one wine region; older, more mature climatic peers have a more balanced portfolio of regions

67%

50% 48%

30% 25%16%

13%

12%8%

18%18%

15%

5%

11%

7%12%

17%

14%

4%

7%

7% 11% 6%

10%

4%

7%

6% 6%6%

9%

3%5%

5% 5%6%

7%

3%4%

4% 4%5%

5%

1%2%

4% 4%5%

5%

0% 1%

3% 4% 3%

3%

0% 1%2% 3% 3%

3%

1% 4% 3% 6%10%

0% 0% 0% 0% 3%

NZ Germany Spain France Greece Italy

90

SHARE OF WINE GRAPE AREA TOP TEN REGIONS & OTHER: NZ VS SELECT% of ha; 2018 or as available

Note: Europe uses NUTS2 regions (which are not the same as the commonly known wine regions, which are smaller); Source: NZ Winegrowers; Eurostat; Coriolis analysis

#1

#2

#3

#4

#5#6

#7#8#9#10

Next 5

Other

Country Size Km2; 000 633357 132 301270 506


When New Zealand balances its portfolio, significant new area will come into production

91

MODEL: NEW ZEALAND WINE AREA IF IT MATCHES REGIONAL MIX OF SELECT PEERSHa; 2018 vs hypothetical future

Note: Europe uses NUTS2 regions (which are not the same as the commonly known wine regions, which are smaller); Source: NZ Winegrowers; Eurostat; Coriolis analysis

25,119 25,119 25,119 25,119 25,119 25,119

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

NZ Germany Spain France Greece Italy

#1

#2

#3

#4

#5#6

#7#8#9#10

Next 5

Other

What if Marlborough were to stay the same size and other regions match ratios of this country?

37,542

50,000 52,000

84,000

102,000

157,000

1.4x

2.2x

4.2x


Three broad opportunities to drive growth in the wine industry are highlighted


‘COGNAC’NON-MARLBOROUGH

RED REGIONSPARKLING WINE

321

92

- Leverage NZ capabilities in beverages

- Growth in (non-Champagne) category e.g. Prosecco/Cava

- Long term growth of category

- NZ needs to identify its sparkling variety

- Opportunity for NZ to find it’s high quality brandy

- Leverage NZ capabilities in wine

- +US$6b traded in 2015

- US$2.1b retail value of luxury cognac by 2020

- Leverage NZ reputation for quality wine

- Red high value category


9. New Zealand can continue to grow employment in non-wine beverages - Non-wine beverages are mostly water and some plant-based ingredients; as such they are not supply

constrained

- Beverage processing is creating jobs; however, most jobs are currently concentrated in Auckland

- As a contrast, the beverage industry in the United Kingdom creates 95% of jobs outside London

- Beverage employment growth varies by region; Auckland, Waikato, Hawke’s Bay, Wellington and Otago doing well

- New Zealand should be able to match the jobs per square kilometre performance of Ireland or Denmark

- Looked at a different way, NZ should at least be able to grow non-wine exports per capita, and thus jobs, to match peers

- Four broad opportunities to drive growth in the beverage industry are identified

93


Non-wine beverages are mostly water and some plant-based ingredients; as such they are not supply constrained

94Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes; Source: Coriolis analysis

BEER SPIRITS SOFT DRINKS JUICE WATER

Water (~90-95%)Barley/other grains

HopsFlavours

Water (60-70%)Alcohol (whey or other)

Flavours

Water (90%+)Juices

Sugar/sweetenersCaffeine (from coffee)

Flavours

Fruit(Water 85-90%)

Water


Beverage processing is creating jobs; however, most jobs are currently concentrated in Auckland

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Northland 9

Auckland2,210

Waikato160

BOP 72 Gisborne 21

Hawke's Bay118

Taranaki 9

Mana-Wanga18

Wellington254

Nelson/Tasman180

Marlborough47

West Coast 12

Canterbury415

Otago 138

Southland 12

95

BEVERAGE PROCESSING EMPLOYMENTHeadcount; 2000-2018

BEVERAGE PROCESSING EMPLOYMENTHeadcount; 2018


TOTAL = 3,675 processing employees


As a contrast, the beverage industry in the United Kingdom creates 95% of jobs outside London

