Feeding the dragon.

Executive Summary

The emergence of China as the largest consumer of food and beverage products has been a significant global mega-trend, one which has far reaching implications around the globe and in the international food and beverage industry. These developments will have a significant impact on food and beverage exporting countries, such as New Zealand, and will present opportunities for exporting firms to increase the value of their production.

This report investigates the Critical Success Factors of global firms which have achieved success in the China marketplace, and compares them against three of New Zealand’s food and beverage industries which have exports destined for China. The three industries include the Dairy, Red Meat, and Kiwifruit industries, which are important contributors to New Zealand’s total exports and have a significant proportion of their exports destined for China.

The Critical Success Factors chosen are characteristics, conditions, or variables of effective export marketing strategies, being; Understanding of the market, Selling and distribution channels, Promotion of a brand, and Collaboration.

Using these Critical Success Factors, this report compares the habits, trends and practices of recommended practice firms against three of New Zealand’s food and beverage industries. The report found that across the three New Zealand industries there are vast differences in approach amongst individual firms but also across each industry. The results of each industry could be linked back to the structure of the industry, as well as the culture of the industry. Of the three New Zealand industries, the Dairy industry was found to have the strongest coverage over all four Critical Success Factors, and also displays characteristics most in line with the recommended practice firms. There are factors in this industry which lead towards this, such as the industry being dominated by one large firm which has the resources, scale, and experience to lead the industry.

The Red Meat industry has traditionally been characterised by strong competition and barriers to collaboration within the industry, and this factor was quite evident during the discussions with firms in this industry. Though there are four large firms and a number of smaller firms in the industry which are selling similar products to the same markets, there is a lack of cohesion, industry collaboration and resource sharing, and an inability for branding due to each firm being unable to differentiate from another.

The Kiwifruit industry stood out as displaying strong habits in promotion of a brand and understanding of the market, which has been a result of the industry investing significantly in these two areas and having a focused approach of one product, one brand. This focus is further strengthened due to the structure of the industry being a single desk operator, which allows one firm to be responsible for all marketing, selling and distribution of product, and also allows it to gain scale benefits which are also similar to Dairy.

This report finds that three of New Zealand’s food and beverage industries involved in this research have shown habits which are consistent with international firms which achieved sustained success in China. Each of the three industries have areas to continue to develop across the Critical Success Factors of effective export marketing strategies to ensure they are cementing themselves in the China food and beverage supply chain, and in order to maximise the opportunities presented by the emergence of China as a consumer of sophisticated food and beverage products.

Feeding the Dragon – Jason Te Brake

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