IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE

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IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
IS THIS THE BEGINNING
OF THE END OR THE END
OF THE BEGINNING?
Finding the future of the New Zealand
food and beverage industry
DISCUSSION DOCUMENT; v1.01; Late 2019
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
IS THIS THE BEGINNING OF THE END OR
THE END OF THE BEGINNING?
Finding the future of the New Zealand food and beverage
industry

DISCUSSION DOCUMENT
Late 2019
V1.01
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
DISCLAIMER
COPYRIGHT                                              LIMITATIONS
All photos used in this discussion document were       This work is based on secondary market research,
either sourced by Coriolis from The New Zealand        analysis of information available (e.g. Statistics NZ),
Story, a range of stock photography providers as       and a range of interviews with industry participants
documented or are low resolution, complete             and industry experts. Coriolis have not
product/brand for illustrative purposes used under     independently verified this information and make
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and ‘review and criticism’. Our usage of them          that such information is accurate or complete. In
complies with New Zealand law or their various         many cases regional data is incomplete or not
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                                                       significant modelling and estimates.
                                                       If at any point you are unclear where a number
                                                       came from or how a conclusion was derived,
                                                       please contact the authors directly. We are
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                                                                                                                 3
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
This discussion document exists to not to give you the
  answer, but to spark thought and discussion on the
       future of New Zealand’s largest industry.
 The views expressed are those of the Coriolis team
involved and do not represent Government policy, or
  the views of the Ministry of Primary Industries, the
  Ministry of Business, Innovation and Employment or
          New Zealand Trade and Enterprise.

                                                          4
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
The wider food chain directly employs one in five working people
in New Zealand
 NZ POPULATION BY EMPLOYMENT                                                                                      FOOD CHAIN EMPLOYMENT BY SECTOR
 People; m; 2017                                                                                                  People; %; 2017                 NOTE: Tight definition; excludes all
                                                                                                                                                    inputs and support services; if
                                                                                                                                                     included likely closer to 1/3

                                            Over 65
                                             15%                   Doing                                                                           Primary
                                                                 something
                                                                 other than
                                                                                                                                                    25%
                                                                                                                           Foodservice
                                                                  working
                   Under 15                                         13%                                                       31%
                     20%
                                                                         F&B Chain                … or one in five of
                                                                                                  working population
                                                                           10%

                                                                                                                                                      F&B
                                                                                                                              F&B                     Mnfg.
                                              Employed in                                                                   Retailing     F&B         19%
                                              other sectors                                                                   18%         Whls.
                                                  42%                                                                                     7%
                                         Total = 4.8m                                                                               Total = 493,000
Whls – wholesaling; Mnfg – manufacturing; Source: Statistics NZ; Coriolis analysis and classifications
                                                                                                                                                                                    5
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
In regions outside of Wellington & Auckland, this wider food
chain directly employs 20-40% of the working population
 PERCENT OF REGIONAL EMPLOYMENT IN THE FOOD CHAIN                                                                                                                                                      NOTE: Tight definition; excludes all
                                                                                                                                                                                                         inputs and support services; if
 % of employees; 2018                                                                                                                                                                                     included likely closer to 1/3

  40%

  35%                                                                                                                                                                                                                       Food Retail &
                                                                                                                                                                                                                            Foodservice
  30%
                                                                                                                                                                                                                            Wholesaling
  25%
                                                                                                                                                                                                                            Processing
  20%

  15%

  10%                                                                                                                                                                                                                       Primary
    5%

    0%
                 Wellington

                              Auckland

                                                        Bay of Plenty

                                                                        Canterbury

                                                                                     Otago

                                                                                             Mana-Wanga

                                                                                                          Northland

                                                                                                                      Waikato

                                                                                                                                Nelson/Tasman

                                                                                                                                                West Coast

                                                                                                                                                             Hawke's Bay

                                                                                                                                                                           Gisborne

                                                                                                                                                                                      Taranaki

                                                                                                                                                                                                 Marlborough

                                                                                                                                                                                                                Southland
Source: Statistics NZ; Coriolis analysis and classifications
                                                                                                                                                                                                                                              6
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
Food & beverage is the major New Zealand export industry,
accounting for almost half of total goods and services exports
 TOTAL NEW ZEALAND EXPORT OF GOODS AND SERVICES BY CATEGORY
 NZ$; b; 2017
                                                 $33.6           $1.7                     $6.5           $1.0              $9.0                            $5.1                     $16.6
                                                                                                                                                  Communications services
                                                                                                                      Animal biproducts
                                                                                                                                                          $0.1
                                                                                                                            $0.5

                                                                                                                                                     Financial services
                                                                                                                                                            $0.7
                                                                                                                           Metals
                                                                                                                            $1.9

                                                                                                                                             Computer and information services
                                                                                                                                                           $0.7
                                                                                                                        Stone/Glass
                                                                                                                            $0.7
                                                                                                                                                 Royalties and licence fees
                                                                                                                    Skins, Leather, & Furs
                                                                                                                                                            $0.4
                                                                                                                   Textiles $0.4                                                    Travel
                                                                                                                    $0.2           Apparel
                                                                                                                                                                                    $13.8

                                                                 Confidential/other
                                                                                                          Oil                        $0.1
                               Food & Beverage                                        Wood & products
                                                                                          $6.0           $0.9
                                                                                                                       Plastics/Rubbers
                                                                                                                              $0.5

                                                                       $1.7
                                    $33.6                                                                                Chemicals
                                                                                                                           $1.0
                                                                                                                                                      Business services
                                                                                                                          Vehicles                          $1.9
                                                                                                                           $0.3
                                                                                                                   Medical Devices, other
                                                                                                                           $0.7

                                                                                                                                                           Media
                                                                                                                    Machinery / Electrical                 $0.3
                                                                                                                           $2.1

                                                                                                                                                       Other services            Transportation
                                                                                                        Minerals                                           $0.8                       $2.7
                                                                                           Wool
                                                                                           $0.5          $0.1               Other
                                                                                                                            $0.4
                                             Food & Beverage   Top Secret              Wood & Wool       Oil &          Other Goods                       Services                   Travel
                                                                                                        Minerals

Source: SNZ; Coriolis analysis and classifications
                                                                                                                                                                                                  7
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
Machinery / Electrical
                                                                                                                                                                                                                                                 8

                                                                                                                                                                                         Vehicles
                                                                                                                                                     NET DEFICIT

                                                                                                                                                                                         Oil
The food & beverage industry achieves a large trade surplus,

                                                                                                                                                       -$347m

                                                                                                                                                                                         Chemicals
while most other sectors are underperforming or in deficit
                                                               NET TRADE POSITION IN TOTAL NEW ZEALAND TRADE (EXPORTS-IMPORTS)

                                                                                                                                                                                         Plastics/Rubbers
                                                                                                                                                                                         Other
                                                                                                                                                                                         Apparel
                                                                                                                                                                                         Transportation
                                                                                                                                           DEFICIT
                                                                                                                                           TRADE

                                                                                                                                                                                         Business Services
                                                                                                                                                                                         Medical Devices, Other
                                                                                                                                                                                         Other Services
                                                                                                                                                                                         Metals
                                                                                                                                                                                         Royalties and Licence Fees
                                                                                                                                                                                         Textiles
                                                                                                                                                                                         Stone/Glass
                                                                                                                                                                                         Computer and Info Services
                                                                                                                                                                                         Minerals
                                                                                                                                                                                         Communications Services
                                                                                                                                                                                         Skins, Leather, & Furs
                                                                                                                                                                                         Financial Services
                                                                                                                                           SURPLUS

