Bypass Kiwi Made?

There's a real challenge amongst companies wanting to trade on the "New Zealand" brand both domestically and internationally. Over the last few years there have been an increasing number of New Zealand companies - iconic brands and much smaller businesses alike - moving manufacturing offshore to reduce costs.

The majority of Orca's products have always been made overseas as that is where the production facilities with expertise in the types of products we make are based. However, recently we've been looking at making some products in New Zealand and it's been an interesting experience.

Any drop in the New Zealand dollar certainly makes it more attractive to manufacture and export from New Zealand to other markets. The big challenge is of course the cost of production, compared with Asia.

Made in New Zealand is certainly a great marketing tool, but its limitations on the practical day-to-day operations of a New Zealand business that wants to be competitive around the world are obvious.

The Made from New Zealand initiative reflects the need for companies to be able to retain the intellectual property for their brand and products in New Zealand, but make the most prudent business decisions when it comes to things like origin of production.

Research we saw recently indicates that US consumers view New Zealand favourably in their buying decisions. But the premium they are willing to pay for a product made in New Zealand, compared with one made somewhere like China, doesn't justify the difference in production cost.

In saying that, we've just launched a New Zealand-made Merino range and the initial feedback from retailers and consumers is really positive. We approach the range with a different mindset to our other products and at the moment it seems to be working.

There have reports in Australia that consumers are flocking to Australian-made products and shunning foreign goods thanks to patriotism caused by concerns over job losses and an uncertain economy.

With the state of the New Zealand retail sector, and the almost continual round of sales, it will be an interesting exercise to see how much importance New Zealanders place in buying a New Zealand-made garment, when there might be a cheaper, foreign-made alternative.

We'll never make all of our products in New Zealand, but this process has shown me that for the right products it can definitely be done, and there are great companies here that prove our manufacturing sector can make it work.

 

Scott Unsworth