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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

EqualizeNZ: celebrating women in sport, business, culture and society (LinkedIn)

August 14, 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

Infrastructure: A billion-dollar plan to build resilience (NZ Herald)

June 7, 2023

Infrastructure: A billion-dollar plan to build resilience (NZ Herald)

The Government set aside $6 billion in last month’s Budget as part of a National Resilience Plan for strategic investments to “build back better” following the damage from Cyclone Gabrielle and the Auckland Anniversary floods.

This is in addition to the Government’s $71b infrastructure plan over the coming five years.

Damage from Cyclone Gabrielle and the Auckland Anniversary weekend floods has been estimated by Treasury as ranging from $9b to $14.5b — second behind the Canterbury earthquakes in terms of damage from natural disasters New Zealand has faced. Of this, $5b to $7.5b of damage is expected to relate to infrastructure owned by the central and local governments. These costs relate to damage, without including all the immediate and ongoing support for communities and businesses.

The North Island weather events hit the country when the Budget 2023 process was already relatively advanced, requiring Minister for Cyclone Recovery and Minister of Finance Grant Robertson to reprioritise other initiatives in the draft Budget to make way for the response.

Robertson said while the investment will initially focus on building back better from the recent weather events, it will include future-proofing road, rail and local infrastructure wiped out by extreme weather, as well as telecommunications and electricity transmission infrastructure.

“Addressing vulnerabilities in our infrastructure systems to function during adverse conditions and quickly recover after an event is fundamental to the wellbeing of communities,” he said.

“I expect to continue to build on the plan over many years to reduce the severe infrastructure deficits that have held New Zealand back.”

The package would also deliver a new Crown infrastructure delivery agency, Rau Paenga, which could be engaged to assist agencies to deliver the projects in the National Resilience Plan at a cost of $100 million over five years.

This funding follows the $1.1b pre-Budget announcement to assist with repairs to basic infrastructure including road, rail and schools and providing flood resilience support.

Infrastructure funding in the announcement included:

Roading: An additional $275m into the National Land Transport Fund to support the immediate response and recovery costs for state highways and local roads. This comes on top of the $250m allocated to fix roads in the aftermath of Cyclone Gabrielle.
Rail: $200m to repair North Island railways, with repair work to rail tracks, sleepers, bridges and other structures on the North Auckland line, Palmerston North to Gisborne line, Auckland metropolitan network, North Island main trunk and East Coast main trunk.
Schools: The more than 500 North Island schools damaged by the severe weather events would receive $116m for repairing and rebuilding, with additional funding for the potential redevelopment or relocation of schools. A further $700,000 would be invested over two years for Special Reasons Staffing funding, with $315,000 available immediately.
Stopbanks: Regions affected by the recent North Island extreme weather events will be able to apply for funding from an initial $100m in Budget 2023 for local solutions to keep them safe from future floods. This includes raising stopbanks and shoring up lifelines that failed during the record rainfalls.