96

SHARE OF NON-WINE BEVERAGE PROCESSING JOBS BY REGION: UK VS NZ% of beverage manufacturing employment; NZ 2018/UK 2016

Note: West Central Scotland creates more non-wine beverage jobs on its own than all of NZ; Source: Statistics NZ; Eurostat; Coriolis analysis

UK NZ

Southern Scotland

West Central Scotland

Eastern Scotland

Highlands and IslandsNorth Eastern Scotland

5%

60%

SouthlandOtago

Canterbury

West CoastMarlboroughNelson/TasmanWellingtonMana-WangaTaranakiHawke's BayGisborneBay of PlentyWaikato

Auckland

Northland

100% 100%

WalesGloucestershire, Wiltshire and Bristol/Bath

DevonCornwall

Dorset and Somerset

All Other Regions

Bedfordshire and HertfordshireOther West Midlands

Shropshire and StaffordshireHerefordshire, Worcestershire and Warwickshire

Yorkshire

CheshireLancashire

Greater ManchesterLondon

South East

Scotland25%

Other than London & Scotland70%

Other than Auckland40%


Beverage employment growth varies by region; Auckland, Waikato, Hawke’s Bay, Wellington and Otago doing well

9

1,720

53

132

3

9

3

39

38

74

40

25

475

52

-

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

97


18Y CHANGE (CAGR)%; 00vs18



9

2,210

160

72

21

118

9

18

254

180

47

12

415

138

12

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland

0.0%

1.4%

6.3%

-3.3%

11.4%

15.4%

6.3%

-4.2%

11.1%

5.1%

0.9%

-4.0%

-0.7%

5.6%

Northland

Auckland

Waikato

Bay of Plenty

Gisborne

Hawke's Bay

Taranaki

Mana-Wanga

Wellington

Nelson/Tasman

Marlborough

West Coast

Canterbury

Otago

Southland


New Zealand should be able to match the jobs per square kilometre performance of Ireland or Denmark

-

50

100

150

200

250

300

350

400

450

United Kingdom

Belgium

Czech Republic

Netherlands

Germ

any

Switzerland

Austria

Hungary

Poland

Portugal

Italy

Denmark

Ireland

Lithuania

France

Spain

Greece

Latvia

USA

Estonia

New

Zealand

Sweden

Norw

ay

Finland

Canada

Australia

98

NON-WINE BEVERAGE JOBS PER 1,000 SQUARE KILOMETRE OF COUNTRYHeadcount/1,000 km2; 2018 or as available

Source: US DOL; Eurostat; ABS; Statistics NZ; Coriolis classification and analysis

The only real limit on the ability of a country or region to produce beverages would appear to be ‘story telling’ (aka. marketing)

4x


Looked at a different way, NZ should at least be able to grow non-wine exports per capita, and thus jobs, to match peers

$315

$281

$237

$155 $145

$109

$68

$35

IrelandAustriaSwitzerlandDenmarkUnitedKingdom

FranceGermanyNew Zealand

99

NON-WINE EXPORT VALUE PER CAPITA: NZ VS SELECT PEERSUS$/capita; 2018 or as available

*Conservatively assumes 1 direct beverage processing job per NZ$730,000 in export revenue (no magic multipliers, etc.); Source: UN Comtrade; Statistics NZ; Coriolis analysis and classification

+300 +700 +1,000 +1,100 +1,900 +2,300 +2,600How many new jobs would be created if NZ could match this country?*


Four broad opportunities to drive growth in the beverage industry are identified


WATERCIDER

& SIMILARALCOHOLIC SPIRITS

321

100

- Build on position in premium wine

- ~US$35b globally traded in 2015

- Premium water opportunities

- High volumes of water available in NZ

- ~US$2.4b globally traded in 2015

- Add value to apple and other fruits sector

- Britain uses 45% of its apples to make cider (NZ ~1%)

- ~US$1.4b globally traded in 2015

PREMIUM NON-ALCOHOLIC BEVERAGES

4

- Strong growth category

- Growing premium segment

- Good fit with New Zealand country image


APPENDIX

A1. Regional Growth Opportunities project context

A2. Regional Metrics Snapshot

A3. Abbreviations

101


A1: This work is part of the Regional Growth Opportunities research for the Food and Beverage Information Project (F&BIP)

