Agribusiness: Government agencies stellar job keeps agri exports flowing (NZ Herald)

There is a massive opportunity in front of us to capture premiums. Without doubt, our brand story is at an all-time high at the moment because of what we’ve done with Covid.

NZTE chief executive Peter Chrisp says the impact of New Zealand’s Covid-19 lockdown had immediate consequences for its customers — New Zealand exporters.

“I’ve always worked hard. I’ve never worked this hard,” Chrisp said at an interview at NZTE’s Wellington head office.

Even prior to the coronavirus pandemic hitting New Zealand’s shores, the agency was heavily involved providing support to its customers exporting to the China market.

“China is such a big market for New Zealand with many of our customers,” said Chrisp. “They needed to know what was going on and were desperate for insights. We had 65 people in China – we had to get them working from home. They were keen to contribute and lean in to support customers.

“So that was the beginning of it, and then it just unfolded, into Italy and South Korea.”

When New Zealand entered the alert level four lockdown phase, one of the immediate issues Chrisp’s team needed to face was how to support airfreight. With passenger traffic severely limited, there wasn’t a functioning airfreight market, which many of our high-value exports — including seafood and honey — depend on.

NZTE co-ordinated around 200 charter flights to key export markets, including Shanghai, Los Angeles, Tokyo, Singapore and Australia: “We got good backing from the ministers and the Ministry of Transport. We underwrote the capacity of the plane — the last 20 per cent of the plane.”

He said if a chartered plane wasn’t full it wouldn’t leave. The underwrite didn’t have to be used very often, but it was an important mechanism to provide certainty to exporters that their goods would make it to market.

In the medium term, a new initiative with funding allocated from the May budget will focus on supply chains, building firm capability in freight and logistics and helping to build capability within export firms.

Another of the initial challenges for exporters was ensuring sufficient cashflow for business continuity. NZTE formed partnerships with Deloitte, PwC and KPMG to provide a business continuity service for around 500 of its customers.

“From that, they got a bit of a plan about how to respond immediately, how to get their cash under control and what to do with their working capital and inventory,” Chrisp explained.

He said that while many exporters might be dealing with the current environment, they are starting to ask questions about the sales funnel and how to fill it long-term.

“I’ve been talking to some specialist manufacturers who would normally sell mostly through attending conferences, relationships with procurement mangers, and foot traffic. They are now wondering how they reach their customers.”

Many are turning to digital – which Chrisp said is one of the biggest things NZTE is engaged with at the moment. This will include scaling up e-commerce capability to provide digital commerce content, tools and advice to more exporters.

Keeping track of its current suite of clients, NZTE has developed a heat map that runs a ruler over companies and considers which companies that are thriving, surviving, or struggling.

Chrisp said this gave the agency a good feeling for where the hotspots were, and at the start of the crisis it was the export-dependant specialist manufacturing firms that he was most concerned about.

He said that though a lot of the customers of specialised manufacturing firms were considered essential overseas, they weren’t here — which had made things difficult.

The heat map is now showing around 32 per cent of companies thriving, 60 per cent surviving and about 8 per cent struggling.

“The thriving companies are across categories like food, manuka honey, nutraceuticals. But even in tech you’ve got companies involved with education software or gaming software that are doing well,” though Chrisp noted, you’ve also got people struggling in those categories as well. The Ministry of Foreign Affairs and Trade (MFAT) has developed a trade recovery strategy to address that. MFAT says the next phase of New Zealand’s response is recalibrating New Zealand’s trade policy for a new international environment.

The strategy, launched by trade and export growth minister David Parker, has three pillars: retooling support for exporters, reinvigorating international trade architecture, and refreshing key trade relationships.

NZTE will play a key role in this — in particular, Chrisp said it will be the custodian of the retooling pillar.

“The Government knew it couldn’t just rebuild New Zealand with a domestic fiscal spend. You need an international export recovery leg — and I think you need an investment recovery leg as well.”

Some of the $216 million funding boost it received through the Budget will be used to significantly increase the number of exporters that receive intensive support from NZTE. The agency says that collectively these exporters directly employ over 200,000 people. About 75 per cent of these firms are expected to be SMEs with 50 or fewer employees.

“We will have more customer managers that can deal with more New Zealand companies and services — and more boots on the ground in premium international markets,” Chrisp said.

Business development managers in key offshore markets will be particularly important for exporters while international travel remains restricted. It is envisaged that this team will be able to carry out additional functions for companies in-market – including meeting customers, vetting new employees, and selecting distributors.

Another portion of the funding has been allocated to expand the International Growth Fund, which helps reconnect companies with international markets and supply chain partners, as well as explore new opportunities.

Chrisp said he is keen to uphold the sense of the opportunity in front of New Zealand — particularly in the food and beverage sector.

“We’ve had food and beverage manufacturers in New Zealand that responded very well during Covid.

“The opportunity to be the most keeps agri exports flowing sustainable food producer on the planet is quite a niche — quite an exciting niche.”

One area that Covid-19 might help New Zealand is by spurring the acceleration of the shift from volume to value. Chrisp said food and beverage is at the sharp end of that.

“There is a massive opportunity in front of us to capture premiums. Without doubt, our brand story is at an all-time high at the moment because of what we’ve done with Covid. There is an opportunity to double-down on that brand story and those sustainability settings.”

“The health competitor advantage — growing food and beverage out of this healthy country and the intersection of innovation with our food and beverage story and our agritech sector, there’s some really great things that we can accelerate and advance around this.”

But, said Chrisp, a key challenge for New Zealand will be keeping the New Zealand brand alive in international markets over the next 12 months without international travel.

NZTE is working on strengthening New Zealand’s brand in priority markets by maintaining, promoting and broadening New Zealand’s brand appeal, particularly while the tourism sector is recovering.

Chrisp said it will re-emphasise New Zealand’s reputation for safety, trust, resilience, ingenuity, sustainability and high-value goods and services using the highly successful New Zealand Story strategy.

