Making Waves - NZ Merino Company
John Brakenridge, CEO of the New Zealand Merino Limited, Wave Rider.
New Zealanders suffer from a culture of "agricultural cringe", completely devaluing our primary sector, says John Brakenridge, CEO The New Zealand Merino Company Ltd. In fact, Brakenridge says, it is an 'Agri Wave' of value-added primary products that can drive NZ success in the global marketplace.
The compelling message, "Change our national attitude - let's celebrate the primary sector" is the central theme of Brakenridge's address to the Employers and Manufacturers Association (EMA) Northern's 'Go Global' event at the Auckland Town Hall today.
Brakenridge speaks from experience. The New Zealand Merino Company is leading fundamental change in how NZ Merino is marketed to the world, shifting the perception of NZ Merino from a low value wool commodity into a high value fibre. It is now sought after internationally and is increasingly utilized in the New Zealand fashion and sportswear industries. Contracts worth many millions of dollars are now locked in with high-profile users in Europe, Japan, United States and New Zealand.
An eclectic approach to marketing has enabled the company to buffer its exposure to fluctuating foreign exchange rates. A recent contract with the US garment brand Smartwool, encouraged the American company to lock into a NZD$20 million contract for the next three years at sustainable levels for both partners. The development of the local New Zealand market has also provided additional hedging against fluctuating exchange rates.
The consequence of The New Zealand Merino Company's initiatives has been considerable investment into textile industry value-add in New Zealand. The scope for New Zealand to leverage off just the Merino sector is in the hundreds of millions as evidenced by the emergence of global brand initiatives such as Icebreaker Nature Clothing and a myriad of other brands and companies adding value to the New Zealand Merino clip.
"The secret of this success has been through raising our sector's self esteem, the pride in our product, investment in technology, research and development, marketing, employing the best people, and building appropriate relationships."
"New Zealand is one of the wealthiest countries in the world in terms of natural capital per capita, yet we are making underwhelming use of it," Brakenridge says. "We have an abundance of premium quality primary products, combined with a universally recognised clean, green image, yet we are not promoting or capitalising on that. In fact, in typical Kiwi-style, we lack self-belief, and are overly modest about our natural assets. We actually undervalue them.
"We have produced a culture that puts down the primary sector. This devaluation starts at the top and permeates the political, economic, business and even social sectors of society. Agribusiness and forestry seem not to be a government priority yet produce nearly 70% of merchandise exports. In recent years there has been a significant reduction in marketing and research and development funding with the focus turning to the supposedly 'new age economy'. Our primary production, marketing and innovative potential has the capacity to be world leaders, with considerable value-add and manufacturing scope."
There's plenty to celebrate. Through producing 70% of merchandise exports, the primary sector generates billions in foreign exchange. Productivity levels have also risen significantly in the key primary export industries, illustrating the sector's ability to adapt to the international environment and to produce more from less through better management and genetics.
Rob Davidson, Meat and Wool Economic Service, says since 1990/91 agriculture GDP has increased by 80%, compared to a 37% increase in the rest of the economy.
"It's agri-success, and as a nation we need to build on it. It's only the tip of the iceberg. There's a wealth of untapped potential in the agri-sector, particularly around technology, attribute identification and brand marketing. By celebrating and promoting an 'Agri Wave', we're making better use of our natural assets to benefit New Zealand business and the economy and will attract talent into the industry.
"The path to success is to shed our traditional commodity-based approach to primary produce and introduce innovation, and entrepreneurship, with new approaches to management and marketing. We need to look at ways to create added value, look for new markets, form new partnerships and invest in research and development."
While The New Zealand Merino Company recognises there is still much to be done, Brakenridge is encouraging the rest of the agricultural sector to join together and work more collectively in promoting our culture and globally building on New Zealand's core competency of primary production and its related technologies.
"Dairy, forestry, horticulture, agriculture, sheep and beef, viticulture and aquaculture, are all essential to generating an Agri Wave. Then maybe Kiwis can stop the agricultural cringe and recognise - as the rest of the world does - the untapped potential of our incredible natural capital," he says.
John Brakenridge is presenting at the EMA Northern's 'Go Global' event at The Great Hall, Auckland Town Hall today, Friday 27th February.