102

NATIONAL SELECT REGIONSTh

is Re

port

This work builds on previous research as part of the F&BIP

103

FRESH FRUIT SECTOR OVERVIEW2012

See previous research reports at

https://www.mbie.govt.nz/business-and-employment/economic-development/growing-the-food-and-beverage-sector/food-and-beverage-information-project/and https://coriolisresearch.com/coriolis-research/reports/

PROCESSED FOODS DEPTH

2012

https://www.mbie.govt.nz/business-and-employment/economic-development/growing-the-food-and-beverage-sector/food-and-beverage-information-project/

https://coriolisresearch.com/coriolis-research/reports/

A2. APPENDIX: REGIONAL F&B PROCESSING EMPLOYMENT

104

REGIONS OF NEW ZEALAND PROFILED

1. Northland

2. Auckland

3. Waikato

4. Bay of Plenty

5. Gisborne

6. Hawke’s Bay7. Taranaki8. Manawatu-Wanganui

9. Wellington

12. West Coast

13.Canterbury

14. Otago15. Southland

11. Marlborough

10. Nelson/Tasman

1. NORTHLAND – PROCESSING

Units (2018)

Region has this % of all NZ units

in this sector18y ABS(00-18)

% of new unit growth in

sector (00-18)18y CAGR

(00-18)

18y CAGR vs NZ

averageProcessing jobs (2018)

Region has this % all NZ processing jobs in this sector

18y ABS(00-18)

% of new NZ employment

growth in sector (00-18)

18y CAGR(00-18)

18y CAGR vs NZ

average

Dairy 6 2.8% 0 0% 0.0% i 560 4.3% -80 -2% -0.7% i

Red Meat & Pork 12 3.7% 0 0% 0.0% i 710 2.7% -155 -13% -1.1% i

Poultry Meat - 0.0% 0 0% N/A h - 0.0% 0 0% N/A h

Seafood 15 4.6% -3 - -1.0% i 99 1.9% 3 - 0.2% h

Produce 15 3.2% 0 0% 0.0% i 195 2.1% 64 8% 2.2% h

Grain-Based 6 1.6% -3 - -2.2% i 24 0.4% -141 - -10.2% i

Processed Foods 37 3.7% 25 5% 6.5% h 226 1.9% 187 4% 10.3% h

Wine 6 1.4% 0 0% 0.0% i 50 1.3% 35 2% 6.9% h

Other Beverages 12 3.2% 3 1% 1.6% i 9 0.2% 0 0% 0.0% i

TOTAL 109 3.1% 22 2% 1.3% i 1,873 2.2% -87 -1% -0.3% i

PROCESSING QUANTITATIVE METRICS SCORECARD: NORTHLAND Various units as given; 2000-2018

ABS = Absolute change; CAGR = Compound Annual Growth Rate; Source: Statistics NZ; DairyNZ; MAF/MPI; Coriolis analysis and estimates105

2. AUCKLAND – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 63 29.2% 42 39% 6.3% h 2,150 16.6% 1,220 26% 4.8% hRed Meat & Pork 54 16.5% 0 0% 0.0% i 1,720 6.4% 570 47% 2.3% hPoultry Meat 12 34.3% 0 0% 0.0% h 1,100 30.3% 590 37% 4.4% hSeafood 105 32.2% 6 - 0.3% h 980 19.2% 210 - 1.3% hProduce 147 31.6% 9 15% 0.4% i 2,360 25.9% 880 106% 2.6% hGrain-Based 138 37.3% 45 - 2.2% h 2,940 44.2% 555 - 1.2% hProcessed Foods 348 34.9% 187 37% 4.4% h 5,350 44.5% 1,080 24% 1.3% iWine 75 17.1% 33 13% 3.3% i 980 24.9% 130 8% 0.8% iOther Beverages 120 32.2% 78 34% 6.0% h 2,210 60.1% 490 49% 1.4% iTOTAL 1,062 29.9% 400 35% 2.7% h 19,790 23.6% 5,725 42% 1.9% h

