Natural Products To Be Billion Dollar Industry
3 September 2008
EMBARDOED UNTIL 5:30PM on 3rd SEPTEMBER 2008
Natural Products To Become Billion Dollar Industry
New Zealand’s natural products industry is on the brink of massive expansion with a five year plan to grow to a billion dollar local and export industry.
Natural Products New Zealand, the industry body representing a significant proportion of New Zealand natural health product manufacturers, commissioned PricewaterhouseCoopers to investigate the industry’s current and emerging capabilities with a view to developing an implementation plan to grow the industry. The report was launched by Hon Phil Goff at a reception at Parliament this afternoon.
Michelle Beckett, executive director of Natural Products New Zealand said given the small domestic New Zealand market, this means that exports of natural products needs to more than double in value terms.
“The natural products industry’s five year vision is certainly challenging but achievable. It will require a concerted effort by individual firms, supported by the industry collective and the government. We would like to see more government funding for strategy and export promotion. The sort of growth we’re looking for cannot be achieved by private investment alone. There is significant collective benefit not only to the sector but to the New Zealand economy and taxpayer.”
Minister for Trade, Hon Phil Goff said that overseas, New Zealand is already perceived as clean and green and has a reputation for integrity and safe products and he believes the potential is there for transformational growth for New Zealand’s natural products industry.
“The industry has real advantages in New Zealand, such as a unique bio-diversity combined with this country’s reputation for high quality, safe natural products and a growing international market. This contributes to a positive outlook for the industry. Achieving the industry’s vision will require sustained investment of both resources and time across the
natural products businesses, the industry, from the government and Natural Products New Zealand,” says Mr Goff.
According to Ms Beckett, the natural products industry is in a prime position to capitalise on two major trends. Firstly, aging baby boomers are having a significant impact on the health needs of the population with trends towards prevention, better diet and the use of non-medical products for skincare and dietary supplementation.
Secondly, there is a growing interest and awareness by consumers and businesses about how their behaviours can contribute to reducing environmental damage.
“There is strong evidence that these two factors explain much of the growth in the demand for natural products and the expansion of the market globally,” says Ms Beckett.
Identifying ingredients and developing
products that are either unique to New Zealand or which can
be sourced more cost effectively and/or at a higher quality
in New Zealand would deepen the competitive advantage to the
New Zealand natural products industry.
There are currently only a handful of ingredients that are totally unique to New Zealand. Potentially however, New Zealand fauna and flora both land and marine, is a significant untapped resource that may be a key “growth” driver for the industry over the next two decades.
The natural products industry’s key overseas markets include Australia, United Kingdom, United States, Japan and Singapore with the United States, China and Japan having significant growth potential.
In the USA, it is predicted that the anti-aging services and products market will grow 9.5% per annum to reach US$9.7 billion by 2009. This is a market that the natural products industry can target as consumers are looking for healthier options and are becoming more interested in botanical and natural products.
Exports of natural products can include finished products
as well as ingredients destined for other producers in the
food, cosmetics, nutraceutical and pharmaceutical
Currently, among the New Zealand sector’s biggest natural products foreign exchange earners are mussel extract powder, shark liver oils and fish oils, vitamin and mineral supplements, deer velvet, skincare body products and natural honey.
For the natural products industry to achieve its growth aspirations, it needs to have both the access to New Zealand-sourced ingredients with the unique features and an assured supply of all the raw materials that go into producing its products.
Given New Zealand’s extensive coastline and large marine Exclusive Economic Zone, marine-derived products appear to be highly promising to meet the health needs of consumers. Seaweed products, shellfish-derived glucosamine, Omega 3 and microalgae all have the potential for growth.
“As well as identifying suitable raw materials, extracting the saleable product and successfully marketing it both locally and internationally, a resolution of New Zealand’s regulatory system is essential to smooth the way forward for export growth. We need a consistent and clear regime that can be recognised by our trading partners and that will give us access to overseas export markets without incurring huge additional costs,” concluded Ms Beckett.