NEWS -- NZ agri-sector challenged to find its ‘missing’ share of 0.25 trillion

Agri-sector defied to find missing 0.25 trillion

The New Zealand agri-sector has a huge opportunity to reap billions in additional earnings each year – by capitalising on emerging trends disrupting global markets.

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Global Head of Agribusiness, Partner - Audit

KPMG in New Zealand

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That’s the challenge laid down by Ian Proudfoot, KPMG’s Global Head of Agribusiness. He is the author of the latest KPMG Agribusiness Agenda, released today, which highlights the huge gap between our export earnings and the end-value of our products.

“New Zealand exported a total of $37 billion in agri-food products in 2015,” says Proudfoot.“

Yet KPMG estimates those same products ultimately generate more than 0.25 trillion dollars in retail sales when sold to consumers around the world. The fundamental question is, how do we capture our fair share of that quarter of a trillion dollars?”

The answer, says Proudfoot, is for the sector to forge new pathways to market that close the gap between the producer and the end-consumer.

“The value is clearly there. The only constraint is that because of our history, we don’t currently occupy or control the parts of the value chain that create the most value.” 

The Agenda identifies a number of emerging, disruptive trends that are re-shaping the global agri-food sector. For instance, technology is enabling any producer to become a ‘local’ food supplier to the world, as long as they have an authentic product story and can verify the quality. Another future trend is for consumers to demand highly-personalised diets, to address their health concerns, which can be delivered via 3D food printing.  New Zealand should also be exploring emerging opportunities in cultured farming, where animal proteins are grown without the environmental and ethical concerns of growing the whole animal.

“If the New Zealand primary sector can be first to capitalise on these and other emerging trends - and shape our industry in response - we can become the world’s leading agri-food sector within the next 20 years,” says Proudfoot.

“It is completely achievable; but it will require a concerted, collaborative effort from everybody involved in the industry. Sector leaders need to set bold targets for 2036, and get all New Zealanders on board with their strategy, starting today.”

According to Proudfoot, the improvement in dairy prices indicated by last week’s auction, while welcome, is no cause for complacency. 

“When the world is on the verge on an agrarian revolution, we cannot afford to believe that the markets we have supplied for decades will still be available to us next year,” he says.

“In the greater scheme of things, a shift up or down in commodity price is not something we can control. It’s critical the New Zealand industry stays focused on the bigger picture...and the much, much bigger prize.” 

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