18 Feb 2014

Emerging markets 'best for premiums'

6:45 pm on 18 February 2014

New Zealand's reputation as a producer of wholesome, safe and environmentally-friendly food could add more of a premium to its products in emerging markets than in the United Kingdom.

That's one of the the findings from an initial study carried out by Lincoln University's Agribusiness and Research Unit, which surveyed 600 consumers in each of three markets: China, India and the United Kingdom.

Lincoln's Caroline Saunders says the research shows consumers in China and India value environmental quality and food safety more highly that those in the UK - and are prepared to pay for it too.

Dr Saunders says Indian and Chinese consumers are prepared to pay about 75 percent more for product, compared to 16 percent in the UK. She says that's because they value attributes such as pesticide-free, GM-free and organic.

She says food companies here need to do their homework, to celebrate what New Zealand is doing when selling into those markets and getting the appropriate premiums.

Dr Saunders says a more in-depth three-year project will now begin.

One area it will look into is how New Zealand food companies, which are often ingredient suppliers, may be able to capture the premium through tools such new media and the use of smart phones.