                                                                                                                                                                                         Media
                                                                                                                                            TRADE
                                                                                                                                                                                         Animal Biproducts
                                                                                                                                                                                         Wool

                                                                                                                                                                                                                      Source: SNZ; Coriolis analysis and classifications
                                                                                                                                                                                         Confidential/Other
                                                                                                                                                                                         Wood & Products

                                                                                                                          NZ$; b; 2017
                                                                                                                                                                                         Travel
                                                                                                                                                                                         Food & Beverage

                                                                                                                                                                                               -$5
                                                                                                                                                                               $5

                                                                                                                                                                                    $0

                                                                                                                                                                                                     -$10

                                                                                                                                                                                                            -$15
                                                                                                                                         $30

                                                                                                                                               $25

                                                                                                                                                       $20

                                                                                                                                                                   $15

                                                                                                                                                                         $10
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
Oil
                                                                                                                                                                                                                                    9

                                                                                                                                                                            Metals
Food & beverage is growing exports strongly, where most other

                                                                                                                                                                            Machinery / Electrical
                                                                                                                                                                            Wool
                                                                                                                                 SHRINKING
                                                                                                                                  EXPORTS

                                                                                                                                                                            Comm services
                                                                                                                                                                            Vehicles
                                                                                                                                                                            Skins, Leather, & Furs
                                                                                                                                                                            Apparel
sectors are underperforming or going backwards

                                                                                                                                                                            Textiles
                                                                                                                                                                            Other
                                                                10 YEAR NET CHANGE IN TOTAL NEW ZEALAND EXPORTS

                                                                                                                                                                            Minerals
                                                                                                                                                                            Plastics/Rubbers
                                                                                                                                                                            Other Services
                                                                                                                                                                            Chemicals
                                                                                                                                                                            Animal Biproducts
                                                                                                                                                                            Media
                                                                                                                                 GROWING

                                                                                                                                                                            Royalties and Licence Fees
                                                                                                                                 EXPORTS

                                                                                                                                                                            Medical Devices, Other
                                                                                                                                                                            Stone/Glass
                                                                                                                                                                            Transportation
                                                                                                                                                                            Computer and Info Services
                                                                                                                                                                            Financial Services
                                                                                                                                                                            Business Services

                                                                                                                                                                                                         Source: SNZ; Coriolis analysis and classifications
                                                                                                            NZ$; b; 2007-2017                                               Confidential/Other
                                                                                                                                                                            Wood & Products
                                                                                                                                                                            Travel
                                                                                                                                                                            Food & Beverage

                                                                                                                                                                            -$1
                                                                                                                                                                                  -$3
                                                                                                                                                   $9
                                                                                                                                                        $7
                                                                                                                                                             $5
                                                                                                                                                                  $3
                                                                                                                                                                       $1
                                                                                                                                $15
                                                                                                                                       $13
                                                                                                                                             $11
IS THIS THE BEGINNING OF THE END OR THE END OF THE BEGINNING? - Finding the future of the New Zealand food and beverage industry - MBIE
Iraq
                                                                                                                                                                                                                                                    10

                                                                                                                                                                                           Qatar
New Zealand has the highest ‘revealed comparative advantage’

                                                                                                                                                                                           Algeria
                                                                                                                                                                                           Kuwait
                                                                                                                                                                                           Japan
                                                                                                                                                                                           South Korea
                                                                                                                                                                                           Hong Kong SAR
                                                                                                                                                                                           Taiwan
                                                                                                                                                                                           Saudi Arabia
                                                                                                                                                                                           UAE
                                                                                                                                                                                           Singapore
                                                                                                                                                                                           Finland
                                                                                                                                                                                           Switzerland
                                                                                                                                                                                           China
                                                                                                                                                                                           Israel
                                                                                                                                                                                           Slovakia
                                                               REVEALED COMPARATIVE ADVANTAGE IN FOOD & BEVERAGE

                                                                                                                                                                                           Kazakhst an
                                                                                                                                                                                           Russia
                                                                                                                                                                                           Czech Republic
                                                                                                                                                                                           Germany
in food & beverage of any major exporter

                                                                                                                                                                                           United Kingdom
                                                                                                                                                                                           Sweden
                                                                                                                                                                                           Mexico
                                                                                                                                                                                           Canada
                                                                                                                                                                                           Austria
                                                                                                                                                                                           Philippines
                                                                                                                                                                                           Hungary
                                                                                                                                                                                           Romania
                                                                                                                                                                                           Italy
                                                                                                                                                                                           USA
                                                                                                                                                                                           Norway
                                                                                                                                                                                           Belgium
                                                                                                                                                                                           Malaysia
                                                                                                                                                                                           Ireland
                                                                                                             RCI index; top 54 exporting countries; 2016

                                                                                                                                                                                           Turkey
                                                                                                                                                                                           Portugal
                                                                                                                                                                                           South Africa
                                                                                                                                                                                           India

                                                                                                                                                                                                            Source: UN Comtrade; SNZ; Wikipedia; Coriolis analysis and classifications
                                                                                                                                                                                           Poland
                                                                                                                                                                                           France
                                                                                                                                                                                           Vietnam
                                                                                                                                                                                           Thailand
                                                                                                                                                                                           Australia
                                                                                                                                                                                           Spain
                                                                                                                                                                                           Net herlands
                                                                                                                                                                                           Colombia
                                                                                                                                                                                           Indonesia
                                                                                                                                                                                           Denmark
                                                                                                                                                                                           Peru
                                                                                                                                                                                           Chile
                                                                                                                                                                                           Brazil
                                                                                                                                                                                           Ukraine
                                                                                                                                                                                           Argent ina
                                                                                                                                                                                           New Zealand

                                                                                                                                                           8

                                                                                                                                                               7

                                                                                                                                                                   6

                                                                                                                                                                       5

                                                                                                                                                                           4

                                                                                                                                                                               3

                                                                                                                                                                                   2

                                                                                                                                                                                       1

                                                                                                                                                                                           0
Yet, there is a strong consensus in New Zealand that agriculture
cannot continue to grow

    “We can only feed 40       “We need to produce less     “We can’t possibly
      million people”                not more”              produce any more”

    “Agriculture is a sunset    “We are at the limits of   “Farmers are already
           industry”              the environment”          producing too much”

                                                                                  11
This report strongly disagrees with this consensus
               THE NEW ZEALAND CONSENSUS                                                  THE HERETICAL PARADIGM
          INSIDE THE “PASTORAL” BUBBLE THINKING                                          OUTSIDE THE BUBBLE THINKING
  New Zealand is a major food producer that leads the world;              New Zealand is a minor food producer that uses a large amount
        New Zealand agriculture is highly productive                              of land to produce very little relative output
  Current New Zealand land use is ideal and optimal as it was            Land use is a high risk discovery process with no one right answer.
                determined by market forces                                      Current land use is the result of historical activity
                                                                         New Zealand is a large country without a single monolithic climate.
  The plants and animals produced in New Zealand are highly                   Regions vary dramatically in their natural endowment.
  suited to the New Zealand environment (climatic and growing
                conditions) and thus will not change                       The animals and plants currently produced are a result of the
                                                                                  country or origin of past waves of immigrants
                                                                         The government has played a massive role in the development of
   The government does not have a role to play in new industry
                                                                         all major agricultural products in New Zealand;* the government
              development; just enforce the rules
                                                                            will need to play a role in the development of new products

