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Deloitte report wins praise from Hawkes BayWine

The annual wine industry benchmarking survey is on the nail according to Lyn Bevin, executive officer of Hawke’s Bay Winegrowers.

“I would agree we are seeing a recovery, even if it’s slow to translate through to increased profitability to Hawke’s Bay wineries and growers. Looking into the recovery, Hawke’s Bay is positioning itself to make the most of improving conditions,” says Ms Bevin.

In the Hawke’s Bay Winegrowers annual report, chairman Nicholas Buck highlighted the region’s drive for quality as the reason behind increasing sales.

Over the last five years Hawke’s Bay wineries have reduced yields per hectare by 21 percent, improving ripeness and concentrating flavours. For the same period Hawke’s Bay red wine exports have increased 48 percent.

But don’t expect our region’s wineries and growers to be throwing the cash around says Ms Bevin.
“There is a long way to go – most of our Hawke’s Bay wineries fall into the smaller categories of under $5 million in total revenue and these wineries are barely gaining profitable returns.

“From the report bigger wineries are able to lower prices and combine bulk wine exports to their income mix. Smaller wineries also have proportionately higher administration costs to deal with and often owners don’t reimburse themselves at the rate of a commercial salary.”

She notes that like the Deloitte’s report, Hawke’s Bay Winegrowers remains concerned about the management of bulk wine exports and has brought this to the attention of the national body, New Zealand Winegrowers, several times this year.

Across all the wineries surveyed Deloitte reports that more than 50 percent of case sales of branded wine are exported.

“While we don’t have this sort of information for Hawke’s Bay this could also be true for the region”, says Ms Bevin.

“Having said that, Hawke’s Bay also has a significant number of very small wineries producing less than 5,000 cases per annum and they are more dependent on cellar door sales and wine tourism.”

The report encourages collaboration between wineries in international markets.

“We have been told this several times going back to the BCG (Boston Consulting Group) study in 2000 and a Massachusetts Institute of Technology Entrepreneurship Centre project in 2007, and the same message was delivered to regional wineries by Steve Green, deputy chairman of New
Zealand Winegrowers.

“Our Hawke’s Bay wineries aren’t competing against each other in the global market - we are too small for that. Instead the individual wineries must work together to gain critical marketing mass. We are a very diverse wine-making region, unlike any other in the world. What we have in common is Hawke’s Bay.”

According to the report, exchange rates are the biggest issue across most wineries but the second biggest issue is marketing our wine overseas.

Mr Buck agrees.
“Collaborative marketing is vital but can only be done in tandem with the industry’s own ability to fund activity. New Zealand Winegrowers have recently undergone a strategic review and we look forward to seeing what will be done to address these marketing concerns within the industry and management of bulk shipments.”

For further information:
Lyn Bevin
Tel: 027 621 7891


 

Strategic review provides framework for profitable growth of New Zealand wine

New Zealand Winegrowers has released the results of a Strategic Review of the grape and wine sector.

The review was conducted in the last quarter of 2011 by consulting firm Price Waterhouse Coopers.

The review recommended 10 new or extended activities and the winegrowers board has agreed to all these recommendations.

They include the development of a vineyard registry, increased resourcing for social responsibility initiatives, reprioritising marketing expenditure, improving geographical indication protection and focusing research on four key areas.

“The review is a comprehensive examination of the industry – how it has changed in recent years, the opportunities and challenges facing it, and the future role of New Zealand Winegrowers,” says chairman of New Zealand Winegrowers Stuart Smith.

“It provides a framework for the profitable growth of New Zealand wine. It confirms that New Zealand wine’s success to date has been founded on its reputation for high quality and distinctive wine styles.

“It argues that New Zealand Winegrowers must protect and further invest in that reputation to ensure a prosperous future. I believe that is a view
that will resonate well with grape growers and wineries,” he says.

Mr Smith says members would see significant changes as a result of the review.

“This is not a review that is going to sit on the shelf. We commissioned it with the aim of improving the services New Zealand Winegrowers offers to the industry, and the board has already moved to implement the recommendations.”

The report also recommended that New Zealand Winegrowers amend its governance structure to support its strategic priorities.

The Board has agreed to implement all the short-term governance changes recommended including reducing its size, consolidating its committee structure, developing succession plans for the executive team and improving its administration and introducing metrics.

The Winegrowers board has also put in place a comprehensive process to consult members on the remaining governance changes recommended by the review.

These include amalgamating the group’s two constituent bodies, reducing the size of the board further, adding independent directors, and rationalising the regional levy spend.