“When you think about who is probably likely to carry the New Zealand brand story, it is probably food and beverage and tech, because there are such good stories wrapped around those products and services.

“If our food comes out of a Covid-free country, it’s good for human health and it’s got a story wrapped around it about the quality of the country — that’s a particularly good story that will resonate in premium markets.”

Chrisp said it comes back to the underpinning values of kaitiaki — our role as guardians of people, place and planet and protecting what is precious over generations. We think that Covid has demonstrated that story.

“Our high integrity, high transparency, our very low corruption and our ingenuity — they are underpinning values that we think will resonate well on the international stage.”

Agribusiness: Covid impact felt in January in agribusiness (NZ Herald)

Ministry of Primary Industries chief executive Ray Smith says the impact of the Covid-19 crisis started early for MPI “as an agency”.

Smith says in late January, MPI started to observe the impact. Their biosecurity workforce — around 300 people at air passenger terminals — saw about 20,000 people passing through daily.

“The very first issue for us became the safety of our staff with the number of people coming to New Zealand,” he recalls. “At that point in time the concern was China. We acted early to make sure our staff had protective equipment. We were one of the first companies to give our staff PPE (personal protective equipment) and Perspex screens at the airport.

“While we had a few people that had Covid, none of them picked it up through the course of undertaking their work.”

By early February, MPI was countering emerging issues in the forestry sector with too many logs sitting on wharves in China. Similarly for rock lobster where 98 per cent of NZ’s crayfish is exported to China.

“Those were huge issues. But it was when we headed into lockdown that things really started to intensify.”

Following the lockdown announcement, MPI pulled together a conference call with people right across the primary sector. Smith says it was on that call that MPI set a standard for how it would operate through the crisis.

“People were incredibly grateful to be given the opportunity to continue to operate as essential services — there was a great fear at the time that many more things would be closed down.

“We were very clear about the gravity of the situation we were facing. But we had the potential to manage this well and show what could be done.”

Over the course of the following few weeks, MPI officials visited about 4000 premises. Smith says the agency set some high standards, and it was very challenging for some reasons — those in big processing areas like meat plants, dairy companies, horticultural pack houses — where there were large volumes of people working together. Enforcing those rules had a big impact on their productivity and he says MPI was aware of that. “But they adopted protocols, enforced them, and were actually grateful to have someone come out and verify from MPI they were adhering to good practice. We wouldn’t let each other down. It was a real test of positive relationships and working together to achieve a good outcome for New Zealanders.”

Says Smith: “It wasn’t easy in all areas. We did have some people in a couple of meat plants that had Covid, and in the dairy factory — but because of the protocols they never spread the disease, and it didn’t result in any closures. That level of cooperation, and the way we rallied together to get it right for New Zealand shone through and is something we can all be very proud of.”

The Herald put a number of questions to Smith:

Herald: How did you manage early on with your people in market?

Over February and March, we were bringing our people from China and Japan and other countries home. Our deputy director general for China relations — Tim Knox — went the other way. We felt that market was so important that we had our most senior person there throughout. He is still over there, and we have more MPI staff over in the next few weeks. We’ll back to our full complement by August. That has been an important priority for us — to have our people back in market.

Herald: Was there anything that really surprised you as you got further into the crisis?

The level of interdependence. We are managing a biological system, and it works on a season and pattern. You can’t turn off things for four weeks and just go back to normal.

Animals have to be able to reared, farmed, go into works and sold — or else you end up with a backlog somewhere. All of these things are heavily interdependent.

And there is a challenge for us around some of our systems when these crises hit. It was made worse for us because there was a drought as well as Covid. At one point there were worries about feed coming out of Malaysia — but all of these issues resolved themselves. My colleagues across government were critically important to making sure there was good flow at the border.

The forestry industry was largely closed. But we didn’t close it all down. The plant in Kawerau that produces chlorine, which is needed for our drinking water remained open. We have to have packaging materials so that our produce could be shipped offshore; paper produced for newsprint. We made an early call that we needed to allow people that work in nurseries to go and look after the plants. We couldn’t just close everything down — if those people stayed home, we would have lost more than one season of product.

Herald: What about the NZ brand story and implications for how the sector dealt with Covid-19?

The great thing going forward for New Zealand is how it has dealt with Covid has reinforced the confidence for NZ that you can trust the products that come out of it.

The e-certification of products into China emerged through this period as well, and became very important since documents were not able to flow as easily. There is a real opportunity to change things, because people have become more used to doing things digitally. I suspect in some ways our productivity was enhanced!

Herald: Are there any lessons for the future from dealing with the Covid-19 crisis?

We couldn’t have achieved what we did without having relationships, trust and a sense that we are all in this together. What I was really worried about was that New Zealand was making a huge sacrifice by keeping most people at home. When we were sending people to work — particularly in meat plants and packhouses with large numbers of people — we could not become a vector of disease through poor practice. But we proved we could do it.

Herald: What are the big challenges you are facing now?

We have a great primary sector, but one of the big challenges we will have is attracting more New Zealanders to come into the workforce as part of the recovery effort. We will have a campaign over the next few weeks to encourage Kiwis to come and work right across the primary sector.

Also maintaining our presence in market, and the inevitable levels of protectionism that might creep in as people see jobs disappear in other economies. And in getting that message out that New Zealand is here, we have great products, and you can trust us.

Agribusiness: FarmIQ software platform a bonus for farms (NZ Herald)

The FarmIQ farm management software platform is in use by over 4000 New Zealand livestock and dairy farms to support farm assurance, compliance, sustainability, productivity and traceability.

Most recently, it is now meeting new demands faced by the industry post-Covid.

The platform was developed as part of the FarmIQ Primary Growth Partnership (PGP), a seven-year programme that began in 2010 with the aim to create a demand-driven, integrated value chain for red meat that could grow the value of the sector by 50 per cent by 2025.