New Zealand land use will not change significantly going forward                   New Zealand land use will continue to change

 New Zealand is globally competitive in the products it currently
                                                                          Agricultural competitiveness is a dynamic system; new producers
produces in large quantities; it is not competitive in the products it
                                                                           can and do enter markets; new entrants start in smaller niche
 does not produce or produces in small quantities; therefore New
                                                                            segments and “climb down the cost curve” as volumes grow
Zealand cannot produce new products as it will not be competitive
                                                                           Other rich, developed countries similar to New Zealand employ
   No one wants to work in agriculture and there is currently a
                                                                         significantly larger numbers of people in agriculture; technological
 shortages of low cost labour; therefore agriculture cannot grow
                                                                          change is occurring and products vary in their level of automation

                                                                                                                                           12
Broadly speaking, there are three key drivers available to
increase revenue and employment in the agrifood chain

1                                     2                              3
          LAND IN                         OUTPUT PER                     VALUE ADDED
                                                                                                    REVENUE
       PRODUCTION                     X    HECTARE                   X    PER TONNE             =    & JOBS
         (Hectares)                         (T/ha)                           ($/t)

    Re-evaluate viability of non-            Improving yields             Improving products
         agricultural lands
                                            Changing land use             Improve positioning
      Limit flow of lands out of
    agriculture (e.g. urban growth)        Increasing irrigation         Transforming product

                                          Using high productivity
                                          production systems (e.g.
                                               aquaculture)

                                                                                                              13
1. MORE FARM LAND
New Zealand is unlikely to bring new land into agriculture

1
          LAND IN
       PRODUCTION
         (Hectares)

    Re-evaluate viability of non-
         agricultural lands

      Limit flow of lands out of
    agriculture (e.g. urban growth)

                                                             14
Food production uses almost half of New Zealand’s land and
much of its oceans
 NEW ZEALAND LAND USE                                                                                                    NZ ECONOMIC ZONE*
 km2;      000; 2010                                                                                                     Area; depth; 2018
 Other government lands
  Non-Ag Tribal Lands
     Lifestyle blocks                                                                                                        Defined as 200
    Cities and towns                                                                                                         nautical miles from
        Idle lands
          Other       Other                                                                                                  coastline
                             41 16%

             Other DOC
              14 5%                                                     Farming
                                                                          126
                                                                         47%
                 National
                 parks &
                 reserves
                 71 26%

                                             Forestry
                                             (private)
                                              16 6%

                               TOTAL = 268,000 km2
*EEZ; Note: a nautical mile is 1,852 metres; Source: Statistics NZ; Department of Conservation; Sealord; Coriolis analysis
                                                                                                                                                   15
New Zealand already farms a reasonable percent of its total land
 area, similar to France or Italy, but much less than Ireland
   SHARE OF TOTAL LAND AREA USED IN AGRICULTURE INCLUDING PASTURE/RANGE
   % of hectares; 2017 or as available
                       0%   20%       40%        60%         80%       100%                           0%    20%       40%       60%       80%      100%                      0%   20%   40%   60%   80%   100%
      Nebraska                                                                          Lithuania                                                                Louisiana
  North Dakota                                                                           Oregon                                                                   Slovenia
  South Dakota                                                                              Spain                                                                  Florida
          Kansas                                                                            Idaho                                                                  Estonia
              Iowa                                                                       Czechia                                                                  Virginia
    Queensland                                                                           Belgium                                                                New York
            Texas                                                                       Kentucky                                                                 Tasmania
      Wyoming                                                                       New Zealand                                                             Pennsylvania
        Nevada                                                                             France                                                                  Alberta
   New Mexico                                                                                 Italy                                                      North Carolina
            Illinois                                                                    Bulgaria                                                                 Alabama
          Ireland                                                                       Portugal                                                                  Georgia
      Oklahoma                                                                          Slovakia                                                         South Carolina
       Montana                                                                 Northern Territory                                                         West Virginia
United Kingdom                                                                         Wisc onsin                                                                 Vermont
             NSW                                                                        Arkansas                                                                   Cyprus
              Utah                                                                     Delaware                                                               New Jersey
       Colorado                                                                        California                                                                Manitoba
         Indiana                                                                            Malt a                                                                Sweden
       Denmark                                                                            Greece                                                                   Finland
         Arizona                                                                     Washington                                                             Rhode Island
         Missouri                                                                      Tennessee                                                               Connecticut
        Romania                                                                            Austria                                                        Massachusetts
    Net herlands                                                                   Saskatchewan                                                                    Ontario
        Hungary                                                                             Lat via                                                     New Hampshire
      Minnesota                                                             Prince Edward Island                                                                    Maine
    Luxembourg                                                                 Western Australia                                                              Nova Sc otia
              Ohio                                                                     Maryland                                                          New Brunswick
         Victoria                                                                        Croatia                                                                  Quebec
 South Aust ralia                                                                         Hawaii                                                        Brit ish Columbia
       Germany                                                                          Michigan                                                                    Alaska
          Poland                                                                      Mississippi                                                        Newfoundland

 Source: Eurostat; Statistics Canada; USDA Census of Agriculture; ABS; Statistics NZ; Ministry for the Environment (NZ); CIA World Factbook; Coriolis analysis
                                                                                                                                                                                                          16
The amount of land in agriculture in New Zealand has been
trending down since the 80’s
 TOTAL NEW ZEALAND AREA IN FARMING AND PRIVATE FORESTRY
 Hectares; 1891-2018

                                                                                                                                                                                                                                                                        1994-2018
 20,000,000
                                                                                                                                                                                                                                                                        Discussed next page

 15,000,000

 10,000,000                                                                                                                                                                                                                                                                       In 2018 New
                                                                                                                                                                                                                                                                                 Zealand is now
                                                                                                                                                                                                                                                                                  back where it
                                                                                                                                                                                                                                                                                   was in 1898
   5,000,000

              -
                   1891
                          1894
                                 1897
                                        1900
                                               1903
                                                      1906
                                                             1909
                                                                    1912
                                                                           1915
                                                                                  1918
                                                                                         1921
                                                                                                1924
                                                                                                       1927
                                                                                                              1930
                                                                                                                     1933
                                                                                                                            1936
                                                                                                                                   1939
                                                                                                                                          1942
                                                                                                                                                 1945
                                                                                                                                                        1948
                                                                                                                                                               1951
                                                                                                                                                                      1954
                                                                                                                                                                             1957
                                                                                                                                                                                    1960
                                                                                                                                                                                           1963
                                                                                                                                                                                                  1966
                                                                                                                                                                                                         1969
                                                                                                                                                                                                                1972
                                                                                                                                                                                                                       1975
                                                                                                                                                                                                                              1978
                                                                                                                                                                                                                                     1981
                                                                                                                                                                                                                                            1984
                                                                                                                                                                                                                                                   1987
                                                                                                                                                                                                                                                          1990
                                                                                                                                                                                                                                                                 1993
                                                                                                                                                                                                                                                                        1996
                                                                                                                                                                                                                                                                               1999
                                                                                                                                                                                                                                                                                      2002
                                                                                                                                                                                                                                                                                             2005
                                                                                                                                                                                                                                                                                                    2008
                                                                                                                                                                                                                                                                                                           2011
                                                                                                                                                                                                                                                                                                                  2014
                                                                                                                                                                                                                                                                                                                         2017
Source: various editions of “A Statistical Account of the Seven Colonies of Australasia”; New Zealand Department of Statistics; Statistics New Zealand; Coriolis analysis
                                                                                                                                                                                                                                                                                                                           17
In the last 25 years alone, a large amount of land (-17%) has
left farming
 TOTAL AREA ON FARMS                                                     AREA LOST RELATIVE TO SOME USES
 Hectares; 1994-2018                                                     Hectares; lost 94-18 or 2018
                                                                                                          Current Area
         16,606,969
                                                                                      342,900
                                                    -17%                                          132,400
                                                            13,724,504                                        42,800     34,500      33,981

