Value-added food and beverage exports from NZ on the rise

- Last updated on GMT

Related tags: International trade, Export

The proportion of value-added food and beverage products exported
from New Zealand has continued to rise steadily against commodity
products, with the value-added sector enjoying growth of nearly 10
per cent in the past five years.

A study by Massey University for New Zealand Trade and Enterprise (NZTE) has found that earnings from value-added food and beverage exports grew to $8.11 billion, or 54 per cent of all food and food ingredient exports, for the year ended June 2004.

The earnings from value-added exports in 2004 increased from $7.6 billion in 2003, a rise of 6.7 percent over the 12 months.

The study has been carried out annually since 2000, giving researchers the opportunity to directly compare results. Overall there has been a 53.6 per cent increase in revenue from value-added products since 2000 and only a 5.3 per cent rise in revenue from commodity exports in the same period.

"Increasing value-added exports is vital to meet the challenges the food and beverage sector faces from fluctuating commodity prices and foreign exchange movements,"​ said NZTE's head of food and beverages, Rod MacKenzie.

"We welcome the ongoing shift to exporting innovative new products that can command higher, more sustainable prices in world markets."

MacKenzie added however that export data cannot give an indication of the level of innovation in the food and beverage sector overall.

The study uses a mix of export data (over 1500 HS customs codes), industry identification and financial analysis tools to define the dollar and percentage values of added-value and commodity food products in key export categories.

The study breaks down value-added percentages in the main export categories of meat, dairy, fruit and vegetable, beverages, cereals, seafood and miscellaneous and found that the biggest increases in 2004 came from the dairy and meat sectors.

Export revenue earnings in the meat sector rose from $4.30 billion in 2003 to $4.7 billion in 2004, with value-added products accounting for well over half of the increase.

While revenue from dairy products fell overall in the year, the report indicates the sector actually increased exports of value-added products by 20 per cent compared with 2003, 'a remarkable response' in a trading climate where commodity revenue continued to decline.

Professor Ray Winger, from the Institute of Food, Nutrition and Human Health at Massey University and project manager for the research, says the results are encouraging.

"During the five years this study has been carried out, different sectors showed a range of value-added from 23 per cent to 79 per cent, indicating that the New Zealand food industry has a high level of value-added products."

"There is clearly a growing sophistication in product development and marketing innovation which is essential for long-term sustainability and to deliver what markets and customers want."

The full report is available at www.nzte.govt.nz

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