International Archives - Page 3 of 18

Agribusiness & Trade: Evolving to rapidly changing consumer preferences

August 17, 2023

Agribusiness & Trade: Evolving to rapidly changing consumer preferences

Fonterra’s vice-president of food service for Greater China Justin Dai, says the $2 billion food service business the global dairy giant operates in China is evolving to keep ahead of rapidly changing consumer preferences.

Fonterra’s focus on localisation and innovation and the fusion of dairy goodness with local preferences in China has been a pillar of its success.

An example of this is the innovative “cheese dirty coffee” launched a year ago, a drink that combines espresso with milk, cream, cream cheese and butter.

“I know it sounds a bit odd,” Dai told the 2023 China Business Summit. “But when this dirty coffee was launched about a year ago, it was an immediate hit. It was launched by one of the large local coffee chains in China, and in the first week nationwide more than six million cups were sold.”

Fonterra’s commitment to innovation is underscored by the establishment of five application centres in China over the past decade, in Shanghai, Beijing, Guangzhou, Chengdu and a newly opened facility in Shenzhen.

The centres are a base for collaborative creativity, both within Fonterra and also with external stakeholders including bakeries, coffee shops, restaurants and retailers.

“This is an advantage we have in China, to work together with our customers to drive innovation,” Dai says. “We have strong confidence in the outlook of China. Demand is coming back, and we have the confidence to continue innovation.

“We will continue to invest in our partnership with our customers, going broader and deeper with our partners to continue to bring the goodness of New Zealand dairy into Chinese consumers’ recipes.”

Through Anchor Food Professionals, Fonterra serves four major channels within China’s food service market: bakery, beverage, dining and the rapidly growing retail food service sector. Its reach spans over 470 cities, including all tier one and tier two cities, along with hundreds of tier three and tier four cities, in partnership with its authorised Anchor distributors.

Key trends shaping the market:

● Gen-Z’s affinity for traditional Chinese pastries infused with dairy is creating new culinary opportunities.

● Social media’s pervasive influence is revolutionising buying behaviour, prompting an intense marketing arms race.

● The interplay between premium and mass markets is intensifying competition and redefining strategies.

● Fast, bold innovation is blurring channel boundaries and redefining the industry.

● The shift towards varied dining occasions, encompassing online, offline and food service retail, is altering consumption habits.

● Niche brands and the untapped potential of lower-tier cities present vast growth opportunities.

Agribusiness & Trade: Comvita embarks on sustainable strategy

August 17, 2023

Agribusiness & Trade: Comvita embarks on sustainable strategy

Despite the pandemic and border restrictions, New Zealand mānuka honey exporter Comvita was able to elevate its market share in mainland China from 39 per cent to an impressive 60 per cent.

Andy Chen, Regional CEO APAC for Comvita, shared the story behind this success at the China Business Summit last month.

He explained that the brand’s New Zealand origin and reputation as the largest mānuka honey manufacturer had been key selling points in the past, but these narratives lost their effectiveness several years ago, resulting in a plateau in growth.

Chen explained that the China market is constantly changing. “In the last 5000 years of China, the only thing that has never changed is change,” he told the Summit.

“Chinese consumers are very open-minded. They embrace new stuff every day, but they are also impatient. We need new stories for them.”

In 2020, under the guidance of new leadership led by group chief executive David Banfield, the honey company began sharing the “Why Comvita?” story. Comvita began highlighting its strengths as a business — that it is not only a leader from New Zealand in terms of beekeeping, but also emphasising its position as the only brand worldwide to ensure quality control from “land to hand”, including comprehensive soil health management and rigorous testing procedures. Storytelling around these areas helped Comvita connect with Chinese consumers and secure rapid growth in the Chinese market.

In 2022, Comvita again adapted, this time asking: “What is more relevant to Chinese consumers after the pandemic?”

Chen says Comvita’s consumers tend to be upper-middle class, well-educated, and environmentally conscious even before the pandemic. As a response, Comvita unveiled its “Harmony Plan,” demonstrating its commitment to sustainability, carbon neutrality by 2025, and bee welfare initiatives.

As part of this, Comvita is committed to achieving carbon neutrality by 2025, and ultimately becoming carbon positive by 2030. It is minimising its environmental impact through carbon reduction and improving the circularity of its packaging.

Comvita has committed to the rescue of 10 million bees annually and aspires to extend this to 100 million. It is achieving this by being at the forefront of ethical bee welfare standards, and through its global partnerships with dedicated beekeepers and rescuers, uniting efforts to protect hives and uplift the welfare of bees.

Another key aspect of Comvita’s Harmony Plan is nurturing biodiversity and restoring natural ecosystems. It is planting native bush and trees across New Zealand and has plans to do so in China. It has committed 1 per cent of its profits to local communities, giving employees a day off each year to help people in the communities around them.