                                               -2,882,465                Lost 94-18   Arable      Arable VegetablesFruit & Nuts Wine
                                                                                      fodder       food                         Grapes

                                                                                                Since 1994 New Zealand has lost -2.88m
                                                                                                  hectares of land from farming, or five
                                                                                                 times as much area as is currently in all
                                                                                                            plant based foods
                                                                         -2,882,465

               1994                                 Lost      2018
Source: Statistics New Zealand; Coriolis analysis
                                                                                                                                              18
2. HIGHER PRODUCTIVITY
New Zealand is increasing output of existing land through
transitioning to higher productivity animal and plant systems
1                  2
       LAND IN         OUTPUT PER
    PRODUCTION     X    HECTARE
      (Hectares)         (T/ha)

                 ANIMAL         PLANT
                  BASED         BASED
               PRODUCTION    PRODUCTION

                                                                19
Can we increase productivity (more output from inputs)?; products
  vary dramatically in terms of value created per hectare
   REALISED NEW ZEALAND “FARMGATE” VALUE PER HECTARE OF TOTAL SPACE
   NZ$/hectare; 2017 or as available
                               Salmon                                                                                                                                                                $840,000
                               Oysters                    $80,000
                               Mussels             $26,400

                           Kiwifruit                     $79,400
                             Apples                 $46,786
                    Carrots, similar               $34,136
   Top               Onions, similar              $28,861
 25 by                       Lettuce              $26,196
                          Potatoes               $20,745
  area             Sweet potatoes                $20,475
 sorted                     Grapes               $19,522
                         Avocados               $17,211
    by              Broccoli, similar           $13,765
  value                    Currants            $11,950
                  Pumpkins, similar            $10,373
   per                         Dairy           $7,900
hectare                       Maize           $4,292
                       Peas, green            $2,998
                             Wheat            $2,949
                         Peas, dry            $2,485
                              Barley          $2,443
                                Oats          $2,401                                                                                                            Analysis uses total available area, not
                      Maize, green            $1,650
                             Linseed          $933
                                                                                                                                                            necessarily all of which is used at any one time
                                Deer          $919
                         Rapeseed             $882
                Cattle/Sheep meat             $649

  Note: excludes high productivity, but primarily indoor animals (pigs, chickens, milking sheep and milking goats); Source: UN FAO; UN FISHSTAT; Plant & Food Research Fresh Facts; Statistics NZ;
  DairyNZ; Beef&Lamb NZ; Zespri; NZKS; Coriolis analysis                                                                                                                                                   20
Only a small amount of New Zealand’s land is currently used at
   high productivity to create significant value per hectare
   NEW ZEALAND AGRICULTURAL LAND USE: AREA VS AG VALUE PER HECTARE
   NZ$; actual; hectares; 2017 or as available
            $79,400 (Kiwifruit)
                                                                                                                                                                                                     EXCLUDES
                                                                                                                                                                                                   AQUACULTURE
 Average
farmgate
value per
  hectare
    NZ$;
    2017

             $34,600 (Other Hort)

                                                                                                                Ag land
             $19,400 (Wine)
                                                                                                                average
                                                                                                               $2,200/ha
                         $7,900
                               $4,600
                                                    $2,700
                                                                                   $750                                                                                        $0
            Kiwifruit
            Other Hort
            Wine

                          Dairy

                                  Other livestock

                                                    Forestry                Sheep/Beef/Grain                                                                             Non-Agricultural

                                                                                    Proportional to total land area of New Zealand; sqkm; 2017

  Note: Other Hort here also includes nursery and floriculture unable to remove due to limitations of available data; Source: UN FAO database (populated by MPI); PFR Fresh Facts; Zespri Annual
  Report; NZW annual report; Ministry for the Environment; Statistics NZ; CIA World Factbook; Coriolis analysis
As a result, New Zealand currently produces an average of 11
     on-farm jobs per 1,000 hectares of agricultural land
     NEW ZEALAND AGRICULTURAL LAND AREA VS ON-FARM JOBS PER 1,000 HECTARES
     Headcount/1,000 ha of farmland; actual; hectares; 2017 or as available
                 366 (Kiwifruit)
                                                                                                                                                                                                       EXCLUDES
                                                                                                                                                                                                     AQUACULTURE
  Average
       jobs
   created        273 (Other Hort)
 per 1,000
   hectare;
Headcount;
     2018

                   126 (Wine)
                                                                                                                 New Zealand creates an average of 11
                                                                                                                   on-farm jobs per 1,000 hectare of
                                                                                                                            agricultural land

                                   28
                                                 16
                                                                                                                                             5
              Kiwifruit
              Other hort
              Wine

                                                Other Livestock

                            Dairy Cattle                                                                                  Sheep, Beef Cattle and Grain Farming

                                                                               Proportional to total agricultural area of New Zealand; hectares; 2017

    Note: Other Hort here also includes nursery and floriculture unable to remove due to limitations of available data; Source: UN FAO database (populated by MPI); PFR Fresh Facts; Zespri Annual
    Report; NZW annual report; Ministry for the Environment; Statistics NZ; CIA World Factbook; Coriolis analysis
At 11 jobs per hectare, New Zealand is performing like a desert
region, rather than a temperate climate foodbowl

     TEXAS                 NEW                  ALASKA
       8                 ZEALAND                  11
                            11

   IRELAND                  ITALY           NETHERLANDS
      22                      68                106

                                                                  23
350

                                                                                                                                                                                  300

                                                                                                                                                                                                  250

                                                                                                                                                                                                        200

                                                                                                                                                                                                              150

                                                                                                                                                                                                                    100

                                                                                                                                                                                                                                                                                                                                                 24
                                                                                                                                                                                                                          50

                                                                                                                                                                                                                               -

                                                                                                                                                                                                                                   Connecticut
                                                                                                                                                                                                                                   Massach usetts
                                                                                                                                                                                                                                   Rhode Island
There is a strong high level case that New Zealand can create

                                                                                                                                                                                                                                   Malta
                                                                                                                                                                                                                                   Newfoundland
                                                                                                                                                                                                                                   New Jersey
                                                                                                                                                                                                                                   Romania
                                                                                                                                                                                                                                   Slovenia
                                                                                                                                                                 Netherlands

                                                                                                                                                                                                                                   Bulgaria
                                                                                                                                                                                                                                   Cyprus
                                                                                                                                                                                                                                   New Hampshire
                                                                                                                                                                                                                                   Nova Scotia
                                                                                                                                                                 106

                                                                                                                                                                                                                                   Portugal
                                                                                                                                                                                                                                   Poland
                                                                                                                                                                                                                                   Netherlands
                                                                                                                                                                                                                                   Maine
                                                                                                                                                                                                                                   Greece
                                                                                                                                                                                                                                   British Columbia
                                                                                                                                                                                                                                   New Brunswick
                                                                                                                                                                                                                                   Italy
                                                                                                                                                                                                                                   Croatia
                                                                                                                                                                                 68
                                                                                                                                                                               Italy