Wine industry members were briefed on the review outcomes in a series of nine workshops throughout New Zealand attended by chairman Stuart Smith, deputy chairman Steve Green and chief executive Philip Gregan as well as representatives from PWC.

“It is vitally important that growers and wineries understand the analysis that Price Waterhouse Coopers have conducted and the strategic initiatives they have recommended, so that the industry can take full advantage of the opportunities identified,” Mr Smith says.

Copies of the review are available from the New Zealand Winegrowers website – www.nzwine.com

For further information contact:
Stuart Smith, chairman: 027 540 1138
Steve Green, deputy chairman:
027 208 3194
Philip Gregan, chief executive:
021 964 564


 

Apple ban not totally lifted by Aussies

Apple CartoonBy Les Watkins

Apples from New Zealand are still forbidden fruit for many Aussies – despite their importation getting the thumbs-up from Prime Minister Julia Gillard.
A 90-year ban on apples from this country being exported across the Tasman was lifted on August 17, with Gillard’s approval, following a ruling by the World Trade Organisation.
The first consignments were then sent and Napier apple-growing brothers, Ross and Brue Beaton, reported that Sydneysiders loved the crunchy Pacific rose varieties they were giving as free tasters outside the city’s Opera House.
Horticulture New Zealand president Andrew Fenton says he is absolutely thrilled to see New Zealand apples being eaten in Australia.
“We want to congratulate Pipfruit New Zealand and all apple growers for their determination and patience. 
“This is a goal that has looked at times to be almost impossible to score, and they’ve finally done it. We are delighted for them,” he says.
But opposition to the importing of apples was fierce and a campaign against the lifting of the ban had already been spearheaded by the grower body Apple and Pear Australia.
Aussie politicians joined the battle and early in July John Cobb MP announced he was planning a private member’s bill which could prevent NZ apples reaching his country’s supermarkets.
Pipfruit New Zealand spokesman Peter Beavan denounced this as a bid to build trade barriers.
“We have a scientific process which has been proven and [has] supported New Zealand’s case for the past ten years,” he said. “Now the Australians are continuing to try and run political interference.”
While the Beaton brothers were winning new friends with their free apples, the two main supermarket chains, Coles and Woolworths, said they could not sell NZ apples.
Within days of the ban being lifted the South Australian supermarket chain Foodland also announced it would not stock NZ apples. Spokesman Russell Markham said this decision had been made to support the local apple-growing industry.
Australian growers are now demanding tougher inspection rules after some leaf matter and a dead insect were found in a consignment destined for export.
Australia’s Quarantine Inspection Service confirmed a shipment had been rejected and Apple and Pear Australia described the failed inspection as “extremely disturbing”.
The chief executive of the Apple and Pear Growers Association of South Australia, Greg Crammond, says the possibility of this type of material being in packing boxes poses a great risk of fire blight being transmitted.
But Pete Beavan of Pipfruit New Zealand is confident protocols are working and that there is no risk to Australia.
A recent survey of 1,000 Australian shoppers by Pipfruit, showed that 46 per cent believed NZ apples had always been available to them.


 

A note to the deliberately deaf

By Les Watkins

Exporters will be glad to learn that one of Australia’s best-qualified commentators on agribusiness has defended them – by endorsing an opinion first aired in FOODtechnology.
Our July issue cartoon by Jamie Laurie swiped at Aussie wine makers who’d banned Kiwis from major competitions because they were winning too many awards.
It depicted a sour-faced Ocker saying: “Now let’s move on to banning the All Blacks playing here – they’re starting to win a bit too often.”
Marketing guru David Leyonhjelm amplified that theme while writing about the apple row in the respected Business Spectator.
“Imagine our rugby and cricket teams decided that defeat by teams from other countries, particularly New Zealand, was intolerable and convinced the government to prevent them from playing in Australia,” he said.
“Or, if they were allowed to come, they first had to pass impossibly stringent health checks that kept them out anyway…
“That is what has been occurring in key parts of our horticulture sectors. While the Kiwis have been busy competing in international markets and maintaining their competitiveness, Australian producers have focused on domestic markets and keeping foreigners out.
“The result… is that New Zealand fruit and vegetable growers are in better shape than ours.”
Fire blight on apples, in his view, “is not the threat it is made out to be”. The real issue is Aussies not being internationally competitive.
“Our problem is that many of our producers… have become unfit and complacent.”
In addition to starting to be more innovative in growing, harvesting and processing, he added, they should “follow rugby’s lead by stealing one of NZ’s coaches – in the form of someone who knows how to sell produce into export markets.”
As Fred Dagg sagaciously says, that’s the story – a verdict which should be heeded by the deliberately deaf.