FarmIQ’s software is now jointly owned by Pamu Farms NZ, Silver Fern Farms, Farmlands, Veterinary Enterprises, and recently received investment from MSD Animal Health.

The agriculture industry is being disrupted by the rapid emergence of digital technologies, along with increasing compliance and regulatory requirements.

FarmIQ’s platform brings together all farming data into one place, helping farmers to run more productive, profitable and sustainable farming operations.

It combines detailed animal records with information about land, feed and people.

While some farmers solely use the platform for its recording and communication efficiencies, others use it to compare and learn from the results of changing practices like planting crops or mating hoggets at different weights.

FarmIQ chief executive Darryn Pegram says the only way you can meet today’s increasing demands is through digital technology.

FarmIQ’s software pulls together all farm information into a single dashboard.

By sharing farm data with vets, processors and regulators, FarmIQ is able to create value for the entire supply chain.

An example of the benefit of this was during the Mycoplasma bovis outbreak. A number of FarmIQ’s farms were able to use records dating back 18 months to identify the movements of their stock.

With this proof, the Ministry for Primary Industries was able to significantly reduce the necessary stock cull on these farms.

There is also a growing awareness and demand from consumers about their food choices, seeking traceability of food across the supply chain.

In major markets around the world, customers are prepared to pay a premium for sustainable food grown and produced in New Zealand. This is only expected to increase in a post-Covid era.

“By treating compliance as a by-product of productivity, it makes compliance easy and improves the quality of information that flows through the entire ecosystem,” says Pegram.

“FarmIQ allows producers to help tell the New Zealand provenance story on the world stage, while also demonstrating the integrity of its supply chain.”

He says the pandemic has accelerated digital transformation in agriculture and highlights the need for digital transactions.

“This is likely to continue to escalate, as demand and requirements for biosecurity and remote assurance steps up.”

Pegram says that FarmIQ’s software platform has the potential to create new value for farmers the world over, and the recent investment in the company by MSD Animal Health — a division of global healthcare company Merck & Co — is recognition of the considerable potential the FarmIQ platform has for use in global markets.

“We often field inquiries from farmers and agribusinesses in Australia and other countries that don’t have comparable products.

“We can see that as software becomes an increasingly important part of hardware offerings, we’ll have new opportunities to reach foreign farmers.”

Pandemic pivot

FarmIQ’s platform was able to help the industry quickly respond to the Covid-19 pandemic during New Zealand’s alert level four.

During New Zealand’s strict national lockdown, Synlait was able to continue audits on its farms with FarmIQ providing remote visibility of what was happening on-farm.

“Synlait were able to maintain their very high standards of food integrity while keeping their farmers, staff and auditors all remote from each other and safe from the spread of Covid-19,” says Pegram.

“The process also offers efficiencies and is popular with farmers as less time is spent on farm looking at records.

“Synlait completed the audits with a short physical visit once lockdown was over.”

While designed for farms, the FarmIQ team are using their software in their Wellington head office. All staff and visitors use the Safevisit app they developed with Farmlands for contact tracing.

“We knew FarmIQ was a fantastic biosecurity tool,” says Pegram. “But we didn’t really imagine it would be called on as a holistic solution for animals, plants and people too.”

Vision week day one – Opportunity NZ: why a vision is necessary (NZ INC.)

Visionweek NZ 2020 kicked off today, asking us to imagine if New Zealand’s five million-strong population set a vision for our future that ensures New Zealand’s long-term sustainability, productivity, resilience and high-quality outcomes for all people, communities and the environment.

The week-long programme features prominent New Zealanders, including Xero founder Rod Drury, Sir Stephen Tindall, economist Shamubeel Eaqub, Rocket Lab’s Peter Beck, former NZ chief science advisor Sir Peter Gluckman, Spark CEO Jolie Hodson and Auckland Transport’s chair Adrienne Young-Cooper.

The organisers say Covid-19 has created the conditions to reset our path, to take advantage of the huge opportunities that eliminating Covid provides, and to address some critical areas like climate change, equality of opportunity, and mental health where urgent action is needed.

Visionweek founder Paul Blair says, “A vision can create the ‘north star’ that links our team of five million, but it needs to quickly translate into a multi-decade, multi-partisan nation-building plan. Our plan needs to realise New Zealand’s untapped potential and put people, purpose and planet at the heart of transforming Kiwis lives for the better.”

Each day this week is focused on a different theme. Today’s is ‘Opportunity NZ: why a vision is necessary.’

Sir Stephen Tindall says the real opportunity is for us to come up with strategies that leverage our strengths. He notes our energy is 82 per cent renewable which is something the rest of the world is hugely jealous of.

“I’ve kind of seen with my involvement with both Rocket Lab and Team New Zealand, that if you use what I would call 21st century technology, and we actually gear up as a country to actually utilise and leverage that, we could do so much more than we’re doing right now,” he says.

Sir Stephen Tindall

“I’d love to think that every New Zealander thought through the sustainability lens and how much we could leverage that to our benefit, because there’s huge corporations around the world that want to invest in that. They want to impact investing into green things. We could be the microcosm of that in New Zealand, for them to learn how they can do it in their country.”

Panuku’s corporate responsibility advisor, Tessa Meyer, was recently awarded the New Zealand Green Building Council (NZGBC) Future Thinker of the Year for 2020.

Tessa Meyer

She says tackling the pandemic and climate change at the same time is daunting, and while it may be tempting to go back to normal, we have an extraordinary opportunity to use the resources that are at our disposal to tackle both challenges at the same time.

“I really hope that we can readjust some of our priorities,” she says. “Putting a green recovery, ahead of a simple financial recovery and investing in infrastructure that helps accelerate our de-carbonization and promotes environmental and social resilience. In 10 years’ time I would really like to look back on what we have done with this opportunity and know that we spent it on the right things.”