                                                                                                                                                                                                                                   Pennsylv ania
                                                                                                                                                                                                                                   Vermont
                                                                                                                                                                                                                                                          Source: Eurostat; CIA World Fact Book; StatisticsNZ; USDA NASS; USDA Census of Agriculture; UN FAO AgStat; MPI; LCDB database; Coriolis analysis and estimates

                                                                                                                                                                                                                                   Austria
                                                                                                                                                                                                                                   Hungary
                                                                                                                                                                                                                                   Quebec
                                                                                                                                                                                                                                   West Virginia
                                                                                                                                                                                                                                   North C arolina
                                                                                                                                                                                                                                   Hawaii
                                                                                                                                                                                                                                   Florida
                                                                                                                                                                                                                                   Washington
                                                                                                                                                                                                                                   Belgium
                                                                                                                                                                                                                                   South Carolina
                                                                                                                                                                                                                                   Marylan d
                                                                ON-FARM JOBS PER 1,000 HECTARES: NZ VS. PEERS

                                                                                                                                                                                                                                   Ontario
                                                                                                                                                                                                                                   Czech ia
                                                                                                                                                                                        Germany

                                                                                                                                                                                                                                   Georgia
                                                                                                                                                                                                                                   Prince Edward Island
                                                                                                                                                                                                                                   Virgin ia
                                                                                                                                                                                                                                   Finland
                                                                                                                                                                                        34

                                                                                                                                                                                                                                   New York
                                                                                                                                                                                                                                   Germany
                                                                                                                                                                                                                                   Michigan
                                                                                                                                                                                                                                   Tennessee
                                                                                                          Headcount/1,000 ha of farmland; 2017 or as available

                                                                                                                                                                                                                                   Lithuania
                                                                                                                                                                                                                                   Delaware
                                                                                                                                                                                                                                   Spain
                                                                                                                                                                                                                                   Alabama
                                                                                                                                                                                                                                   California
                                                                                                                                                                                                                                   Kentucky
                                                                                                                                                                                         France

                                                                                                                                                                                                                                   Ohio
                                                                                                                                                                                                                                   Wisconsin
                                                                                                                                                                                         26

                                                                                                                                                                                                                                   Luxembourg
                                                                                                                                                                                                                                   France
                                                                                                                                                                                                                                   Latv ia
                                                                                                                                                                                                                                   Slovak ia
                                                                                                                                                                                          UK
                                                                                                                                                                                          23

                                                                                                                                                                                                                                   Denmark
                                                                                                                                                                                                                                   United Kingdom
                                                                                                                                                                                                                                   Ireland
                                                                                                                                                                                                                                   Sweden
                                                                                                                                                                                           Ireland
                                                                                                                                                                                                22
                                                                                                                                                                                                                                   Louisiana
                                                                                                                                                                                                                                   Mississippi
                                                                                                                                                                                                                                   Indiana
                                                                                                                                                                                                                                   Estonia
more on-farm jobs

                                                                                                                                                                                                                                   Arkan sas
                                                                                                                                                                                                                                   Missouri
                                                                                                                                                                                                                                   Minnesota
                                                                                                                                                                                                                                   Iowa
                                                                                                                                                                                                                                   Oregon
                                                                                                                                                                                                                                   Illinois
                                                                                                                                                                                                                                   Alaska
                                                                                                                                                                                                                                   New Zealand
                                                                                                                                                                                                                                   Oklahoma

                                                                                                                                                                                                New
                                                                                                                                                                                             Zealand
                                                                                                                                                                                                  11
                                                                                                                                                                                                                                   Manitoba
                                                                                                                                                                                                                                   Texas
                                                                                                                                                                                                                                   Idaho
                                                                                                                                                                                                                                   Alberta
                                                                                                                                                                                                                                   Kansas
                                                                                                                                                                                                                                   Colorado
                                                                                                                                                                                                                                   Nebraska
                                                                                                                                                                                                                                   Saskatchewan
                                                                                                                                                                                                                                   Utah
                                                                                                                                                                                                                                   South Dakota
                                                                                                                                                                                                                                   North D ak ota
                                                                                                                                                                                                                                   Arizona
                                                                                                                                                                                                                                   New Mexico
                                                                                                                                                                                                                                   Montana
                                                                                                                                                                                                                                   Wyoming
                                                                                                                                                                                                                                   Nevada
New Zealand is moving to higher productivity animal production
systems
1                   2
       LAND IN          OUTPUT PER
    PRODUCTION     X     HECTARE
      (Hectares)          (T/ha)

                  ANIMAL            PLANT
                   BASED            BASED
                PRODUCTION       PRODUCTION

    WANDERING      SUPPLEMENT                  AQUA-
                                     BARNS
     AROUND        ARY FEEDING                CULTURE

                                                                 25
Unlike other countries, New Zealand still uses most of its
agricultural land for “low density/extensive” animal systems
 SHARE OF AGRICULTURAL FARMLAND IN GRASSLAND/PASTURE: NZ VS. EU
 % of agricultural area; 2018 or as available
  100%
    90%
    80%
    70%
    60%
    50%
    40%
    30%
    20%
    10%
      0%
              Scottish Highlands
                                   New Zealand
                                                 Ireland
                                                           SW Scotland
                                                                         West Wales/Valleys
                                                                                              East Wales
                                                                                                           Northern Ireland
                                                                                                                              Devon
                                                                                                                                      Eastern Scotland
                                                                                                                                                         United Kingdom
                                                                                                                                                                          Slovenia
                                                                                                                                                                                     Portugal
                                                                                                                                                                                                Luxembourg
                                                                                                                                                                                                             NE Scotland
                                                                                                                                                                                                                           Austria
                                                                                                                                                                                                                                     Greece
                                                                                                                                                                                                                                              Netherlands
                                                                                                                                                                                                                                                            Croatia
                                                                                                                                                                                                                                                                      Belgium
                                                                                                                                                                                                                                                                                Romania
                                                                                                                                                                                                                                                                                          Latvia
                                                                                                                                                                                                                                                                                                   Spain
                                                                                                                                                                                                                                                                                                           France
                                                                                                                                                                                                                                                                                                                    Estonia
                                                                                                                                                                                                                                                                                                                              Germany
                                                                                                                                                                                                                                                                                                                                        Slovakia
                                                                                                                                                                                                                                                                                                                                                   Czechia
                                                                                                                                                                                                                                                                                                                                                             Lithuania
                                                                                                                                                                                                                                                                                                                                                                         Bulgaria
                                                                                                                                                                                                                                                                                                                                                                                    Italy
                                                                                                                                                                                                                                                                                                                                                                                             Poland
                                                                                                                                                                                                                                                                                                                                                                                                      Sweden
                                                                                                                                                                                                                                                                                                                                                                                                               Hungary
                                                                                                                                                                                                                                                                                                                                                                                                                         Denmark
                                                                                                                                                                                                                                                                                                                                                                                                                                   Cyprus
                                                                                                                                                                                                                                                                                                                                                                                                                                            Finland
                                                                                                                                                                                                                                                                                                                                                                                                                                                      Malta
                                                                                                                                                                                                                                                                                                   Grassland & Fodder Crops                                                    Grains, Vegetable, Fruit & Nuts

