Week in Review

Food Retail is the hot topic in New Zealand and international headlines this week. Domestically we hear about the growth in omnichannel food sales, an upcoming strike proposed at Countdown in Auckland, and IRI’s ranking of the top 25 FMCG manufacturers.

Internationally the competition amongst retailers intensifies for ultra-fast delivery as the 2-3 hour model in some major cities is facing disruption by grocery deliveries as fast as 15 minutes after ordering. 

Article of the Week

This week KPMG Propagate Advisor Lincoln Roper shares an article on why it’s critical to reach outside of your bubble when making decisions, and this additional value this can create. 

You can access the article here.

Spotlight Stories

International Spotlight:

Banana sector ‘ripe for innovation’ amid price wars and disease threat [23 November, Food Navigator]

Exploiting wild banana varieties may yield a solution to the new strain of the fungus TR1, which wiped out the Gros Michel banana in the 1950s, and provide consumers with new tastes and eating occasions for bananas. Bananas are not doomed according to Nicolas Roux, a senior scientist and Banana Program Leader at Bioversity. But their survival depends largely on retailers and consumers being prepared to pay more for their bananas, and the sector exporting different varieties.  “We may find some small bananas or red bananas in specialised markets already today,” he said.

Tag: International, Horticulture, Environment & Emissions

Biotechnology Spotlight

NZ scientists exploring gene-editing tech for possum eradication [18 November, NZ Herald]

Scientists are investigating new genetic technologies that could help rid New Zealand of possums by 2050 but would require “wider public conversation” and specific regulatory changes. The new method involves targeting and transplanting immature sex cells of possum pouch young, rather than embryonic cells, before they develop into eggs or sperm. PF2050 Ltd's science director Professor Dan Tompkins says possums remained a serious economic and environmental threat, making their eradication a national priority.

Tag: Biotechnology, Policy and Regulation, Environment & Emissions, Research & Development

This Week's Headlines

headline 1

Who topped IRI’s annual top 25 FMCG manufacturers list? [22 November, Food Ticker]

According to research firm IRI, there has been some movement in the top 25 New Zealand FMCG manufacturers for 2021, with Goodman Fielder knocking British American Tobacco from its number 1 ranking. Overall, the top 25 sales decreased by 1.2% to now have a 40.5% market stake, while medium-sized manufacturers grew 3.4% to hold 36.1% of sales, and small companies increased 5% to account for 8% market share.

Tag: Shopping & Retail, Food Marketing

headline 2

The eight key issues the Groundswell group is protesting about [20 November, Stuff]

The Groundswell “grassroots rural movement” behind nationwide protests on Sunday wants changes made to eight areas of government policy. It lists the eight “requests” it is making to the Government in a position statement and are as follows: national policy statement on freshwater, national policy statement on indigenous biodiversity, significant natural areas, bringing in seasonal rural workers from overseas, emissions trading scheme, crown pastoral land reform bill, clean car package, and three waters reform.

Tag; Policy and Regulation, Farmers & Producers, Rural Communities

headline3

Milk and eggs in 15 minutes: The $1tn battle for ultrafast delivery [22 November, Nikkei Asia]

Born from the Covid-19 pandemic when people stayed at home, ultrafast delivery services that deliver groceries within 15 minutes are rapidly spreading in major U.S. cities and have the potential to transform the US$1 trillion groceries industry. Typically, same-day delivery from major retailers takes one to two hours, but startups are pioneering a new mode of consumption that allows people to buy only what they need when they need it. These companies include Buyk, Robomart, and Fridge No More.

Tag: International, Shopping & Retail 

Top stories

Sanford preps new strategy as earnings fall 39% [18 November, Food Ticker]

Sanford is developing a new strategy to rebuild profitability after facing a second year of Covid-19 related impacts that saw its earnings before interest and tax fall 39% to NZ$23.3 million in 2021. Chief executive Peter Reidie said the group has “clear strategic priorities for 2022” which include growing developing opportunities in wildcatch, retaining salmon profitability, and “preparing for future growth and establishing cross-business fundamentals such as performance culture and risk management executional excellence and more.”

Tag: Fisheries, Trade & Exports        

 

It’s a bug’s life: Aussie startup enlists insect army to tackle food waste [18 November, Stuff]

Melbourne-based startup Bardee has developed technology that can transform waste from supermarkets and food manufacturers into nutrient-rich fertiliser and pet products with the help of 1 billion black soldier fly larvae. Chief executive Phoebe Gardner says Bardee’s processing plant breaks down food waste much faster than commercial composting, preventing the CO2 emissions that occur when food products are left to break down naturally.