PROCESSING QUANTITATIVE METRICS SCORECARD: AUCKLAND Various units as given; 2000-2018


3. WAIKATO – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 39 18.1% 15 14% 2.7% i 3,200 24.7% 1,450 31% 3.4% h

Red Meat & Pork 36 11.0% -3 -11% -0.4% i 2,490 9.3% 360 29% 0.9% h

Poultry Meat 9 25.7% 6 - 6.3% h 1,050 28.9% 560 35% 4.3% h

Seafood 21 6.4% 3 - 0.9% h 209 4.1% -51 - -1.2% h

Produce 21 4.5% 6 10% 1.9% h 275 3.0% 117 14% 3.1% h

Grain-Based 27 7.3% 6 - 1.4% h 206 3.1% -113 - -2.4% i

Processed Foods 85 8.5% 45 9% 4.3% h 1,516 12.6% 1,235 27% 9.8% h

Wine 6 1.4% 0 0% 0.0% i 9 0.2% -21 -1% -6.5% i

Other Beverages 33 8.8% 24 11% 7.5% h 160 4.4% 107 11% 6.3% h

TOTAL 277 7.8% 102 9% 2.6% h 9,115 10.9% 3,644 27% 2.9% h

PROCESSING QUANTITATIVE METRICS SCORECARD: WAIKATO Various units as given; 2000-2018


4. BAY OF PLENTY – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 9 4.2% 6 6% 6.3% h 310 2.4% -120 -3% -1.8% iRed Meat & Pork 16 4.9% 3 11% 1.2% h 569 2.1% -281 -23% -2.2% iPoultry Meat - 0.0% -1 - -100.0% i - 0.0% -30 -2% -100.0% iSeafood 21 6.4% 3 - 0.9% h 415 8.1% 100 - 1.5% hProduce 48 10.3% 12 19% 1.6% h 670 7.3% 370 45% 4.6% hGrain-Based 16 4.3% -14 - -3.4% i 460 6.9% -31 - -0.4% iProcessed Foods 58 5.8% 27 5% 3.5% i 866 7.2% 513 11% 5.1% hWine 6 1.4% 5 2% 10.5% h 90 2.3% 20 1% 1.4% iOther Beverages 6 1.6% -6 -3% -3.8% i 72 2.0% -60 -6% -3.3% iTOTAL 180 5.1% 35 3% 1.2% i 3,452 4.1% 481 4% 0.8% i

PROCESSING QUANTITATIVE METRICS SCORECARD: BAY OF PLENTY Various units as given; 2000-2018


5. GISBORNE – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 3 1.4% 3 3% N/A h 45 0.3% 45 1% N/A hRed Meat & Pork 3 0.9% -3 -11% -3.8% i 270 1.0% 264 22% 23.6% hPoultry Meat - 0.0% 0 0% N/A h - 0.0% 0 0% N/A hSeafood 7 2.1% -2 - -1.4% i 46 0.9% -27 - -2.5% iProduce 15 3.2% 3 5% 1.2% h 680 7.5% 35 4% 0.3% iGrain-Based 8 2.2% -2 - -1.2% i 104 1.6% -6 - -0.3% iProcessed Foods 6 0.6% -1 0% -0.9% i 15 0.1% -12 0% -3.2% iWine 12 2.7% 6 2% 3.9% i 140 3.6% 20 1% 0.9% iOther Beverages 4 1.1% 3 1% 8.0% h 21 0.6% 18 2% 11.4% hTOTAL 58 1.6% 7 1% 0.7% i 1,321 1.6% 337 3% 1.6% h

PROCESSING QUANTITATIVE METRICS SCORECARD: GISBORNE Various units as given; 2000-2018