             Places that sent many                                                                                                                                                                                                                                                                                                                                                          Places that did not send many
             immigrants to New Zealand*                                                                                                                                                                                                                                                                                                                                                       immigrants to New Zealand

 *New Zealand agriculture follows the ‘idealised’ British Isles pastoralist world view; Source: Eurostat; CIA World Fact Book; StatisticsNZ; UN FAO AgStat; MPI; LCDB database; Coriolis analysis and
estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                26
Production of New Zealand’s “low density/extensive” animal
 systems is falling
  # OF SHEEP                                                # OF BEEF CATTLE     # OF DEER                                                                     FISH CAPTURE
  Head; m; 1984-2018                                        Head; m; 1974-2018   Head; m; 1999-2018                                                            Tonnes; 000; 1997-2017
 80                                                         7                    2.0                                                                         700.0

                                                                                 1.8
 70
                                                            6                                                                                                600.0

                                                                                 1.6
 60
                                                            5                                                                                                500.0
                                                                                 1.4

 50
                                                                                 1.2
                                                            4                                                                                                400.0

 40                                                                              1.0

                                                            3                                                                                                300.0
                                                                                 0.8
 30

                                                                                 0.6
                                                            2                                                                                                200.0
 20
                                                                                 0.4

                                                            1                                                                                                100.0
 10
                                                                                 0.2

  -                                                         -                     -                                                                             -
      1984
      1987
      1990
      1993
      1996
      1999
      2002
      2005
      2008
      2011
      2014
      2017

                                                                1974
                                                                1977
                                                                1980
                                                                1983
                                                                1986
                                                                1989
                                                                1992
                                                                1995
                                                                1998
                                                                2001
                                                                2004
                                                                2007
                                                                2010
                                                                2013
                                                                2016

                                                                                       1999
                                                                                              2001
                                                                                                     2003
                                                                                                            2005
                                                                                                                   2007
                                                                                                                          2009
                                                                                                                                 2011
                                                                                                                                        2013
                                                                                                                                               2015
                                                                                                                                                      2017

                                                                                                                                                                     1997
                                                                                                                                                                     1999
                                                                                                                                                                     2001
                                                                                                                                                                     2003
                                                                                                                                                                     2005
                                                                                                                                                                     2007
                                                                                                                                                                     2009
                                                                                                                                                                     2011
                                                                                                                                                                     2013
                                                                                                                                                                     2015
                                                                                                                                                                     2017
Source: Statistics NZ; UN FAO FishStat; Coriolis analysis
                                                                                                                                                                                  27
New Zealand “low density/extensive” animals are low yield
relative to other developed countries and regions
 MILK PER COW PER YEAR                                                                                                                                                                               MEAT PER CATTLE ANIMAL KILLED
 Litres; 2018 or as available                                                                                                                                                                        KG; 2018 or as available
 14,000                                                                                                                                                                                              4,000

 12,000                                                                                                                                                                                              3,500
                               3x
 10,000                                                                                                                                                                                              3,000
                                                                                                                                                                                                             2x
  8,000                                                                                                                                                                                              2,500

  6,000
                                                                                                                                                                                                     2,000

  4,000
                                                                                                                                                                                                     1,500

  2,000
                                                                                                                                                                                                     1,000

       -
                                                                                                                                                                                                      500
              Brazil
                       Chile
                               Uruguay
                                         New Zealand
                                                       Ireland
                                                                 Tasmania

                                                                            Germany
                                                                                      UK
                                                                                           Netherlands
                                                                                                         Canada
                                                                                                                  Denmark
                                                                                                                            Nevada
                                                                                                                                     California
                                                                                                                                                  Arizona
                                                                                                                                                            Idaho
                                                                                                                                                                    New Mexico
                                                                                                                                                                                 Colorado
                                                                                                                                                                                            Israel

                                                                                                                                                                                                        -    Albania
                                                                                                                                                                                                             Romania
                                                                                                                                                                                                             Bulgaria
                                                                                                                                                                                                             New Zealand
                                                                                                                                                                                                             Ukraine
                                                                                                                                                                                                             Montenegro
                                                                                                                                                                                                             Net herlands
                                                                                                                                                                                                             Serbia
                                                                                                                                                                                                             Greece
                                                                                                                                                                                                             Croatia
                                                                                                                                                                                                             Switzerland
                                                                                                                                                                                                             Canada
                                                                                                                                                                                                             Portugal
                                                                                                                                                                                                             Hungary
                                                                                                                                                                                                             Slovakia
                                                                                                                                                                                                             Denmark
                                                                                                                                                                                                             Spain
                                                                                                                                                                                                             Australia
                                                                                                                                                                                                             Norway
                                                                                                                                                                                                             Italy
                                                                                                                                                                                                             Czechia
                                                                                                                                                                                                             Poland
                                                                                                                                                                                                             Belgium
                                                                                                                                                                                                             Finland
                                                                                                                                                                                                             France
                                                                                                                                                                                                             Germany
                                                                                                                                                                                                             Sweden
                                                                                                                                                                                                             United Kingdom
                                                                                                                                                                                                             Ireland
                                                                                                                                                                                                             Austria
                                                                                                                                                                                                             USA
              Wandering Around                                                                                              Barn

Source: StatisticsNZ; UN FAO AgStat; Coriolis analysis
                                                                                                                                                                                                                                     28
Average $5.03

                                                                                                                                                                                                                     India

                                                                                                                                                                                                           $3.04
                                                                                                                                                                                                                                                                                                                                     29
New Zealand’s “low density/extensive” animal products often sell

                                                                                                                                                                                                                     Brazil

                                                                                                                                                                                 $4.03
                                                                   GLOBAL BEEF TRADE: VOL VS. VAL

                                                                                                                                                                               $4.22                                 Paraguay
                                                                                                                                                                                                                     Other

                                                                                                                                                                              $4.34
                                                                                                                                                                             $4.43                                   Poland
                                                                                                                                                              $4.72                                                  France
                                                                                                                                                             $4.78                                                   Spain
                                                                                                                                                            $4.92                                                    New Zealand
                                                                                                                                                                                                                                      Proportional to 2018 global export volume; US$ / kg FOB

                                                                                                                                                          $4.99                                                      Uruguay
                                                                                                 Export tonnes; US$/t; 2018

                                                                                                                                                       $5.15                                                         Italy
                                                                                                                                                      $5.28                                                          Argentina
                                                                                                                                                    $5.44                                                            Canada
                                                                                                                                                    $5.49                                                            Germany
                                                                                                                                                   $5.59                                                             Belgium
at a discount, not a premium to world prices

                                                                                                                                                  $5.67                                                              Australia
                                                                                                                                                  $5.70                                                              Mexico
                                                                                                                                         $6.24                                                                       United Kingdom
                                                                                                                                         $6.27                                                                       Ireland
                                                                                                                                      $6.53                                                                          Netherlands
                                                                                                                                                                                                                     USA
                                                                                                                              $7.18
                                                                                                                                                                                          Average $4.66

                                                                                                                                                                                                                     Poland
                                                                                                                                                                                                             $3.57

                                                                                                                                                                                                                     Germany
                                                                                                                                                                                                            $3.75
                                                                   GLOBAL CHEESE TRADE: VOL VS. VAL

                                                                                                                                                                                                           $3.84     Belarus
                                                                                                                                                                                                          $4.01      Saudi Arabia
                                                                                                                                                                                                      $4.08          New Zealand
                                                                                                                                                                                                 $4.20               USA
                                                                                                                                                                                                $4.21                Belgium
                                                                                                                                                                                           $4.29                     Ireland