Tag: International, Environment & Emissions

Australian beer makers fight climate change by feeding carbon to algae [18 November, Reuters]

To combat climate change, Australian brewers have begun capturing carbon dioxide created by fermenting hops and feeding it to micro-algae. Young Henrys brewery in Sydney teamed up with scientists to set up two "bioreactors" filled with trillions of the tiny organisms. Inside the two 400-litre bioreactors, the algae absorb the carbon, then reproduce and transform it into oxygen. Each bioreactor produces as much oxygen as two hectares of bushland, co-founder Oscar McMahon said.

Tag: International, Environment & Emissions

Alliance reports 53% increase in profit [22 November, Farmers Weekly]

Alliance has overcome a challenging year, reporting an increase in profit from NZ$27.3 million in 2020 to $41.9m in 2021. This increase is reportedly due to efficiency gains from the investment in technology for primal and middle cuts and warehousing at Lorneville. Chair Murry Taggart says Alliance increased its bovine network capacity by 10% and processed more cattle than the previous year. Taggart notes “our inventory levels are lower than last year, but they could have been significantly lower if we had managed to get the containers we wanted.”

Tag: Red Meat, Trade & Exports, Agribusiness

Amara raises $12m for ‘nutrient-dense’ plant-based baby food [19 November, AgFunder News]

US foodtech startup Amara has raised US$12 million in Series A funding to grow its brand of plant-based baby food products. CEO Jessica Sturznegger says the company is focusing on the baby food market as baby food tends to be “all really highly processed [and] really high in sugars.” Amara sources each ingredient separately to reduce sugar content, relying on a team of food scientists, nutritionists, and an in-house chef to assess nutrient density and discover flavour combinations that complement each other.

Tag: International, Food Innovation, Food Marketing

New EU rules for deforestation-free products: Companies will be ‘monitored and held accountable’ [19 November, Food Navigator]

The European Parliament has said companies supplying products that risk contributing to deforestation will be ‘monitored and held accountable’ through new due diligence regulations. However, farming groups have raised concerns that the new regulation might not be WTO-compliant and have serious consequences on the future trading relationships. In this context, European Farmer associations Copa and Cogeca says “it is very important” for the EU to work in partnership with producer countries to address the root causes of deforestation.

Tag: International, Environment & Emissions, Policy and Regulation

Talley’s interfered with injury claims, whistle-blowers claim [21 November, One News]

According to two whistle-blowers, food manufacturing giant Talley’s Group interfered with injury claims filed by its workers, denying many of their rightful compensations and being forced back to work before they had recovered. ACC records show the company is rejecting dozens of injury claims every year, with the group refusing to pay out on 58 claims in 2018, 66 claims in 2019, 68 claims in 2020, and 53 claims between January and June this year. Lawyer Peter Sara has represented many of Talley’s injury claimants and said the Government should take action to protect the vulnerable people involved.

Tag: Agribusiness, Policy and Regulation      

Construction starts on $20 million marine extracts hub [22 November, Stuff]

Construction of Sanford’s new NZ$20 million marine extracts centre has begun in Blenheim and will help meet the growing demand for greenshell mussel powder. It is expected to be completed in August next year and will include a research laboratory and factory. General manager of innovation Andrew Stanley said the current facility made about 120 tonnes a year of mussel powder, using two dryers. “The new site will have the capacity for up to eight dryers, and we will have the capability to do mussel oil extract from the powder,” he said.

Tag: Aquaculture, Rural Communities, Food Innovation

The stark reality of producing cheap chicken [22 November, RNZ]

The unappealing reality of life for chickens in New Zealand is depicted in a video released by animal rights group Animals Aotearoa, showing hundreds of birds in a dark barn. According to Animals Aotearoa, the video raises concerns about baseline chicken welfare in New Zealand and whether high-volume intensive chicken raising for meat is ethical. The chickens have been particularly developed to grow quickly and to produce a large amount of breast meat, however, their rapid growth can cause problems such as growing too quickly for their legs to cope, rendering them lame.

Tag: Poultry, Animal Welfare  

We're on the same page - McBride [23 November, Rural News Group]

Agriculture Minister Damien O'Connor has advised Fonterra Co-operative that its capital structure overhaul is incompatible with the Government's policy goals, however, chairman Peter McBride said he was "happy" to receive the letter. He stated that it showed the Government's desire to collaborate with the co-operative on a new financing structure and that their "objectives are aligned." Since receiving O'Connor's letter, McBride has spoken with him and is convinced that he can offer the Government the required assurances and work together to develop a regulatory framework that supports the flexible shareholding structure.