Professor Paul Spoonley says New Zealand is a small, relatively nimble country and is able to react to and develop new policies to address some of the negative consequences of Covid-19.

“It is an opportunity for us to really consider what a 21st century New Zealand might look like and to begin to shift resources and support and policy in ways that, privilege, the new way of doing business of living in this century.”

Professor Paul Spoonley

He says that baby boomers are now politically very significant and determining policy, but we’re not giving enough space and air time to some of the subsequent generations.

“I’m feeling excited, because I think there is a moment now when we begin to talk about our systems, our policies and the way in which we are going to operate in the future in a way that probably we would never have had without the pandemic,” he says.

Sir Peter Gluckman says the dynamic digital sector and entrepreneurship means that our geographical position in the world is not as disadvantageous as it used to be, because we are now more connected.

“We showed we can work very well in a virtual world, in a digitally connected world,” he says, pointing to Rocket Lab and Weta Workshops as examples.

Sir Peter Gluckman

Considering a Māori world view, Kono chief executive Rachel Taulelei says “while there is not necessarily one view, there is a commonality in and around values and the way that we might think intergenerationally.”

She describes it as being hardwired for collective responsibility for people.

“We have a particular relationship obviously with our land and our water. We revere them and we view them as our tupina, our ancestors. So, we love and care for them in a way that we might a brother or sister or a grandparent or any other relation in that respect.”

Rachel Taulelei

Visionweek has been made possible by the support of multiple partners, including Sustainable Business Council, Internet NZ, the Construction Sector Accord, EECA, Business New Zealand, the New Zealand Infrastructure Commission, the Ministry for the Environment, Infrastructure New Zealand and ASN Media.

All New Zealanders are invited to share their thoughts, using the hashtag #visionweeknz, so that as many viewpoints as possible can be integrated into the final report.

-Tim McCready

Budget 2020: Business leaders say which way the Government got it right (NZ Herald)

Business leaders have welcomed the cornerstone of the Government’s “once in a generation” Budget – the unprecedented $50 billion Covid-19 Response and Recovery Fund – rating it at 3.75/5 on an effectiveness scale.

The 52 respondents to the Herald’s business leaders post-Budget survey were asked to rate some big spending initiatives – such as the Covid-19 fund, health and education spend-ups, and investments in tourism, environmental and home building programmes on a scale of 1=5 where 1 equalled very poor and 5 equalled very effective.

The $50b fund was set up by Cabinet on April 6 and some $14b of initiatives, including the massive wage subsidy scheme, had already been spent before Finance Minister Grant Robertson unveiled last Thursday’s Budget.

The Budget included a further $16b from the fund to extend the wage subsidy, provide free trades training and boost infrastructure among other initiatives.

A further $20.2 left unallocated drew the ire of the National Opposition, who have called it an election bribe. “My only concern is the $20 billion slush fund,” Simplicity CEO Sam Stubbs said. “Unless this is spent quickly, it should more rightly belong in next year’s Budget and be the subject of better-costed policy announcements going into the election.”

A key part of the Government’s Covid response has been the wage subsidy scheme which provided companies $585.80 weekly for fulltime employees for 12 weeks, and, $350 weekly for part-timers. This was extended in the Budget for a further eight weeks at a cost of $3.2b. But conditions have been tightened so it is only available to businesses who have lost at least 50 per cent of revenue in the month preceding application.

A large fashion retailer boss said the 50 per cent loss threshold is too low, noting: “many businesses will perform better than that, but will still have significantly impaired performance and have to lose staff as a result.”

Spark CEO Jolie Hodson said it was positive to see $1.6 billion earmarked for trades and training and part of this should be directed to digital skills.

“It is important that we are thinking about the future of work in New Zealand and recognizing the need to build the capability of New Zealanders to be able to participate and thrive in an increasingly digital world,” said Hodson. “Covid has highlighted how critical this is, and we already know the productivity benefits it brings.”

Chapman Tripp Nick Wells said all the initiatives were stimulus of one sort or another. “We need to recover in a way that is fit for the future, learning from all of the benefits we have seen from the lockdown such as being more environmentally friendly, increased flexibility and ability to work from home being more digitised and having a much more weightless economy.”

The $400m domestic tourism sector relief package announced in the Budget was panned by many from a sector that directly employs over 229,000 people. Auckland Business Chamber CEO Michael Barnett said tourism was a $40b contributor.

“It deserved more and would have created employment.”

An agriculture boss added, “the investment in tourism needs to be seen for what it is – a start. This is one area where some reimaging would be good for the industry and New Zealand.”

The Government also revealed it would borrow $5b over the next four to five years to build 8000 state and transitional houses in partnership with housing providers. Business leaders scored the initiative 3.4/5.

“As long as (Phil) Twyford stays very far away from the project,” cautioned a wine exporter. A retail chief added: “Unsure on state house builds – there has been no tangible evidence of having good execution with KiwiBuild etc.”

The $1.1b package to create 11,000 jobs in the environment sector – from pest control to wetland restoration – received a score of 3.27/5, with some sceptical of its merits: “It is worthy but unlikely to attract the numbers of unemployed workers to make a difference,” suggested a food producer boss.

The $1b allocated to support education services received a score of 3.83/5 from respondents.

An executive in the transport industry says the package is worthy, but is missing “any mention of digital technology, which seems a missed opportunity following the recent experience of remote learning.”

Perhaps unsurprisingly, the $6.3b investment in health received the highest score from executives of all the Budget areas surveyed with 3.98/5.

“Covid-19 showed that our health system was not up to responding which was one of the reasons for the severe lockdown,” said independent director Cathy Quinn. “The money needs to be spent wisely so that in another pandemic our system is better able to respond.”

“Health needs much more than money, without a complete review and overhaul how much of the $6.3b will be wasted?,” asked a banking boss.

Pandemic pivots: The best of NZ business showing resilience in the face of adversity (The Spinoff)

Non-essential business has taken a hit over the past month, but innovative New Zealand companies are finding the silver lining.