                                                                                                                                                                                                                                                                                                Source: UN Comtrade database; Coriolis classifications and analysis
                                                                                                                                                                                          $4.39                      Egypt

                                                                                                                                                                                                                                      Proportional to 2018 global export volume; US$ / kg FOB
                                                                                                                                                                                         $4.44                       Other
                                                                                                 Export tonnes; US$/t; 2016
                                                                                                                                                                                         $4.53                       Denmark
                                                                                                                                                                                        $4.65                        Netherlands
                                                                                                                                                                                       $4.66                         Australia
                                                                                                                                                                                       $4.74                         United Kingdom
                                                                                                                                                                                      $4.88                          Austria
                                                                                                                                                                               $5.32                                 France
                                                                                                                                                                             $5.53                                   Spain
                                                                                                                                                          $6.43                                                      Greece
                                                                                                                                          $7.80                                                                      Italy
                                                                                                                     $9.31                                                                                           Switzerland
Being a stable, picturesque country with functioning environmental
regulation in the temperate zone (Clean & Green) is not a “moat”

                                                      NETHER
 BAVARIA           IRELAND        WISCONSIN           LANDS

  SWITZER
   LAND          DENMARK            FRANCE             ITALY

TASMANIA          BRITISH
                 COLUMBIA          OREGON             WALES

                                                                 30
New Zealand is increasing supplementary feeding, through both
(1) feed grain production and (2) animal feed imports
 AREA IN FODDER GRAINS                                                                                                IMPORTS OF ANIMAL FEEDS/PKE*/ETC.
 Hectares; 2002 vs. 2016                                                                                              Tonnes; 000; 1996-2018
                                                                                                                     4,000
         Apparent area of all non-
         market cash crops                                                                                                      Grains   Animal feeds
                                                                                                                     3,500

                                                                                                                     3,000

                                                                                                                     2,500

                                                                                                                     2,000

                                                                          291,745
                                                                                                                     1,500

                                                                                                                     1,000

                                                                                                                       500

                      46,330
                                                                                                                          -
                                                                                                                                1996
                                                                                                                                1997
                                                                                                                                1998
                                                                                                                                1999
                                                                                                                                2000
                                                                                                                                2001
                                                                                                                                2002
                                                                                                                                2003
                                                                                                                                2004
                                                                                                                                2005
                                                                                                                                2006
                                                                                                                                2007
                                                                                                                                2008
                                                                                                                                2009
                                                                                                                                2010
                                                                                                                                2011
                                                                                                                                2012
                                                                                                                                2013
                                                                                                                                2014
                                                                                                                                2015
                                                                                                                                2016
                                                                                                                                2017
                                                                                                                                2018
                       2002                                                 2016

*PKE = Palm Kernel Expeller; Source: StatisticsNZ; UN Comtrade database; LCDB database; Coriolis classifications and analysis
                                                                                                                                                          31
New Zealand production of barn raised animal protein is growing

 POULTRY MEAT                                                                EGGS                                                                                     MILKING SHEEP/GOATS*
 Tonnes; 000; 1961-2017                                                      Tonnes; 000; 1994-2017                                                                   Headcount; 1995-2016
 250                                                                        60                                                                                        100,000
                                                                                                                                                                                        Goat            Sheep
                                                                                                                                                                       90,000
                                                                            50
 200                                                                                                                                                                   80,000

                                                                                                                                                                       70,000
                                                                            40
 150                                                                                                                                                                   60,000

                                                                            30                                                                                         50,000

 100                                                                                                                                                                   40,000
                                                                            20
                                                                                                                                                                       30,000

  50                                                                                                                                                                   20,000
                                                                            10

                                                                                                                                                                       10,000

   -                                                                        -                                                                                              -
        1961
        1965
        1969
        1973
        1977
        1981
        1985
        1989
        1993
        1997
        2001
        2005
        2009
        2013
        2017

                                                                                  1994
                                                                                         1996
                                                                                                1998
                                                                                                       2000
                                                                                                              2002
                                                                                                                     2004
                                                                                                                            2006
                                                                                                                                   2008
                                                                                                                                          2010
                                                                                                                                                 2012
                                                                                                                                                        2014
                                                                                                                                                               2016

                                                                                                                                                                                1995
                                                                                                                                                                                       1997
                                                                                                                                                                                              1999
                                                                                                                                                                                                     2001
                                                                                                                                                                                                            2003
                                                                                                                                                                                                                   2005
                                                                                                                                                                                                                          2007
                                                                                                                                                                                                                                 2009
                                                                                                                                                                                                                                        2011
                                                                                                                                                                                                                                               2013
                                                                                                                                                                                                                                                      2015
*Mix of barn and grazing; Source: Statistics NZ; UN FAO AgStat; Coriolis analysis and estimates
                                                                                                                                                                                                                                                             32
Poultry meat has been a long term growth platform for NZ; a
 simple model suggests production will exceed lamb by 2028
  NEW ZEALAND MEAT PRODUCTION VOLUME: LAMB VS POULTRY
  T; 000; 1985-2017; 2017-2030f

Sheep meat                                                Simple
                                                                          700
                                                          extrapolation

                                                                          600

                                                                          500

                                                                          400

                                                                          300

                                                                          200

                                                                          100
Poultry meat
                                                                          0
                      1985
                      1986
                      1987
                      1988
                      1989
                      1990
                      1991
                      1992
                      1993
                      1994
                      1995
                      1996
                      1997
                      1998
                      1999
                      2000
                      2001
                      2002
                      2003
                      2004
                      2005
                      2006
                      2007
                      2008
                      2009
                      2010
                      2011
                      2012
                      2013
                      2014
                      2015
                      2016
                      2017
                      2018
                      2019
                      2020
                      2021
                      2022
                      2023
                      2024
                      2025
                      2026
                      2027
                      2028
                      2029
                      2030
 Source: UN FAO AgStat; Coriolis analysis and modelling
                                                                              33
New Zealand aquaculture production was growing until it was
stalled by “non-market action”
 AVAILABLE AREA VS. AQUACULTURE                                                                           TONNES AQUACULTURE
 km2;      2018                                                                                           T; 000; 1980-2018   Stalled
                                                                                                          120
        4,083,744

                                                                                                          100

                                                                                                           80

                                                                                                           60
                                                                                                                                        Mussels

                                                                     Aquaculture currently
                                                                                                           40
                                                                     uses 0.001% of New
                                                                     Zealand’s water space
                                                                                                           20
                                     464,537
                                                                                                                                        Salmon
                                                                    4,301                            57    -                            Oysters
                                                                                                                1980
                                                                                                                1982
                                                                                                                1984
                                                                                                                1986
                                                                                                                1988
                                                                                                                1990
                                                                                                                1992
                                                                                                                1994
                                                                                                                1996
                                                                                                                1998
                                                                                                                2000
                                                                                                                2002
                                                                                                                2004
                                                                                                                2006
                                                                                                                2008
                                                                                                                2010
                                                                                                                2012
                                                                                                                2014
                                                                                                                2016
        Sea Area                    Land area                 Inland water                 Aquaculture

Source: UN FishStat; Statistics NZ; MPI/MAF/MoF; industry sources; Coriolis analysis and estimates
                                                                                                                                                  34
New Zealand has clear potential to produce more aquaculture

        MATRIX: TONNES/KILOMETRE VS DOLLARS/KILOMETRE VS TOTAL INDUSTRY VALUE
        T/km (actual); US$/km (actual); total US$m; 2018 or as available

