Savour success: five winning business strategies for the year ahead
Winidu Kannangara, Senior Partner – Business at Bank of New Zealand (BNZ).
This opinion piece on key business strategies for innovators in the food sector is by Winidu Kannangara, Senior Partner – Business at Bank of New Zealand (BNZ). BNZ is a category partner of the New Zealand Food Awards, judging the Business Innovation Award.
New Zealand's food and beverage exports are valued at approximately NZD $31 billion, making up almost half of all goods and services exported. According to MBIE, the industry possesses considerable untapped potential to expand, with the possibility of tripling exports over the next 15 years[1].
To unlock this potential, innovation is key. And to innovate, both on a large and small scale, businesses need the right insights. So we asked our partner, and sponsor of the Business Innovation Award, BNZ for its perspective on the year ahead. Here’s what Senior Partner Winidu Kannangara shared.
Beyond being a major lender, BNZ serves as a crucial economic hub connecting various businesses. As New Zealand’s largest business bank, we’re in a unique position to aggregate trends and distil industry insights to bring to the market.
For the upcoming year, we’ve identified five top business strategies:
1. De-risk supply chain
In the wake of the pandemic, we’ve seen a lot of businesses reassess their own capability, and reshore some, or all, aspects of the supply chain. Going forward this may involve having a mix of local and international partners, or it may involve building your own business capability across the value chain, investing in the infrastructure to bring distribution in-house, for example. Not only is there an increased economic opportunity with this approach, there’s also the chance to imbed values across the product ecosystem, to build new capabilities, and grow workforce opportunities.
2. Strike agile deals
Inflationary pressure is now widely understood by businesses and consumers alike. Your production contracts can be established to account for variation. As the cost of production goes up, having the ability built into contracts to dynamically pass that on could assist businesses through the inflationary cycle.
3. Invest (even more) in sustainability
Sustainability has transformed from a differentiating factor for conscious consumers to a mandatory requirement. Governments are introducing mandates, and major retailers are focusing on supplier emissions reduction. One successful local business owner recently told me that the single best investment they had ever made was in the hire of a sustainability manager for their business. This has directly resulted in savings, new product opportunities and in meeting the targets they have set to operate sustainably, for the long-term.
4. Get set to grow
We know sector growth potential is at least three times larger than it is now, and that private capital interest is high, and growing year-on-year. According to the latest EY New Zealand Private Capital Monitor, ‘2022 was another year of record activity, with NZD $5 billion of combined investments and divestments’[2]. But not every business is ready to receive the capital injection they need to expand. Investing in preparation is key, whether you choose bank lending or private capital. At BNZ, we connect businesses with the right experts to get investment ready. Things like a clearly articulated plan, governance framework, professionally prepared financial statements, and secure IP are all key elements.
5. Experience new international markets
Our existing export destinations are incredibly important to us, but to truly reach our potential we need to build on those. This year India overtook China as the most populous nation on earth. With a growing middle class, there’s a strong opportunity for New Zealand-made FMCG goods in India, and likewise across ASEAN countries. The Association of Southeast Asian Nations (ASEAN) encompasses 10 Southeast Asian countries and is home to some of the world’s fastest growing emerging markets, such as Vietnam and Malaysia. To understand these unique business environments, and to build essential relationships requires first-hand experience.
This year’s New Zealand Food Awards Business Innovation Finalists, are a testament to the power of insight, strategy, and innovation in action. Their work highlights the many ways in which the sector is growing rapidly towards its potential, congratulations to all.
This blog post is solely for information purposes. It’s not financial or other professional advice. For help, please contact BNZ or your professional adviser. No party, including BNZ, is liable for direct or indirect loss or damage resulting from the content of this blog post. Any opinions in this article are not necessarily shared by BNZ or anyone else. References to third party websites are provided for your convenience only. BNZ and the New Zealand Food Awards accept no responsibility for the availability or content of such websites.
[1] MBIE: https://www.mbie.govt.nz/business-and-employment/economic-development/growing-the-food-and-beverage-sector/food-and-beverage-information-project/food-and-beverage-investor-guides/
[2] The New Zealand Private Capital Monitor. EY. 2023. https://assets.ey.com/content/dam/ey-sites/ey-com/en_au/topics/strategy/ey-new-zealand-private-capital-monitor-2023.pdf