Tag: Policy and Regulation, Dairy

IRI – Friction, fragmentation and #fetapasta [23 November, Food Ticker]

According to IRI, having an omnichannel strategy for your food product is more important now than ever to drive FMCG growth in a border impacted environment. “Your consumers want a seamless and consistent shopping experience regardless of where they see your products,” says head of retail, innovations and solutions Debbie Simpson-Pudney. She explains that #fetapasta (a simple and easy pasta recipe) has more than 661 million views on TikTok which resulted in out-of-stock feta cheese from Finland to Australia. The phenomenon also reached New Zealand, with a circa 16% increase in feta cheese sales when the video went viral.

Tag: Food Retail, Food Marketing

Hundreds of Countdown workers to strike in Auckland as pay negotiations stall [23 November, Stuff]

Approximately 700 Countdown workers are going on strike from midnight on Tuesday, affecting two of the company's Auckland distribution centres. The action follows the supermarket chain rejecting pay increases in line with the consumer price index during bargaining for a new collective agreement. First Union organiser Olly Paegotau said their goal was to get the company back to the bargaining table and “negotiate a fair deal”, not to disrupt operations or impact the food supply chain.

Tag: Food Retail

Surge of demand for NZ meat, continuing supply chain disruption predicted for 2022 [23 November, RNZ]

According to the Global Animal Protein Outlook report, demand for NZ meat is strong and set to grow further as economies continue to reopen but high freight costs and labour shortages continue to be a key challenge heading into 2022. RaboResearch analyst Genevieve Steven said, "there's an amazing opportunity here to take advantage of the really strong demand for sheep and beef meat, but it's going to come down to our processors' ability to manage labour and shipping through the season."

Tag: Red Meat, Trade & Exports       

Impossible Foods raises $500M, bringing its lifetime funding to more than $2B [23 November, Food Dive]

Impossible Foods closed a $500 million funding round, bringing its lifetime funding to more than US$2 billion. This latest round was led by Mirae Asset Global Investments. The funding will help Impossible Foods continue to grow in the U.S. and internationally, the company said. It will be used to expand retail growth through its supply chain, product portfolio and technology platforms, which the company said will help it achieve its mission of addressing the threat of climate change caused by animal agriculture.

Tag: International, Alternative Proteins         

Venison market in recovery, albeit slow [24 November, Farmers Weekly]

New Zealand venison markets are in recovery as restaurants in Europe and North America get back in business. However, it is a slow recovery due to high costs and limited capacity of airfreight out of NZ. Deer Industry NZ venison marketing manager Nick Taylor says success with ground venison is now allowing companies to get shelf space for more items such as venison medallions. Meanwhile, the usual drop in farmer returns for venison that follows the spring chilled export season is expected to be much smaller this year.

Tag: Red Meat, Trade & Exports, Covid-19

Making agrifood systems more resilient to shocks [24 November, Rural News Group]

According to the 2021 State of Food and Agriculture (SOFA) report from the Food and Agriculture Organisation (FAO), without proper preparation unpredictable shocks will continue to undermine agrifood systems. The report estimates that currently 3 billion people cannot afford a healthy diet and an additional 1 billion people would join their ranks if a shock were to reduce incomes by one-third. The report provides helpful information to combat this problem which includes an assessment of the ability of national agrifood systems to respond to or recover from shocks/stressors and guidance to governments on how they can improve resilience.

Tag: International, Trade & Exports, Environment & Emissions

Get in touch

 
Audit – Auckland
Ian Proudfoot
09 367 5882
iproudfoot@kpmg.co.nz
Management Consulting – Wellington
Justine Fitzmaurice
04 816 4845
jfitzmaurice@kpmg.co.nz
Agri-Food – Auckland
Jack Keeys

09 363 3502
jkeeys@kpmg.co.nz
Private Enterprise – Hamilton
Hamish McDonald 

07 858 6519
hamishmcdonald@kpmg.co.nz
Agri-Food – Auckland
Andrew Watene

09 367 5969
awatene@kpmg.co.nz
Consultant – South Island
Genevieve Steven

03 307 0761
gsteven@kpmg.co.nz

Farm Enterprise – South Island
Brent Love

03 683 1871
blove@kpmg.co.nz

Field Notes Administrator
Angelo Marundan
+64 9363 3624
amarundan@kpmg.co.nz