Restrictions imposed by the Covid-19 lockdown have caused some businesses to consider closing up shop for good. While some have taken this route, others have used the restrictions forced upon them to pivot into areas they hadn’t before – either because they had never needed to, or they had never considered it.

One of the best examples of this is Nanogirl Labs, run by one of New Zealand’s best-known science communicators, Dr Michelle Dickinson. It was quickly apparent to Nanogirl Labs that its “old” business – live stage shows and performances at schools around New Zealand – was not viable in the near future.

“I looked at our staff, I looked at my husband and business co-founder and we knew there was a big decision to be made: accept defeat and wind the business up, or fight for something we believed in,” said Dickinson.

Within three days her team developed an online learning platform for those same kids they would normally reach through their shows who now needed to stay home. Each weekday, a “science adventure” is delivered to teach STEM (science, technology, engineering and mathematics) to New Zealand’s next generation using common household items. On top of that, Nanogirl Labs maintained its “buy one give one” model – meaning those who wouldn’t have been able to afford to take part can.

Waikato brewery Good George moved early to produce 1,000 litres of hand sanitiser from a distillery it had been using to make spirits. Co-founder Brian Watson says they had the idea after having trouble sourcing the liquid gold for its own staff: “We had our whisky and gin programme going for a while and we thought: the world needs hand sanitiser more than it needs gin and whisky right at the moment,” he said.

Similarly, dairy giant Fonterra made 250,000 litres of ethanol available to companies making hand sanitiser and has also increased the production of ethanol at one of its plants. Chief executive Miles Hurrell said in a webinar this week that this came at “a significant cost to our business, but we knew it was the right thing to do”.

Steve Nathan, chief executive of timesheet company TimeHub, says he was inspired by British technology company Dyson, which repurposed some of its production from vacuum cleaners to ventilators. He said it made him wonder, “How can we not pivot, but rather repurpose what we have for our new normal?”

His team created MyVisitorLog, an online service that allows customers to use their own device to record when they visit a business. This will be a long-term requirement for contact-tracing purposes – particularly for restaurants, cafes and bars – and this tech will allow it to happen contactlessly.

Responsive retailing

Supermarkets were among only a handful of retail outlets allowed to open during the alert level four restrictions and as such have been innovating since the beginning of the lockdown.

Foodstuffs has been trialling a virtual check-in for customers, where shoppers text the supermarket to be put into a queue and are sent a reply when it’s their turn to shop. This has made social distancing easier – customers can queue in their car – but has also meant that shoppers like me who live close to one of the supermarkets participating in the trial can queue virtually from home (and then get to the supermarket at pace to meet the 10-minute allowance!).

Clickandcollect, set up by George Czabania, automatically collates click-and-collect slots for all supermarkets across New Zealand, allowing customers to more easily hunt out available times (which have been incredibly scarce during lockdown).

Another website, How Long is the Line, built by developer Gareth Hayes, crowdsources queue times at supermarkets, helping customers avoid an unnecessary two-hour wait in their attempt to locate flour (often unsuccessfully). Customers feed data into the site to approximate the number of people waiting in the queue – the more people who update the site, the more accurate it is.

Countdown opened New Zealand’s first dedicated online store in Auckland to respond to the massive 300% surge in online shopping demand. The 8,800-square-metre store is located in Penrose, and is operating 24 hours a day, seven days a week to fulfil more than 7,500 orders per week.

The shift to alert level three has spurred on further innovation in retail, as brick-and-mortar stores look for ways to adapt that will allow them to continue to trade when restrictions won’t allow foot traffic.

New Zealand Made launched a custom website to help New Zealand retailers that have inventory ready but haven’t been able to open to take orders until now. These retailers were ready and waiting to send orders out at 11.59pm on April 27, as soon as the level four restrictions end. #ShopKiwi, New Zealand.

The Warehouse Group recently announced it is allowing contactless click-and-collect from The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo7 outlets from this week.

“We wanted to offer Kiwis another way to shop safely as we transition into alert level three,” says The Warehouse Group chief executive Pejman Okhovat.

“While we can’t open our stores during this time, we can offer another safe and secure way for Kiwis to shop our complete online range that’s free, except for oversize items, and easy to use.”

It’s also trialling drive-through shopping at four of its Auckland outlets, which will also allow access to orders made through online retailer TheMarket. Bolstering its online offering, TheMarket has partnered with grocery and ready-made meal businesses Foodbox, HyperMeat and Jess’s Underground Kitchen for this initiative.

Meals on wheels

New Zealand’s largest online restaurant table booking website, Restaurant Hub, has launched a new service to enable customers to order click-and-collect meals from restaurants. The service has had a huge amount of interest, with 140 restaurants and cafes opting in over the first weekend.

Uber Eats’ refusal to reduce its standard commission charge of 30-35% has caused public outrage. Responding to this, prime minister Jacinda Ardern encouraged New Zealanders “who may be looking forward next week to accessing takeaway food to look at your favourite local eatery – and I do encourage you to support local businesses – and just look at whether or not they offer delivery directly themselves”.

Tim McLeod says the desire to help his favourite cafes and restaurants caused him to “pivot away from my day job” as a digital tech consultant and create Eat Local NZ as an Uber Eats alternative. He says the platform will charge restaurants just 5% commission and will pay drivers more than Uber Eats.

Car rental business Snap Rentals pivoted by bringing its usual services to a complete standstill. It launched an app that pairs its rental cars with its staff to perform personal grocery shopping services for customers. Chief executive Jamie Bennett says the delivery service has been so popular that he has had to take on new staff. He expects the service to continue even after restrictions ease up, in parallel with its car rental business.

The era of the webinar

A plethora of webinars have been set up to help New Zealand businesses use the time they may not be able to work for their businesses to instead work on their businesses. The Icehouse, NZTech and many others have created great resources. I have curated a list of upcoming webinars (using the help of crowdsourcing) here.