6. HAWKE’S BAY – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs NZ

average

Dairy 6 2.8% 6 6% N/A h 100 0.8% 100 2% N/A hRed Meat & Pork 30 9.1% 9 32% 2.0% h 2,715 10.2% -445 -36% -0.8% iPoultry Meat - 0.0% 0 0% N/A h - 0.0% 0 0% N/A hSeafood 12 3.7% 6 - 3.9% h 123 2.4% 45 - 2.6% hProduce 51 11.0% 18 29% 2.4% h 1,890 20.7% -410 -50% -1.1% iGrain-Based 7 1.9% -3 - -2.0% i 27 0.4% -76 - -7.2% iProcessed Foods 33 3.3% 20 4% 5.3% h 339 2.8% 283 6% 10.5% hWine 66 15.1% 33 13% 3.9% i 590 15.0% 280 17% 3.6% hOther Beverages 21 5.6% 14 6% 6.3% h 118 3.2% 109 11% 15.4% hTOTAL 226 6.4% 103 9% 3.4% h 5,902 7.0% -114 -1% -0.1% i

PROCESSING QUANTITATIVE METRICS SCORECARD: HAWKE’S BAYVarious units as given; 2000-2018


7. TARANAKI – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 6 2.8% 0 0% 0.0% i 1,800 13.9% -100 -2% -0.3% iRed Meat & Pork 21 6.4% 11 39% 4.2% h 1,985 7.4% 315 26% 1.0% hPoultry Meat 1 2.9% -5 - -9.5% i 670 18.4% 370 23% 4.6% hSeafood 3 0.9% -6 - -5.9% i 15 0.3% -40 - -7.0% iProduce 3 0.6% -3 -5% -3.8% i 30 0.3% 9 1% 2.0% hGrain-Based 9 2.4% 0 0% 0.0% h 225 3.4% -56 - -1.2% iProcessed Foods 21 2.1% 14 3% 6.3% h 155 1.3% 83 2% 4.4% hWine - 0.0% -1 0% -100.0% i - 0.0% -6 0% -100.0% iOther Beverages 9 2.4% 3 1% 2.3% i 9 0.2% 6 1% 6.3% hTOTAL 73 2.1% 13 1% 1.1% i 4,889 5.8% 581 4% 0.7% i

PROCESSING QUANTITATIVE METRICS SCORECARD: TARANAKI Various units as given; 2000-2018


8. MANAWATU-WANGANUI – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 12 5.6% 6 6% 3.9% i 800 6.2% 340 7% 3.1% hRed Meat & Pork 33 10.1% 6 21% 1.1% h 3,170 11.9% 840 69% 1.7% hPoultry Meat 3 8.6% -3 - -3.8% i 21 0.6% 3 0% 0.9% iSeafood 6 1.8% -1 - -0.9% i 45 0.9% -48 - -4.0% iProduce 21 4.5% 3 5% 0.9% h 280 3.1% -80 -10% -1.4% iGrain-Based 14 3.8% -16 - -4.1% i 208 3.1% -102 - -2.2% iProcessed Foods 54 5.4% 30 6% 4.6% h 662 5.5% 359 8% 4.4% hWine 3 0.7% 3 1% N/A h 3 0.1% 3 0% N/A hOther Beverages 9 2.4% 5 2% 4.6% i 18 0.5% -21 -2% -4.2% iTOTAL 155 4.4% 33 3% 1.3% i 5,207 6.2% 1,294 10% 1.6% h

PROCESSING QUANTITATIVE METRICS SCORECARD: MANAWATU-WANGANUI Various units as given; 2000-2018


9. WELLINGTON – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 15 6.9% 9 8% 5.2% h 90 0.7% -30 -1% -1.6% iRed Meat & Pork 15 4.6% -9 -32% -2.6% i 1,220 4.6% 250 20% 1.3% hPoultry Meat 3 8.6% 2 - 6.3% h 25 0.7% -85 -5% -7.9% iSeafood 24 7.4% -6 - -1.2% i 103 2.0% -117 - -4.1% iProduce 21 4.5% -3 -5% -0.7% i 245 2.7% 110 13% 3.4% hGrain-Based 28 7.6% -11 - -1.8% i 296 4.5% -421 - -4.8% iProcessed Foods 90 9.0% 45 9% 3.9% i 895 7.4% 434 10% 3.8% hWine 33 7.5% 21 8% 5.8% h 120 3.0% 40 2% 2.3% iOther Beverages 48 12.9% 39 17% 9.7% h 254 6.9% 216 22% 11.1% hTOTAL 277 7.8% 87 8% 2.1% i 3,248 3.9% 397 3% 0.7% i

