Quality goes to front of queue

Export earnings from value-added food and beverages have grown at 10 times the rate of commodity exports since 2000, a Massey University study says.

For the second consecutive year, more than half of all exports were deemed value-added - meaning they commanded a premium price after processing or marketing.

The study, commissioned by New Zealand Trade and Enterprise, says value-added exports are up 53.6 per cent, from $5.28 billion in 2000 to $8.11 billion last year.

Commodity export revenue during the same period increased 5.3 per cent, from $6.57 billion to $6.92 billion.

Trade and Enterprise group general manager Rod MacKenzie said the result showed the industry was clearly focused on change.

"Increasing value-added exports is vital to meet the challenges the food and beverage sector faces from fluctuating commodity prices and foreign-exchange movements.

"We welcome the ongoing shift to exporting innovative new products that can command higher, more sustainable prices in world markets."

The overall proportion of value-added export earnings remained relatively stable last year compared with 2003, edging up 1 per cent to 54 per cent, but the value of those exports grew 6.7 per cent.

MacKenzie said innovation was making a significant contribution to increased earnings.

Those sentiments were echoed by the research project manager, Professor Ray Winger of Massey University.

"There is clearly a growing sophistication in product development and marketing innovation which is essential for long-term sustainability and to deliver what the markets and customers want."

The biggest value-added earners were meat at $3.04 billion, dairy at $2.54 billion and seafood at $1.03 billion.

Aggressive market development, quality and service saw Marlborough company New Zealand King Salmon increase exports last year from about $38 million to $45 million.

Don Everitt, the general manager of sales and marketing, said profits were increased despite the negative impact of a high dollar.

"We are focused on creating products to suit changing consumer lifestyles."