What factors make this industry attractive and/or unattractive?
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In New Zealand, one out of ten people work in the food industry. According to Coriolis Research limited, the industry provides employment to almost 20% of the working population. The employment is available in various sectors, for instance, food production, manufacturing, wholesaling, and export sectors (2005, p.12). The food industry is pertinent since New Zealand has a long history of fruits production. In addition, nearness to Asians markets, which offer a significant differentiation of excellent food quality and cost models, makes the country’s food trade activity run smoothly, especially in the side of exports.
For those interested in investing in the food production industry, the climatic setting of New Zealand cannot transparently let them down. This claim holds based on the excellent soil characteristics bearing of New Zealand that favor the production of food. However, in China, increased production of wine grapes, apples, compounded by the escalated transportation costs amongst others, is an obstacle that increases competition in the process of providing the products in Asian markets. With respect to Research and Markets, New Zealand experiences fragmentations of the food industry. It is unable to provide fruits all year round while not-negating its elevated standing in terms of costs compared to other producers such as Chile (2011 Para.5).
What opportunities do you believe this industry holds for the future?
The industry holds a myriad of potentials in the future for both the entrants and existing businesses in the food industry. The meat industry, for instance, has an ever-increasing growth in consumption and income in the Asian nations. This stands out as an indispensable business focus for New Zealand food products. In addition, the ongoing tremendous increase in global foodservice sector may have the capacity to make provisions for sensational business opportunities for both domestic and export markets. According to Coriolis Research limited, Moves to establish integrations with Australia, coupled with the exemplary desire to provide leaner meat, (2005, p.87) constitute incredible opportunities for the entrants and those who may want to upgrade their production protocols, as they endeavor to catch up with the needs of the days ahead.
However, it is crucial to consider the trends in the market for some selected products, as a way of giving a rather precise picture of the New Zealand food products markets. According to the government statistician, Geoff Bascand, amongst the five food subgroups, four of them had recorded a decrease in price. For instance, more discounting on poultry had resulted to a fall of the price of poultry products by about 0.9% as per September 2011s. In the financial year, ending in august 2011, all grocery foods were up by 6.6%. Vegetables and fruits hiked by 13.2 %. Food, ready prepared to eat in restaurants, was up by 4.2% with fish, poultry and meat shooting by 5.0% (Bascand, 2011, Para.4). Finally, all non-alcoholic drinks went up by 6.6 %. Wholesaling went up during the same fiscal year (Welch, 2011, Para.3).
With this picture in mind, the cost factor pre-bargains making of a decision on the opportunity to pursue such a line of business. Evidently, the new entrants need to pursue those opportunities with minimal costs of production with high capacity for demand. The current members in the industry need to consider expansion of their food business specialty appropriate in an attempt to take advantage of the economies of scale. This follows given that the global integration of food markets amid the booming shortages of food commodities globally can create more demand for such products in the international food market fronts. Another opportunity is to consider expansion of retails shops to wholesales. This is a tremendous venture for current members of the industry.
Bascand, G. (2011). Food Prices Index-Media Release. Web.
Coriolis Research Limited. (2005). Mapping the Structure of New Zealand Food and Beverage Industry. Web.
Research and Markets. (2011). New Zealand: Food and Beverages Industry. Web.
Welch, D. (2011). Wholesale Trade Survey: June Quarter – Media Release. Web.