22 Oct 2013

NZ must have scale to prosper in emerging food markets - analyst

3:37 pm on 22 October 2013

An expert on global food marketing believes New Zealand is well positioned to benefit from the rising population and incomes in some key emerging markets.

But visiting professor from the Royal Agricultural University in Britain, David Hughes, says it's not going to be a smooth ride.

He says New Zealand farmers and companies need to have their acts together and structure sorted.

In a presentation to kiwifruit growers in Bay of Plenty this week Professor Hughes said large multinational businesses will dominate food sales in China and other developing markets.

And he says New Zealand companies need to be of sufficient scale and configured in ways to do business with them.

He says farmers need to be horizontally integrated - as they are with Fonterra and Zespri - in order to do business with the giant retailers, like Tesco and WallMart which are setting themselves up in China - with local partners.

"Develop those relationships as soon as you can because successful relationships amongst other things have longevity, so get there early and stay long," he says.

Professor Hughes says in a world of 'big boys and girls' an individual farmer has no chance in this market.

"An individual farmer needs to be linking arms with other like-minded producers to put together a really, really, strong offer."