 

Slippery future for potentially lucrative export

NZ Longfin EelsBy Les Watkins

Two mothers had offspring within minutes of each other for the first and only time in their lives. One was 15 years old and the other was nearly 100.
That age gap was not the only remarkable feature of this double event. Neither mother, nor any of the others around them, produced just twins or triplets – not even dozens or scores of little ones. Each had at least two million and possibly as many as five million.
Those astronomic figures confirm that, thanks to Kiwi ingenuity, our exports could have a multi-million-dollar annual boost. But one of the country’s most renowned experts warns that lack of financial support from the Government could result in the benefits going instead to China.
The mothers are New Zealand longfin eels which can grow to 1.6 metres and weigh up to 40kg. The babies, known as glass eels, are worth a fortune on the international market, particularly in Japan where, after being farmed and grown for six months, they are considered a great delicacy.
Top eel authority Dr Paul Decker, director of a specialist research unit at Warkworth’s Mahurangi Technical Institute, says that eels worth $3 billion are eaten worldwide each year and that NZ’s export figure is about $8 million.
That export income could eventually soar to billions, he says, if funding were available for his team to expand its successful research – with NZ then being able to sell vast quantities of glass eels to ready worldwide markets.
“But it is now starting to seem that this benefit will be lost to New Zealand – going instead to China,” he says.
Achievements at Warkworth, which have brought would-be investors from China, include the ability to fertilise and hatch virtually all the two million or so eggs produced by a female and keep the babies alive for up to 12 days. That is the age at which they develop a mouth.
“Eels are born without mouths or eyes, and initially they feed off their yolk sacs,” says Dr Decker. “Our next task is getting them to feed.”
Another aspect of the problem is explained by NIWA principal scientist Dr Don Jellyman, another world-acclaimed authority, who has studied eels for 40 years.
“The food that then is given to them is the powdered egg case of a shark and long term that is not a sustainable source of nourishment,” he says. “We have to find something more readily available to wean them on to a different diet.”
“Getting nearly all the babies to this 12-day stage – after managing to hatch them at any time rather than being restricted to the limited natural season – is something no-one else has managed,” says Dr Decker.
“But, the additional research needed to get to the next stage, growing them until they’re big enough to be sold for farming, is extremely expensive and our project at Warkworth is entirely privately funded.
“Government research agencies describe the project as ‘worthy of funding’ but say that they do not have any budget for such funding.
“A Chinese delegation has now asked if we will let them fund the project through to completion. The fish-hook is that they want us to move the work to mainland China.
“That would be bad because, with the world’s eel population seriously declining, growing glass eels to the stage where they could be exported for farming overseas would have enormous export potential for New Zealand.”
At present eel meat is being exported from NZ at about $12 a kilo. But the price for a kilo of glass eels hatched in captivity – with about 5000 in a kilo – would be about $2,000.
“And the international market is going to get better and better for sellers,” says Dr Decker. “The number of wild eels is tumbling globally because of factors such as pollution and sprays, as well as dams and other obstacles which make it difficult for them to travel to their spawning areas.
“We’ve ripped out their habitat something fierce. We allow dairy cows to graze on river banks and councils spray the willows around those banks – destroying the root systems where the eels live –and what do we replace them with? Nothing! That’s what. So there’s a bleak future for wild eels.
“In Europe they’ve lost 95 per cent of the eel population in the past 20 years and I foresee the time when none will come from there.
“Many countries which have been exploited are cracking down because of this problem and so, because of our work at Warkworth, New Zealand could be a big player worldwide in the provision of captive-bred eels for overseas farmers.
“It would be rather like a global chicken market – with us exporting the young for others to farm and develop. And that would be very lucrative indeed. So we’re desperately hoping that we can keep this as a business for New Zealand.”

Longfin eels take about five months to swim the 5000km from NZ to their spawning grounds around the Pacific Islands.
Females mostly live twice as long as males and make this journey at almost any stage between the ages of 15 and their maximum of about 100 years. After laying one mammoth batch they die.
Small longfins feed on worms, water snails and insect larvae. They later feed on fish, fresh water crayfish and small birds such as ducklings.


