What is the value of New Zealand food exports?

New Zealand exports around NZ$40bn (€24bn) worth of food products annually. We estimate this is enough food to feed 35m people. New Zealand contributes about 0.5% of global food supply, so we’re actually a very niche player in the global food system.

How challenging is it capturing more value from the market?

Based on a multiplier effect, we believe New Zealand’s $40bn in food exports will retail in supermarkets and restaurants for $250bn. That’s a multiplier factor of 6.75 times.

We are very poor at capturing more of the value we grow. Typically, our primary industry captures just 10% to 30% of the retail value of our products. Zespri, the kiwifruit company, is probably doing the best, taking close to 30% of the retail value for Sungold kiwifruits, whereas the dairy companies are more likely capturing less than 10%.

How is agriculture perceived in New Zealand today?

The rural-urban divide in this country has become a chasm. We’ve had very high immigration in New Zealand and many people in our cities have no connection to the land anymore.

About 25% of the population in Auckland today are recent Asian migrants. At the same time, our mainstream media has become quite anti-agriculture because of water and animal welfare concerns, leaving many farmers feeling like they are farming in a fishbowl.

Where do you see the future for New Zealand’s dairy industry?

We need a rethink of our strategy. In China, for example, which is one of our most important dairy export markets, one of their biggest challenges is fresh water availability. But we’re supplying China with powdered milk and asking people to use their limited fresh water to rehydrate our milk. Disruption in the Chinese market is selling liquid milk products, which helps solve a key consumer issue.

What lessons can the Irish dairy industry learn from New Zealand?

If you’re building processing volume in dairy, you’re largely committing yourself to a particular range of products. But, more importantly, you’re constraining innovation. If you build a butter factory, you are committed to making butter. New Zealand has been good at building stainless steel, but not so good at investing in intangible assets; brands, people, innovation. We created a dairy industry that’s the most efficient in the world at producing commodity products. However, these are often low-value products that do not enable us to stand out in the market. To me, the future of dairy is nimble, virtual, consumer-led businesses and we are starting to see some of these develop.