This was detailed in The Investor's Guide to the New Zealand Food and Beverage industry 2020, commissioned by the New Zealand Ministry of Business, Innovation and Employment (MBIE) and compiled by food industry consultants Coriolis Research.
“In the past two years (FY2017 to FY2019), Zespri generated one of the largest amounts of growth [for a local F&B firm] in the country at NZ$815mn (US$472.8mn), [banking on] strong kiwifruit volume and value growth [as well as] growing export volumes, particularly to Asia,” said the report authors.
“Coming in behind Zespri was The A2 Milk Company with NZ$754mn (US$437.4mn), [which showed] strong sales growth in Australia and China driven by infant formula and fluid milk.”
Of note is that dairy giant Fonterra was listed as having seen revenue growth of some NZ$3.23bn (US$1.87bn) but was not highlighted as Zespri and A2 Milk were in the investment guide report.
This omission may be attributable to the fact that Fonterra made consecutive losses for the past two years: NZ$605mn (US$350.7mn) at end-FY2019, and NZ$196mn (US$US$113.6mn) at end-FY2018 – unlikely to look good in a report hoping to attract either local or foreign investors.
Conversely, Chinese dairy giant Yili was given special attribution for having ‘stood out’ in the country by ‘consistently creating growth over the past decade’, with some NZ$982mn (US$568.8mn) to its name in the short five years between 2014 to 2018 that it has invested in the New Zealand market.
“New Zealand continues to be an attractive investment destination for global food and beverage multinationals seeking growth,” the report added.
“An incredible range of multinational food companies are currently invested in New Zealand food and beverage [such as] Nestle, PepsiCo, Coca-Cola and more.”
Amongst these were the world’s second largest global coffee company JDE, which acquired local New Zealand brand Bell Tea in 2017, consequently driving its value up by NZ$73mn (US$42.3mn) to hit NZ$124mn (US$71.8mn) in 2018, more than double its original value of NZ$51mn (US$29.5mn) and consequently also strengthening its place in the local market.
The A2 Milk Company’s high placing in terms of growth can be seen as one of the country’s major homegrown success stories, considering that in 2000 it was just a start-up.
“The New Zealand food and beverage industry has demonstrated an ability to nurture start-ups to NZ$100m+ (US$58mn+) over the last 20 years, [such as The A2 Milk Company],” said the report authors.
“Over the past decade, A2 has achieved over 6,000% of revenue growth, from NZ$200,000 (US$116,072) in 2010 to NZ$1.30bn (US$757mn) in 2019.”
Such success stories were attributed to the country’s ‘proven local capability to create and scale rapidly’, in addition to ensuring ‘low/no local lag in launching new, on-trend products’ and being open to more investors from more places, especially overseas ones.
“[We’re looking at] more diversity [and a] seismic shift from Anglo-European to Asian [in] terms of investors and markets,” said the authors.