My favourite has been a series being run by the Trans-Tasman Business Circle, which has attracted fantastic speakers to discuss “resilient leadership in challenging times”, ranging from ANZ’s Antonia Watson to the Reserve Bank’s Adrian Orr and Auckland mayor Phil Goff.

In a similar vein, Manaaki has tapped into a network of successful New Zealand business experts – both local and offshore – and paired them up with New Zealand businesses needing help and advice, all for free.

Manaaki released a video love letter to small businesses featuring prominent New Zealanders including Jacinda Ardern, Stuart Nash, Stan Walker, Joseph Parker, UFC world champion Israel Adesanya and New Zealanders of the Year Jennifer Ward-Lealand and Lance O’Sullivan – all showing support for the platform and small business owners.

“We will not stand by and watch it happen. We are Manaaki – your support network of business experts. Give us your questions and frustrations, opportunities, fears. Share your burden, and together we will find solutions.”

We’ve got to think

While not strictly business-related, this deserves an honourable mention simply because of its mental health benefit.

I live close to Auckland’s best (personal opinion) and largest park: Cornwall Park. While the park is usually open to traffic and acts as a reluctant thoroughfare between two busy suburbs, for the duration of the lockdown the entry gates have been locked to cars and the gates throughout the park left open to minimise the need to touch anything.

This has created a huge open space with roads, footpaths and the many fields available for pedestrians, runners and cyclists to spread out and physically distance themselves – a much-needed reprieve for those of us subjected to hours of indoor Zoom conference calls.

A team of five million New Zealanders has united against Covid-19 and made it through level four with amazing levels of compliance. As we transition to level three, it’s my belief that many of our businesses will come through stronger than ever – because they used the time provided by the lockdown to work on their businesses.

In almost any New Zealand business presentation, there are two phrases that are commonly used.

One is the Māori proverb: “He aha te mea nui o te ao? (What is the most important thing in the world?). He tāngata, he tāngata, he tāngata (It is people, it is people, it is people).”

Another is one made famous by the father of nuclear physics, New Zealander Ernest Rutherford: “We haven’t the money, so we’ve got to think.”

Covid-19 is testing all businesses, but over the course of New Zealand’s lockdown, the spirit behind these two quotes has really shone through.

Miles Hurrell: Fonterra weathering the storm (NZ INC.)

Miles Hurrell, chief executive of Fonterra, gave a Q&A through the Trans-Tasman Business Circle on resilient leadership in challenging times. Tim McCready gives an overview of what was discussed.

Fonterra started to become aware of the escalating Covid-19 situation in China in January, says chief executive Miles Hurrell. Fonterra mobilised its team to consider the impact Covid-19 would have on the cooperative’s business – including a large piece of work early on considering the New Zealand context.

“That is where it ramped up, as we started to see that the impact on New Zealand was going to be real,” he says.

“We really mobilised our crisis team – about a dozen people across our entire business came together.”

Hurrell says Fonterra responded quickly to the Covid situation, moving most of its workforce to Level Four working arrangements well ahead of government requirements.

“We decided to get people working from home early. Everyone is mobile now with communication.”

That was relatively straightforward with the corporate office and with farmers who are easily able to work remotely and often already operate in a situation where self-isolation is not much different – but a little harder for those working in Fonterra’s factories.

“Since we are making food, all our facilities around the world already have stringent food safety and quality controls in place. It was just a step up to add a two-metre separation and record the temperature of staff.”

It was these strict measures that Hurrell attributes to keeping cases within Fonterra’s workforce low. There has been less than ten Covid cases across its global network of 21,000 staff, with most cases being the result of people returning from an overseas holiday.

“The early intervention by Fonterra, and making sure that people come nowhere near a factory or office, meant that there was no cross-contamination,” he says.

Regardless of any shift in Covid alert level from the Government, Fonterra will continue to operate as if under Level Four conditions.

“We can’t have risk of disruption. We will stay with Level Four for quite some time,” says Hurrell.

Dealing with crisis

The crisis team is well versed. Hurrell says as unfortunate as it sounds, Fonterra has two or three significant events on an annual basis – although most of these do not hit the media.

“We see an emerging issue, we get on top of it, and we manage it 99 out of 100 times. The way the team is geared up now, it is almost second nature.”

One of the early risks identified early on from a New Zealand context was the impact on shipping containers and space availability through the ports. But Hurrell says Fonterra’s long-term relationship with Maersk and the Port of Tauranga meant they were able to get a commitment they wouldn’t be impacted.

Hurrell and the senior management team at Fonterra works alongside the crisis team to clear the runway – allowing them to make decisions on behalf of the business. Hurrell says that although he wouldn’t call work right now ‘business as usual’, there is a sense of calm whenever he goes down to visit the crisis centre.

Weathering the storm

Fonterra has been through a rough couple of years, with billions of dollars of shareholder capital wasted on its failed transformation strategy under the leadership of former chief executive Theo Spierings.

Hurrell says Fonterra got “a bit ambitious”, and under his leadership has reduced debt significantly and changed to be more targeted in what it does and focused on taking New Zealand’s goodness to the world.

He says this will help Fonterra weather the upcoming storm, and will put it in good stead as it refines its strategy.

“We’ve just started to look at what Fonterra looks like on the 5-10-year horizon,” he says. “That has completely changed. Some things will still be there, but Covid has made us recognise the world will be different.”

Hurrell says despite some commentators saying Fonterra should only be in a single category or in single markets – it is this spread and diversity that has helped it. He points to restaurant trade, and says if Fonterra was solely focused on those businesses it would now be in significant strife:

“But because we are in base ingredients, advanced ingredients that go into medical foods, retail products, as well as those food services that are now starting to come back on in China, we have had the flexibility when we see something fall over and that has really helped us.”