Chen told the China Business Summit that these narratives, underpinned by tangible and demonstrable actions, are resonating well among its customers — particularly those residing in Tier-1 Chinese cities such as Beijing, Shanghai and Guangzhou — and have enabled Comvita’s remarkable growth in the region to continue.

“We are real, we are genuine, and we are leveraging our industry knowledge and expertise to help people and the communities wherever we go,” he says.

FIFA Women’s World Cup – impact on New Zealand (LinkedIn)

August 15, 2023

China Business Summit 2023: Rebuilding tourism and education links

July 17, 2023

New Zealand’s thriving tourism and export education links with China were heavily impacted during the pandemic years, enduring significant challenges and setbacks. The reopening of borders has seen a remarkable revitalisation of these connections. The return of foreign tourists has been a prominent bright spot for New Zealand’s economy, and there has been a notable increase in study visa approvals, particularly for universities. This panel will share perspectives on the changed landscape, including new strategies adopted to rebuild business, and the inspiring wins and war stories that have emerged along the way, showcasing the resilience and adaptability of the sectors.

Lisa Li, Managing Director, China Travel Service
Grant Webster, Chief Executive, Tourism Holdings
Professor Dawn Freshwater, Vice-Chancellor, University of Auckland
Dr Wiremu Doherty, Chief Executive, Te Whare Wānanga o Awanuiārangi
Moderator: Tim McCready

China Business Summit 2023: Marketing health, wellness and innovation to China

July 17, 2023

This session will uncover the strategies, insights, and innovative approaches that have made Comvita and Fonterra leading names in the industry. Speakers will share the intricacies of navigating and innovating for Chinese market and effectively promoting health and wellness to the region.

Andy Chen, Regional CEO, APAC, Comvita
Justin Dai, Vice President Foodservice, Fonterra Greater China
Moderator: Tim McCready

China Business Summit 2023: Prize draw

July 17, 2023

Prize draw courtesy of Air New Zealand with Auckland Business Chamber’s Live and Digital events coordinator Katy Riddell.

China Business Summit 2023: Call to order

July 17, 2023

MC: Tim McCready

China Business Summit 2023: Summit close

July 17, 2023

MC: Tim McCready

Future of Consumption (Asia NZ Foundation & Auckland Business Chamber)

June 20, 2023

FUTURE OF CONSUMPTION – SESSION ONE from Auckland Business Chamber on Vimeo.

FUTURE OF CONSUMPTION – SESSION TWO from Auckland Business Chamber on Vimeo.

The future of consumption is constantly evolving, with new technologies and innovative practices transforming the way we consume foods to the sustainable practices we adopt. From sustainability and vertical farming to cell-based cuisine, the future of consumption is full of exciting developments.

To help you stay ahead of the curve and gain valuable insights, you will learn about the impact of sustainability, vertical farming, and cell-based cuisine on the future of food, as well as how these practices are being implemented in the industry.

Join the Asia New Zealand Foundation and the Auckland Business Chamber for two sessions delivered digitally on the 20th of June. These sessions will take a deep dive into these seismic changes with business leaders from the Asia region to discuss the forces, the opportunities, and the challenges that are shaping the future of consumption.

Capital Markets: Can ChatGPT predict share price performance?

May 25, 2023

It’s clear that the capital markets will continue to face significant headwinds, with many of the same pressures and external forces that have shaped the sector in recent years still in play.

Persistently high inflation remains a top concern. While it remains stubbornly elevated, there are encouraging signs that it may have peaked after a considerable effort from central banks to rein in spending.

Much of the supply chain disruption caused by Russia’s invasion of Ukraine has stabilised, but persistent geopolitical tensions and fragmentation, particularly between China and the United States, continue to pose a risk to economic and financial stability.

Adding to the complexity, the pandemic-induced global talent shortage is still acutely felt in multiple sectors, including certain areas of the capital markets.

Gaining momentum are several megatrends that have become entwined with the capital markets sector. These include the rapid technological evolution, the growing need for robust cybersecurity measures to protect against digital threats, and the ever-increasing demand for sustainable investment options.

Against this backdrop, here is a wrap of some of the key issues that are likely to shape the capital markets over the coming year.

Key drivers for capital markets

Despite a challenging global economic environment, the Asia-Pacific region is expected to offer some hope for the coming year.

Earlier this month, the International Monetary Fund (IMF) released a report on the region, noting that despite weakening external demand — such as the downturn in demand for tech exports — domestic demand has remained strong. China’s reopening is providing fresh impetus to the region and a glimmer of optimism for the rest of the world.

The IMF projects Asia-Pacific’s GDP to increase this year to 4.6 per cent, after growing 3.8 per cent in 2022 and contributing around 70 per cent of global growth. This will be driven primarily by the recovery in China as a result of its reopening and surging consumption, along with resilient growth in India.

It said the near-term economic impact of China’s recovery “will likely vary across countries, with those more heavily reliant on tourism likely reaping the most benefit,” and expects the rise in China’s imports to be most strongly reflected in services.