 

‘Ugly fish’s’ export potential

MonkfishBy Les Watkins

A deep-sea fish often described as ‘nightmarishly ugly’ may soon be boosting the country’s export drive.
It is the New Zealand monkfish, scientifically known as Kathetostoma giganteum, which is common around the South Island.
The taste and characteristics of its pearly white firm flesh has earned it a reputation as the poor man’s lobster.
Auckland businessman Kenny Jeong is now hoping that will win it approval in South Korea – a country which annually imports 19,000 tonnes of monkfish, worth more than $75 million.
“Monkfish is regarded as a great delicacy there and thousands of restaurants in Seoul, the capital, charge between $50 and $90 for braised spicy servings,” says Mr Jeong who runs the export company NZ Blue Trading. “It has a good rich taste and is a wonderful source of protein.”
“But there are more than five types of monkfish and most of those sold to South Korea are from China, Brazil and the United States. The New Zealand version differs a bit from them in appearance and the texture of its flesh is also different.
“That’s a concern for me, of course, because we have to see if the South Koreans will accept a little change in the texture and taste.”
He expects to have the answer soon, having exported a trial consignment to test the market.
“The potential is huge if they do like New Zealand monkfish,” he says. “In fact, we might well be striking a goldmine.”    
And if he scores in South Korea he will be aiming to secure other export destinations for this NZ fish.
Possibilities are enhanced by Mr Jeong being able to undercut suppliers from America – charging $5 a kilo compared with their price of $7 – and by a fluctuating local harvest off South Korea.
“The New Zealand monkfish also has another advantage,” adds Mr Jeong with a smile. “Although it is very, very ugly – that cannot be denied – it is still more beautiful than its cousins from America or China.”


 

The push for value added exports gets underway

FoodBowlBy Les Watkins

The food and beverage sectors begin an earnest attack on a target of $160 billion worth of processed food exports by 2025.
Plans to dramatically increase the level of New Zealand’s food and beverage exports – which already account for more than half the country’s trade earnings – are being made by industry experts with multi-million support from the government.
The goal is a jump of 270 percent to an annual total of $159 billion by 2025.
A landmark step towards achieving that target came this month when the long-awaited FoodBowl, run by New Zealand Food Innovation (Auckland) Ltd (NZFIA), became operational at its purpose-built facility near Auckland International Airport.
The Foodbowl is a key feature of NZFIN, a nation-wide open-access network of innovation centres, designed to provide comprehensive food science and technology resources.
This pioneering facility is the second recent major advance benefitting the food industry.
The other is New Zealand’s first state-of-the-art UHT aseptic PET bottling plant at Whakatu Industrial Park near Hastings, which was opened by Prime Minister John Key in September.
In addition to ensuring that bottled milk and juice products are shelf stable without refrigeration for up to 12 months, this plant will be the first in the world to produce UHT liquid infant formula in a patented teat cap PET bottle.John Key at the UHT aseptic bottling plant
The value of the FoodBowl to the New Zealand economy was stressed by board chairman Tony Nowell in an earlier exclusive interview with FOODtechnology.
 He explained that the centre will provide experts to advise on a great spectrum of matters – including packaging, marketing and finance – in addition to those concerning production techniques and advances.
“Of the 1,840 food manufacturing companies in New Zealand, 55 percent employ more than five but less than 100 people,” he said.
“As a result, these companies often don’t have the infrastructure or expertise to accelerate product development, develop foreign markets and maintain an in-market presence.
“At the moment, if a New Zealand manufacturer wants to try a new idea, ordinary production must be halted – which is costly – or capacity hired in pilot facilities overseas.”
Now that can be done at far less expense at the FoodBowl which was built and equipped at a cost of $16 million – with the government contributing $9.4 million and Auckland City Council providing $2.5 million.
“So the resources of the FoodBowl will overcome a critical deficiency in New Zealand’s new product development process – the ability to upscale sophisticated new products from laboratory to commercial production – and will fill the gap between the idea stage and getting successful production on market shelves,” says Mr Nowell.
“It will also help manage the risks of innovation by minimising capital and expertise investment until products and markets are proven.”
Eventually there will be four innovation centres in the nation-wide network.
Those at Palmerston North and Canterbury were the first to start operating and the Waikato one is scheduled to open mid-2012.
Each will have a distinctive focus.
Palmerston North draws on the expertise of 600 scientists and technologists including specialists at Massey University, Riddet Institute, AgResearch, Plant and Food Research and Fonterra Innovation.
Canterbury concentrates on the particular needs of the South Island and helps with overseas marketing as well as production.
Waikato will specialise in dairy. This is immensely important as New Zealand’s annual dairy exports now top $12 billion – and there are opportunities for major expansion.
This importance is reflected in the fact that Waiktao Innovation Park’s parent company, Innovation Waikato, has formed a subsidiary – NZ Food Innovation Waikato.
This subsidiary will own and operate the NZ dairy industry’s first independent product-development spray dryer. It will have the capacity to deal with half a tonne an hour and will be suitable for manufacturing fruit and vegetable powders as well as whole milk powders.
Former government food safety auditor Neil McGarva is the managing director of Etika Dairies NZ Ltd which owns the new UHT aseptic PET bottling line opened by John Key.
He says its cold-filling technology allows for the use of lightweight bottles which cuts energy consumption as well as reducing the amount of material used and, more importantly, the method results in fresher food without the need for preservatives.
Mr McGarva adds: “We are delighted that even before we opened most of our initial capacity had been pre-allocated and plans are already afoot for a second line which will see capacity increased from 6,000 to 30,00 bottles per hour.”