Hurrell says his main role in navigating New Zealand’s largest organisation through Covid is providing a sense of calm across the business – giving commitment and confidence to the team that although there will be bumpy roads along the way, Fonterra is well placed to get through the crisis.

He says that providing that sense of calm is important. “But you also have to let your hair down and have a Zoom call with your mates on a Friday and Saturday night – you need that outlet.”

Central-local urban growth partnerships needed for Covid-19 response (NZ INC.)

Infrastructure NZ’s Paul Blair tells Tim McCready that infrastructure investment and construction will play a major role in New Zealand’s economic recovery programme – but central and local government collaboration is required to make it happen.

Infrastructure NZ – New Zealand’s peak infrastructure body representing 140 public and private sector industry members – says the Government’s response for the infrastructure and construction sector has been quick, clear and commendable, but says now is the time for regional and central government to collaborate and tackle projects that will improve outcomes for the bulk of New Zealanders who live in major centres.

In a letter sent to infrastructure minister Shane Jones earlier this month, Infrastructure NZ chief executive Paul Blair recommends the Government establishes a $20b ‘national recovery programme’ of funding, over and above identified projects able to be accelerated by the Infrastructure Industry Reference Group.

It suggests that this programme of work – as yet undefined – could be rapidly co-designed and funded using rapid deployment techniques used post the Christchurch and Kaikoura earthquakes. The North Canterbury Transport Infrastructure Recovery (NCTIR) alliance and the Stronger Christchurch Infrastructure Rebuild Team’s (SCIRT) were award-winning, speedy and well-regarded programmes. It would allow the Government to have flexibility and co-design for the ‘new normal’, as opposed to only accelerating existing shovel-ready projects.

Blair says the priority for the national recovery programme long-term is to establish a “North Star” against which immediate and intermediate options can be assessed to ensure they align with a longer-term strategic direction. The letter outlines five components that will be critical to the strategy:

  1. A vision for where the Government sees New Zealand’s future, especially with the significant Covid-19 changes
  2. Long-term strategic planning to achieve the vision
  3. Funding and finance
  4. Regulations and incentives
  5. Delivery capability and capacity.

Partnering with councils

Blair says one of the ways this strategy could assist, is by partnering with councils which have a significant need for infrastructure investment but face substantial funding issues.

Rates provide an average of only 60 per cent of council revenues – which some councils are already choosing to freeze or cut. The rest comes from more commercial sources like developer contributions, fees for public services, or dividends from airports, ports, or stadiums. These too are being severely hit by Covid-19.

“Hard-hit councils require financial support from central government that is tied to shared priorities through urban growth partnerships,” says Blair.

To put the challenge they face into context, he explains that individually, New Zealanders pay roughly $1125 per year to council, but $15,250 to government.

“It’s easy to see that is not equitable when local government owns roughly 40 per cent of the country’s infrastructure – the same as central government – but only has about a tenth as much money to maintain and upgrade it.”

He says the growth councils – Auckland, Wellington, Tauranga, Queenstown, Hamilton – make up a majority of our population, and should be expanding their operations at this time.

“Under an all-of-government approach, councils should be the very definition of shovel-ready. But instead their revenues are going down, and unlike central government they can’t go and borrow more.”

He points to Tauranga City Council as an example, which recently announced that its revenue would be reduced by between 15-25 per cent.

The looming funding issue for Tauranga could see some $300m of housing-related infrastructure stopped. It cannot fund long-term planned capex due to cost increases, population growth and leaky building claims that would mean it would breach its debt cap without politically unachievable rates rises.

An NZIER report shows the 10-year impact of Tauranga City Council’s failure to invest in local pipes and roads could be:

  • a housing shortfall of 8,436 units
  • cumulative GDP foregone of $2,547 million
  • 1,580 – 2,320 construction jobs lost, worth an additional $118-$174 million of GDP foregone
  • house price rises of $702,082.

“If you give $1 of new income to a council, they can go and borrow $2.50. But if they lose a dollar, they also lose the ability to fund $2.50,” explains Blair.

In addition, the loss of this infrastructure would see significant lost opportunity for Crown revenues, impose further costs on the Crown (assuming accommodation supplement and other housing-related costs rise) and would lead to spiralling wellbeing losses.

Blair says the counterfactual is that if Crown gave $100m of new income to TCC, it could borrow an additional $250m, creating enough headroom for the capex to continue. The cumulative GST on $2,547m of GDP is $382m – significantly exceeding the Crown’s initial $100m investment.

He says that while central government funding is urgently required, this shouldn’t be seen as a ‘free lunch’ for councils. As with all good partnerships, both the government and councils will need to show partnership behaviours, and rapidly align on win-win national, regional and local objectives and outcomes.

“We all share a common goal to re-inflate the economy and adapt to the new normal. Urban growth partnerships are a core part of the Government’s urban growth agenda, we now call for these to be funded and delivered at pace.”

Infrastructure NZ says if the Government can replace, or even enhance, lost council revenue, then local works in local communities can restart at great speed.

“Local government is where some of the greatest need is and where the greatest leverage can be exerted,” says Blair.

“In these times partnership will be essential. Central and local government need to be working together, not at cross-purposes – he waka eke noa.”

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Auckland Mayor Phil Goff says although you can mitigate against disruption, you cannot “do” construction without it being in some sense disruptive.

“Of course it is going to be disruptive if you’re ripping out the intersection between Wellesley St to Albert St. Of course it’s going to be disruptive if you’re ripping up Quay St,” he says. “But disruption is also progress.”

Goff admits there is a part of the community that will complain, saying the only way to get around is by car and any construction is too disruptive. But he says that attitude is not going to work as Auckland’s population rises by 40,000 a year and roads can’t get any wider.

He says the city does have to upgrade roads for cars — and disagrees with people who complain about the upgrade programme the Government recently announced as part of its infrastructure package.