But despite its optimism for the region, the IMF downgraded its projections for Japan, Australia, New Zealand, Singapore and South Korea.

“Stronger external demand from China will provide some respite to advanced economies in the region, but is expected to be largely outweighed by the drag from other domestic and external factors,” it said.

Mind v machine in investing

A few months ago, ChatGPT was launched publicly and has quickly disrupted diverse sectors.

Analysts at Goldman Sachs believe artificial intelligence (AI) algorithms could ultimately replace 300 million jobs, and with its ability to interpret vast amounts of data and identify patterns, AI is expected to significantly disrupt the capital markets.

Recently, the University of Florida analysed the accuracy of ChatGPT in predicting whether a news item would affect stock prices positively or negatively.

The results showed AI could make accurate predictions on stock performance and demonstrated that traditional models did not provide any further predictive power over ChatGPT.

Since AI algorithms can process market data in real time, they can react to changes faster than ever before. This will inevitably lead to more algorithmic trading, where machines are able to make trades at the appropriate time without human intervention.

Financial firms are already using AI to understand their customers better. As this tool is refined, it will be able to assist in developing more personalised products and services based on customer behaviour and potentially other public data, such as social media activity.

AI-driven technologies are also being used to detect fraud and money laundering. By analysing large pools of data and identifying suspicious patterns, AI can help financial institutions prevent fraud far more quickly than before.

While AI offers an exciting future for the capital markets, there are some concerns that its increased use could have negative consequences, such as creating market bubbles or amplifying financial instability. But despite that, the rapid introduction of AI tools means that by this time next year, they will undoubtedly have had a significant impact on the sector, offering faster and more accurate decision-making and analysis.

ESG focus remains high but pushback is growing

Investing with ESG principles in mind has become a hot topic and the fastest-growing segment of the asset management industry.

ESG principles consider environmental, social and governance factors alongside financials.

Ethical investment principles saw companies unwind their investments in Russia last year and the pandemic highlighted the need to consider societal impacts alongside investments. Locally, the recent climate events highlighted the importance of integrating ESG factors into investment strategies.

Despite growing interest in sustainable investing, the number of new sustainable fund launches has declined this year, according to financial services firm Morningstar. Regulatory uncertainty and increasing concerns about greenwashing are likely contributing to this trend, highlighting the need for greater transparency and accountability in the ESG space.

But while major investors continue to emphasise the importance and performance of ESG investing, some of Wall Street’s largest asset managers, private equity firms and brokers have warned that a backlash against sustainable investing has become a significant risk.

Larry Fink, CEO of BlackRock — one of the world’s largest asset managers — was one of the early and vocal supporters of ESG and stakeholder capitalism. However, in his annual letter this year, he de-emphasised ESG investing and entirely avoided using the three-letter acronym.

ESG has become a complex and challenging topic, particularly in the United States, where anti-ESG sentiment has gained momentum. Republican governors from at least 19 US states have pledged to resist ESG investing, and high-profile Republican figures Mitch McConnell and Ron DeSantis have campaigned against the use of strategies that penalise fossil fuel producers.

According to Fink, Republican state treasurers withdrew around US$4 billion ($6.3 billion) from BlackRock last year.

There are indications that US investors’ interest in green investing is waning due to repeated attacks on “woke capitalism”.

Scepticism towards ESG investing is likely compounded by the poor performance recently by technology stocks — a sector that green funds typically favour.

Increased interest in alternative investments

Alternative investments, or “alts”, are gaining popularity and finding their way into the portfolios of everyday investors.

These investments, which include hedge funds, private equity, venture capital, cryptocurrencies, commodities and rare collectables, have little or no correlation with traditional asset classes like stocks and bonds, providing investors with more diversification options.

The alternative investment industry gained momentum and accessibility after the economic downturn in 2008. With last year’s volatile stock market and the anticipation of slower growth and persistently high inflation, demand for alternative investing continues to rise.

Previously, alternative assets were only easily accessible to sophisticated investors. However, the growing number of alternative exchange-traded funds (ETFs) and managed funds are making them more mainstream, as investors look beyond conventional asset classes for returns in an unpredictable year.

All eyes on October

The coming general election is poised to have a significant impact on New Zealand’s capital markets.

Current polling suggests Labour v National could be one of the closest contests in some time, and likely to hinge on the decisions of kingmaker coalition parties — potentially Te Pāti Māori or New Zealand First.

Elections are viewed as significant risk events for market participants due to the potential changes in government policy and associated uncertainty.

It is already clear that wealth inequality, tax and inflation will feature prominently in the upcoming political debates and investors will be closely assessing the policies, platforms, and “bottom lines” of parties, and their wider implications for the economy and capital markets.

In the lead-up to October 14, the stage is set for a period of increased fluctuations in share prices and currency value, and uncertainty in the capital markets.