PROCESSING QUANTITATIVE METRICS SCORECARD: WELLINGTON Various units as given; 2000-2018


10. NELSON/TASMAN – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 12 5.6% 6 6% 3.9% i 126 1.0% -64 -1% -2.3% iRed Meat & Pork 6 1.8% -3 -11% -2.2% i 276 1.0% -57 -5% -1.0% iPoultry Meat - 0.0% -3 - -100.0% i - 0.0% -3 0% -100.0% iSeafood 18 5.5% -9 - -2.2% i 998 19.6% -1,062 - -3.9% iProduce 30 6.5% 3 5% 0.6% i 473 5.2% 93 11% 1.2% hGrain-Based 10 2.7% 0 0% 0.0% h 48 0.7% -8 - -0.9% iProcessed Foods 33 3.3% 20 4% 5.3% h 222 1.8% 177 4% 9.3% hWine 24 5.5% 12 5% 3.9% i 140 3.6% 45 3% 2.2% iOther Beverages 18 4.8% 9 4% 3.9% i 180 4.9% 106 11% 5.1% hTOTAL 151 4.3% 35 3% 1.5% i 2,463 2.9% -773 -6% -1.5% i

PROCESSING QUANTITATIVE METRICS SCORECARD: NELSON/TASMAN Various units as given; 2000-2018


11. MARLBOROUGH – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 3 1.4% 0 0% 0.0% i 9 0.1% -61 -1% -10.8% iRed Meat & Pork 6 1.8% 3 11% 3.9% h 190 0.7% -220 -18% -4.2% iPoultry Meat - 0.0% 0 0% N/A h - 0.0% 0 0% N/A hSeafood 12 3.7% 0 0% 0.0% h 453 8.9% -17 - -0.2% hProduce 12 2.6% 0 0% 0.0% i 373 4.1% -72 -9% -1.0% iGrain-Based 9 2.4% 4 - 3.3% h 24 0.4% -15 - -2.7% iProcessed Foods 22 2.2% 14 3% 5.8% h 141 1.2% 83 2% 5.1% hWine 105 24.0% 66 26% 5.7% h 1,300 33.0% 700 44% 4.4% hOther Beverages 4 1.1% 0 0% 0.0% i 47 1.3% 7 1% 0.9% iTOTAL 173 4.9% 87 8% 4.0% h 2,537 3.0% 405 3% 1.0% i

PROCESSING QUANTITATIVE METRICS SCORECARD: MARLBOROUGH Various units as given; 2000-2018


12. WEST COAST – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 3 1.4% 0 0% 0.0% i 510 3.9% 360 8% 7.0% hRed Meat & Pork 9 2.7% 5 18% 4.6% h 312 1.2% 99 8% 2.1% hPoultry Meat - 0.0% 0 0% N/A h - 0.0% 0 0% N/A hSeafood 6 1.8% -6 - -3.8% i 203 4.0% 70 - 2.4% hProduce 3 0.6% -3 -5% -3.8% i 3 0.0% -12 -1% -8.6% iGrain-Based - 0.0% -3 - -100.0% i - 0.0% -3 - -100.0% iProcessed Foods 9 0.9% 9 2% N/A h 9 0.1% 9 0% N/A hWine - 0.0% 0 0% N/A h - 0.0% 0 0% N/A hOther Beverages 6 1.6% 3 1% 3.9% i 12 0.3% -13 -1% -4.0% iTOTAL 36 1.0% 5 0% 0.8% i 1,049 1.3% 510 4% 3.8% h

PROCESSING QUANTITATIVE METRICS SCORECARD: WEST COAST Various units as given; 2000-2018


