Massive marketing research effort is heeded: Watties

Press, 2 August 1985, Page 20

Massive marketing research effort is heeded: Watties

New Zealand must have a massive research investment into world wide trends in primary product consumption to have any hope of regaining a high standard of living, according to the international division manager of Wattie Industries. Mr Barry Brill “New Zealanders are abysmally ignorant of dietary trends, religious and cultural preference, infrastractural requirements and other factors applying to the markets which are important to us” he told the recent Dominion conference of Federated Fanners. He called for a research effort into these and other market factors at least equal to the 5100 million-a-year expenditure on primary production research by the Ministry of Agriculture and the Department of Scientific and Industrial Research. Mr Brill, a former member of Parliament and under-secretary for energy in the second'.Muldoon administration, is a leading player in the “More Market” orchestra led by the present Minister of Overseas Trade and Marketing, Mr Mike Moore. Watties is one of the five biggest companies in New Zealand, with an annual turnover of 5700 million to generate a before-tax profit of about $5O million. Its international division sells processed foods throughout the world. It is corporately cross-linked with New' Zealand Forest Products (timber), the Goodman group (milling and baking), Waitaki NX. Refrigerating (meat) and Elder IXL in Australia, each of which is the biggest company in its field. New Zealand must attempt to influence its trading future by establishing a data base on market conditions and trends such as that maintained by the United States Department of Agriculture, said Mr Brill He acknowledged that world demand for food products was expected to rise, especially in the middleincome and newly industrialised countries. “This could sustain increasing volumes of New Zealand farm commodities if everything goes right in terms of dietary patterns, trends in domestic production. and a host of other social political and commercial factors fall our way,” he said. “The location of the volume growth markets is also in our favour, as most are either in the Pacific Basin or the Middle East “However such a bald statement implies that New Zealand knows exactly what niches are opening 'up in various areas, how it neeeds to present its products to take advantage of those opportunities, how to develop and capture the right infras-

tructure for distribution of our products and the steps required to beat off competitors who may be eyeing similar prospects. “Unfortunately, I believe all these assumptions are totally unjustified.” New Zealand was the only member of the “rich man’s club” (OE.CJJ.) which remained predominantly dependent on agriculture for its national income. “One of the failings of successive governments has been their inability to communicate to New Zealanders the importance of foreign exchange earnings. “Most of the other requirements for growth, labour, capital or natural resources, are present in relative abundance, but 30 per cent of our entire output is required to be imported. “Because our export earnings have been insufficient to fund that vital 30 per cent, internal economic activity has had to be constrained for the past 30 years. “An investment which would allow us to increase foreign exchange earnings would permeate every section of the economy and give us growth rates'which could bring us back to being one of the lop three' wealthy countries.” He said New Zealand had traditionally divided farm-

ing and manufacturing and often these lobbies had de- ' veloped opposing views on . government policies. But a look at the major i manufacturing companies on the New Zealand stock ’ exchange showed that the truly successful ones were those which processed and ;; built upon the products of the land, be said. j In order of size these were: Fietcher-Challenge, T Forest Products, CarterHoi t, Wattie Industries, Goodman Group. Lion ‘ Breweries and Waitaki 4 N. : “New Zealand is industrialising by adding value to T its primary production and moving closer to the other O. countries. "New Zealand is at its 1 best when the farmer pro- . duces efficient raw “ materials and the proces- / sor-manufacturer efficiently takes these through to mar- 1 ketable products (preferably Don-commodity) which al- 1 lows the development of - brand franchises and avoids “ commodity fluctuation cycles.’ " All primary products . were treated in some way and value added before they left the shore and the points . at which they became "manufactured” was a matter of semantics. So the two lobbies should work together with support from "i the Government. Mr Brill distilled two broad approaches for sue- - cess in agricultural produc- I tion and marketing in the 1 •uture. : “When we have to stay J with the commodity trade ; then we differentiate our ; products to the maximum ( extend acceptable by the i market and demand ■ premium. J “Wherever possible we go s further and present a unique J ■manufactured' product in > which we can have much j greater input into control- > ling the market rather than * being at the mercy of the , tradewinds. The key is j research, followed by risk- ( taking innovation.” l