“But actually, the big changes are things like the third main trunk rail line so we can increase the capacity further on heavy rail, and SkyPath and SeaPath. They will produce massive transformational change for Auckland — and for the better.”

Goff reckons the average person understands you can’t rip up a road to put a tunnel underneath it, or create a cycleway or widen the pedestrian footpath without having an impact.

“It is a signature of a city that is going places and we should be pleased about that,” he says.

And it is clear he is pleased. He talks animatedly about cycleways, the developments to pedestrianise areas, and public transport that will make the central city more environmentally friendly and accessible.

“It’s a way of giving people the choice and alternative ways of getting around the city in a way that doesn’t add to congestion, is low on carbon emissions, and is a fun way of getting around.”

Goff says there has been a long period where “bugger all infrastructure was being created” and we are paying the price for that now.

“The trouble with the City Rail Link (CRL) is that we shouldn’t be doing the sod-turning at Mount Eden now — we should be opening it.”

Goff says the CRL will double rail capacity and bring more people into the CBD by public transport.

“That was needed five years ago, and the reluctance of the government of the day to participate in that and then putting half the cost on Auckland … almost everybody can now see it was a bad mistake.”

The number of pedestrians on Queen St has roughly doubled in the past five years, the imminent opening of Commercial Bay is going to bring around 10,000 workers into one block, and we are seeing increasing numbers of cruise ships arriving into the city.

Goff asks: “How do you have all of that and have access by people to actually enjoy the city if it is still going to be a place that you drive through, rather than come into?”

A city under the spotlight

Adding to Auckland’s disruption is the preparation for 2021. It is shaping up to be one of Auckland’s busiest and most visible years ever — with the America’s Cup and Apec headlining the year, and other large major events including kapa haka festival Te Matatini, the women’s cricket world cup and the men’s world softball championship.

There is a lot of preening to be done in our largest city before the spotlight comes on.

The America’s Cup will be first up, and Goff says projects are on time and within budget for all of the infrastructure for the event.

“The development around Quay St and the new harbour park will be completed,” he says. “Commercial Bay and the Park Hyatt hotel will be up and running — but construction across the city doesn’t stop because we have international guests here.”

He says as well as the excitement and vibrancy the America’s Cup brings to the city, it also leaves some valuable legacy products — including the strengthening of the wharf, the removal of the hazardous substance tanks, installation of breakwaters, and replacement of the Daldy St stormwater outfall.

New Zealand’s hosting of Apec will involve a full year, with clusters of meetings held over 12 months from December 2020, culminating in the Leaders’ Week and CEO Summit in November 2021. For that, around 10,000 attendees will descend on Auckland, with leaders from most of the 21 economies expected to attend.

The CEO Summit was intended to be held in the brand-new New Zealand International Convention Centre (NZICC) — until the fire last October put that in doubt.

From his office, Goff has an unparalleled view of the NZICC construction site. He was one of the first to break the news of last year’s fire and gave regular updates of what he could see live through his Twitter account.

He is disappointed Auckland now won’t be able to show off its glitzy new hosting venue to the world.

“When we watched the fire start and then just run on for day after day, it was pretty clear that this meant the centre wasn’t going to be ready for Apec, notwithstanding the fact it’s still 21 months away.

“But we did have a contingency plan between government and council, and we have alternative options including the Aotea Centre and others. We won’t have the brand new built-for-purpose convention centre, but Apec will be a success and it’s not the end of the world.”

Goff says preparations have delivered a lot of new hotel beds, including the 300-room Horizon Hotel being built alongside the convention centre.

“We’ve been building 1000 hotel rooms a year. That means we’re much better set up to cater for an event the size of Leaders’ Week.”

Beyond 2021

Asked about the future of the city, Goff shares Sir Paul Callaghan’s vision for New Zealand — of Auckland being “the city where talent wants to live”.

He says our natural environment is an important part of what makes the city an attractive place to be.

“The Central Interceptor will be huge progress in stopping the high level of wastewater overflows into the harbour every time it rains,” he says. The $1.2b wastewater tunnel will run 14.7km long and 4.5m wide from Grey Lynn to the Māngere Wastewater Treatment Plant.

It is due to be operating by 2025 and will help make Auckland’s waterways cleaner by cutting overflows by up to 80 per cent.

Goff frequently talks about his desire to increase Auckland’s resilience to climate change in order to “ensure a better world for our children and grandchildren”. It was one of the major platforms he campaigned on during last year’s election, along with clean transport and protecting the environment.

He says climate change is the biggest environmental threat the world faces, though he admits there is a stark difference between Auckland’s contribution to water quality and climate change.

“The difference is that while the steps we take on water quality immediately act to remedy the problems, the steps we take on climate change are simply our contribution to what needs to be an international effort in order to stop global warming and sea-level rise.”

Auckland Council is developing a Climate Action Framework to outline a path to reduce emissions and prepare the region for the impacts of climate change. But Goff says while Auckland wants to be at the cutting edge of making the changes needed, it is important that other countries take it seriously as well.

One example of the changes being made is the recent announcement that all the red CityLink buses will become electric this year.

Goff says the move will help improve air quality by reducing pollution from black carbon and nitrogen oxide emitted by the current diesel vehicles.

“Black carbon is associated with health problems and has been found in Queen St at levels higher than in some major European and US cities, so it’s a priority for us to address this issue.”

In November 2017, Auckland joined 11 other cities in signing the C40 Fossil-Fuel-Free Streets Declaration, committing Auckland to buy only zero-emission buses from 2025.

But Goff says he’d like to bring that commitment forward.

“The capital cost of an electric bus is much higher. But the advantage is that over the lifetime of the bus, the running costs are half and it pays for itself over that time.”

He says the capital constraints of council means he is talking to the Government about the possibility of extending the feebate scheme to buses.

“Feebate is great for electric cars. I drive an electric car. But these buses are on the road for 18 hours a day — why wouldn’t you want to bring forward that conversion?”