Food and beverage producers need to be bulletproof

29 October 2013

New Zealand food and beverage producers need to be bulletproof

New Zealand food and beverage producers need to ensure their operations are “bulletproof” if they want to compete in an increasingly aggressive global marketplace, an industry expert says.

Grant Thornton New Zealand Partner and National Leader, Food and Beverage, Simon Hunter, is describing the firm’s latest International Food and Beverage sector report, 'Hunger for growth: Food and Beverage looks to the future’, as a wake-up call for the local industry.

The report, based on interviews with 248 senior executives in seven countries (including New Zealand), says 90% expect revenues to increase in the next 12 months but only half expect to employ more people.

Hunter says there is an international push for efficiency in the food and beverage sector, which is enjoying renewed confidence and anticipating a 50% increase in consumer demand over the next 20 years.

But he is warning New Zealand companies that their share of any spoils cannot be guaranteed.

“It’s all very well to look at these new opportunities and see the richness in them for New Zealand’s food and beverage sector, but unless you face up to the challenges and issues that come with growth, and can be bullet-proof in your execution, you won’t come out on top.

“This covers the likes of labeling, cost management, supply chain and being on time.”

Hunter says an “explosion of data” is one of the challenges facing producers.

“In the environment we now have, there has been an increase in the complexity of the supply chain which makes it harder to be bullet-proof. Companies have to figure out how they manage matters such as transparency and traceability.

“The number of tests you can do on food and beverage is increasing. A lot of these tests never existed 10 years ago but now, for example, anyone can find out how much fertiliser went into producing a certain product.

“New Zealand companies must perform highly in terms of their production, supply chain and customer fulfilment, and keep a very close eye on cost, accuracy, agility and integrity.

“It’s a nasty tough environment. If you make a mistake, your competitors will make a play at it.”

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