 

Export wine testing facility for Marlborough winemakers

Wine ExpertCawthron recently announced the opening of its dedicated Marlborough export wine laboratory.
The facility at Grove Town Park means Cawthron can provide an internationally accredited testing service for EU and other export market certification right in the heart of New Zealand's largest wine growing region.
Cawthron Analytical Laboratories customer services manager, Augusta van Wijk says Cawthron recognises the importance of the industry in Marlborough.
"We value these wineries so much that we decided to reflect that commitment and develop a specialised laboratory testing service right on their back door step. The Cawthron Marlborough wine testing laboratory is about taking our expertise to where it's needed."
The new lab is staffed by a dedicated team who has been working to establish both the testing procedures and the new equipment over the past six months. The purpose-built laboratory has recently received IANZ accreditations and MAF (NZ Food Safety Authority) approval. It has state-of-the-art testing equipment that has given impressive results in extensive comparative calibration testing with international laboratories, ensuring customers are receiving quality results. Augusta says it was a logical decision to set up a specialised export wine lab in Blenheim.
"Over two thirds of our wine testing samples come from the Marlborough Region, so it was logical for Cawthron to invest in testing facilities that would be closer to the winemakers of the region." Export testing for wine will also continue at Cawthron's Nelson site. The new lab provides comprehensive wine analysis for export certification. The EU export certification tests include the measurement of sugars, alcohol, volatile acidity, sulphur dioxide, total acidity, citric acid and dry extract.
Cawthron Marlborough wine testing laboratory supervisor Sam Murray says they are looking forward to being able to provide a fast, flexible and personal service to the Marlborough wine industry. "One of the benefits for our clients of us being 'just down the road' is that they can pop in to discuss the testing and results. It's all part of the great service we provide to the industry."

For more information:
Augusta van Wijk, Cawthron Laboratory Services
Tel: 03 548 2319 ext 329
or Email: Augusta [dot] VanWijk [at] cawthron [dot] org [dot] nz


 

Good times for Waikato dairy farmers

The record year for dairy production has meant dairy farming has generated $3.4 billion dollars in revenue for the greater Waikato region.
DairyNZ chairman John Luxton told the organisation’s annual meeting in Hamilton that last year was a record for milk production nationally, and in the North Island it was due to an increase in production per cow, in particular in Waikato, Bay of Plenty and Northland.
“The recovery from the Northland drought of the year before saw an increase of more than 10 percent in milk production there, while the Bay of Plenty and Waikato increased by 5 percent and 6.4 percent respectively, with a very favourable autumn as the main contributing factor there,” he said.
“That increase in production has meant an increase in revenue for the regions as well. As an example, in the Waikato with milk price at $6.37 for 09/10, dairy farmers generated $2.5 billion dollars. This last year, with an increase in milk price and production, $3.4 billion was generated. And that’s just revenue from farming alone – the contribution of the processing side of the industry is also substantial.”
Mr Luxton says while dairying still has great potential in the North Island, the challenge ahead for the industry is how it manages its nutrient footprint while still realising the benefits in dairying, particularly in sensitive catchments.
“We’re making some excellent progress in this area, with examples such as the Lake Rotorua Dairy Collective, but there’s still a lot of work ahead of us,” he said.
Mr Luxton was re-elected as chairman of DairyNZ for a further three-year term, along with incumbent director Michael Spaans. Woodville farmer Ben Allomes was also elected, replacing Kevin Ferris.
Two postal resolutions were also passed at the meeting, one ratifying an increase in directors’ remuneration, the other ratifying the appointment of independent director Barry Harris.


 


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