13. CANTERBURY – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 24 11.1% 9 8% 2.6% i 2,350 18.1% 1,460 31% 5.5% hRed Meat & Pork 48 14.6% 6 21% 0.7% h 4,420 16.5% 300 25% 0.4% hPoultry Meat 6 17.1% -3 - -2.2% i 760 20.9% 290 18% 2.7% iSeafood 42 12.9% 0 0% 0.0% h 1,010 19.8% -485 - -2.2% iProduce 48 10.3% 15 24% 2.1% h 1,450 15.9% -30 -4% -0.1% iGrain-Based 67 18.1% -11 - -0.8% i 1,750 26.3% 245 - 0.8% hProcessed Foods 138 13.8% 41 8% 2.0% i 815 6.8% 25 1% 0.2% iWine 48 11.0% 30 12% 5.6% h 250 6.4% 140 9% 4.7% hOther Beverages 48 12.9% 26 11% 4.4% i 415 11.3% -60 -6% -0.7% iTOTAL 469 13.2% 113 10% 1.5% i 13,220 15.8% 1,885 14% 0.9% i

PROCESSING QUANTITATIVE METRICS SCORECARD: CANTERBURYVarious units as given; 2000-2018


14. OTAGO – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 9 4.2% 3 3% 2.3% i 270 2.1% 0 0% 0.0% iRed Meat & Pork 15 4.6% -3 -11% -1.0% i 3,062 11.5% -318 -26% -0.5% iPoultry Meat 1 2.9% -2 - -5.9% i 9 0.2% -31 -2% -8.0% iSeafood 7 2.1% -5 - -3.0% i 100 2.0% -242 - -6.6% iProduce 24 5.2% 3 5% 0.7% i 162 1.8% -228 -28% -4.8% iGrain-Based 24 6.5% 3 - 0.7% h 280 4.2% 27 - 0.6% hProcessed Foods 48 4.8% 22 4% 3.5% i 654 5.4% 81 2% 0.7% iWine 51 11.6% 39 16% 8.4% h 260 6.6% 215 13% 10.2% hOther Beverages 34 9.1% 25 11% 7.7% h 138 3.8% 86 9% 5.6% hTOTAL 213 6.0% 85 7% 2.9% h 4,935 5.9% -410 -3% -0.4% i

PROCESSING QUANTITATIVE METRICS SCORECARD: OTAGOVarious units as given; 2000-2018


15. SOUTHLAND – PROCESSING

Units (2018)





(00-18)

18y CAGR vs NZ



18y ABS(00-18)



18y CAGR(00-18)

18y CAGR vs

NZ average

Dairy 6 2.8% 3 3% 3.9% i 630 4.9% 210 4% 2.3% iRed Meat & Pork 24 7.3% 6 21% 1.6% h 3,600 13.5% -300 -25% -0.4% iPoultry Meat - 0.0% -3 - -100.0% i - 0.0% -85 -5% -100.0% iSeafood 27 8.3% 0 0% 0.0% h 255 5.0% -115 - -2.0% iProduce 6 1.3% -1 -2% -0.9% i 37 0.4% -18 -2% -2.2% iGrain-Based 7 1.9% -4 - -2.5% i 57 0.9% -97 - -5.4% iProcessed Foods 16 1.6% 4 1% 1.6% i 155 1.3% -8 0% -0.3% iWine 3 0.7% 3 1% N/A h 3 0.1% 3 0% N/A hOther Beverages 1 0.3% 1 0% N/A h 12 0.3% 12 1% N/A hTOTAL 90 2.5% 9 1% 0.6% i 4,749 5.7% -398 -3% -0.4% i

PROCESSING QUANTITATIVE METRICS SCORECARD: SOUTHLANDVarious units as given; 2000-2018


A3. ABBREVIATIONS

120

ABS Absolute change kg Kilogram

ANZSIC AU/NZ Standard Industry Classification L Litre

AU Australia m/ml Million

Australasia Australia and New Zealand MFtE Ministry for the Environment

b Billion MPI Ministry of Primary Industries

CAGR Compound Annual Growth Rate mT Metric Tonne

F&B Food and Beverage n/a Not available/not applicable

F&V Fruit and Vegetables Nec/nes/nei Not elsewhere classified/specified/indicated

FAO Food and Agriculture Organisation of the United Nations N/C Not calculable

FOB Free on Board NZ New Zealand

f Forecast NZD/NZ$ New Zealand Dollar

GEO Geographic (unit) T Tonne

Ha Hectare US/USA United States of America

HS Code Harmonized Commodity Description and Coding System US$/USD United States dollar

JV Joint venture Y Year

REGIONAL GROWTH OPPORTUNITIES

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