                  $350,000
    US$ per                                                                                                                                Norway
kilometre of
   coastline;     $300,000
 2018 or as
   available                                                                                                                               France                            Netherlands
                  $250,000

                  $200,000                                                                                                                                                     Poland
                                                                                                                                           Romania

                  $150,000                                                                     Ireland          Turkey
                                                                                                              Lithuania                           Spain
                                                                                  UK
                                                                                                                   Slovenia
                  $100,000
                                                        Cyprus                                                 Bulgaria
                                                 NZ              Finland               Italy
                                                                                                                                   Size of bubble is proportional to total    $1,000
                   $50,000         Portugal                           Germany                                                          value; a bubble this size is US$1b
                                                           Greece
                                       Sweden
                Belgium Croatia         Denmark
                         $0     Estonia
                   Iceland 0    Latvia       10                                  20                      30           40      50                  60                          70           140

                                    Tonnes of aquaculture produced per kilometre of coastline; t/km; 2018 or as available

      Source: UN FAO FishStat; Eurostat; MPI; CIA World Fact Book; Coriolis analysis
                                                                                                                                                                                            35
New Zealand is increasing production higher productivity plant
production systems
1                    2
       LAND IN           OUTPUT PER
    PRODUCTION       X    HECTARE
      (Hectares)           (T/ha)

                 ANIMAL           PLANT
                  BASED           BASED
               PRODUCTION      PRODUCTION

                         MECHANICALLY
            ARABLE                        TREE CROPS     PROTECTED
                          HARVESTED
            CROPS                       (FRUIT & NUTS)   CROPPING
                          VEGETABLES

                                                                     36
Most New Zealand farm land is currently used to to graze
animals; only 2.2% of all land is used for plant based foods
 NEW ZEALAND AGRICULTURAL LAND USE
 Area; % of area; 2017

                                                                                             Kiwifruit Wine
                                                                     Other Hort              0.05% 0.14%            Arable crops
                                                                      0.32%                                                                                   Plant based foods
                                                                                                                       1.69%
                                                                                                                                                                     2.2%

                                                                                                                                                            Grazing animals                44% of
                                                                                                                             Sheep/Beef
                                                                                                                                36%                         41% of all land                all land
                                                                        Non-Agricultural
                                                                             49%                                                                            97% of ag (x forestry)

                                                                                                                        Dairy
                                                                                                         Forestry        5%
                                                                                                           7%
                                                                                                                        Other livestock
                                                                                                                             1%
                                                                                            TOTAL = 264,537 sqkm

Source: UN FAO database (populated by MPI); PFR Fresh Facts; Zespri Annual Report; NZW annual report; Ministry for the Environment; Statistics NZ; CIA World Factbook; Coriolis analysis
                                                                                                                                                                                                      37
38

                                                                                                                                                                                                                                                       Comor os
                                                                                                                                                                                                                                                       Tu val u
                                                                                                                                                                                                                                                       Banglades h
                                                                                                                                                                                                                                                       Mol dova
New Zealand currently performs like a desert country in share of

                                                                                                                                                                                                                                                       Denmar k
                                                                                                                                                                                                                                                       Ukrai ne
                                                                                                                                                                                                                                                       Rwanda
                                                                                                                                                                                                                                                       In dia
                                                                                                                                                                                                                                                       Mar s ha l Is la nd s
                                                                                                                                                                                                                                                       Bur undi
                                                                                                                                                                                                                                                       Mi cr ones ia
                                                                                                                                                                                                                                                       Kir ibat i
                                                                                                                                                                                                                                                       Hungary
                                                                                                                                                                                                                                                       Gaza Str ip
                                                                                                                                                                                                                                                       SãoTomé and Prí nci pe
                                                                                                                                                                                                                                                       Tog o
                                                                                                                                                                                                                                                       Hait i
                                                                                                                                                                                                                                                       Uganda
                                                                                                                                                                                                                                                       Niger i a
                                                                                                                                                                                                                                                       El Sa lv ador
                                                                                                                                                                                                                                                       Mal div es
                                                                                                                                                                                                                                                       Wall is and Futu na
                                                                                                                                                                                                                                                       Czech Republi c
                                                                                                                                                                                                                                                       Gam bia
land in plant based foods (grains, vegetables, fruit & nuts)

                                                                                                                                                                                                                                                       Serbi a
                                                                                                                                                                                                                                                       Romania
                                                                                                                                                                                                                                                       Maur it iu s
                                                                                                                                                                                                                                                       Mal awi
                                                                                                                                                                                                                                                       Th ai land
                                                                                                                                                                                France

                                                                                                                                                                                                                                                       Barba dos
                                                                                                                                                                                                                                                       Poland
                                                                                                                                                                                                                                                       Tonga
                                                                   SHARE OF TOTAL COUNTRY AREA IN GRAINS, VEGETABLES, FRUIT & NUTS

                                                                                                                                                                                                                                                       Cuba
                                                                                                                                                                                                                                                       Sri L anka
                                                                                                                                                                                                                                                       Phi li ppin es
                                                                                                                                                                                                                                                       Sain t Vi ncent and th e Gr enadi nes
                                                                                                                                                                                                                                                       Li th uania
                                                                                                                                                                                                                                                       Gr enada
                                                                                                                                                                                                                                                       Fr anc e
                                                                                                                                                                                                                                                       Ger many
                                                                                                                                                                                                                                                       Mal ta
                                                                                                                                                                                                                                                       Spain
                                                                                                                                                                                                                                                       Tu ni si a
                                                                                                                                                                                                                                                       Viet nam
                                                                                                                                                                                                                                                       Ghana
                                                                                                                                                                                                                                                       Domi ni c a
                                                                                                                                                                                                                                                       Bul gar ia
                                                                                                                                                                                                                                                       It aly
                                                                                                                                                                                                                                                       Syri a
                                                                                                                                                                                                                                                       Neth er la nds
                                                                                                                                                                                Italy

                                                                                                                                                                                                                                                       Tu r key
                                                                                                                                                                                                                                                       Slovakia
                                                                                                                                                                                                                                                       Sain t L uci a
                                                                                                                                                                                                                                                       Pakis tan
                                                                                                                                                                                                                                                       Gr eec e
                                                                                                                                                                                                                                                       Belgi um
                                                                                                                                                                                                                                                       Belar us
                                                                                                                                                                                                                                                       Niu e
                                                                                                                                                                                                                                                       Domi ni c an Republ ic
                                                                                                                                                                                                                                                       Bri ti sh Vir gi n Is l ands
                                                                                                                                                                                                                                                       Beni n
                                                                                                                                                                                                                                                       Sier ra L eone
                                                                                                                                                                                                                                                       Azerba ijan
                                                                                                                                                                                                                                                       Albani a
                                                                                                                                                                                                                                                       Unit edKi ngdom
                                                                                                                                                                                                                                                       In dones ia
                                                                                                                                                                                                                                                       Li ec ht enst ein
                                                                                                                                                                                         UK

                                                                                                                                                                                                                                                       Cook I sl ands
                                                                                                                                                                                                                                                       Amer ic an Samoa
                                                                                                                                                                                                                                                       Lu xem bourg
                                                                                                                                                                                                                                                       Leba non
                                                                                                                                                                                                                                                       Tr i ni dad andTobag o
                                                                                                                                                                                                                                                       Cambodi a
                                                                                                                                                                                                                                                       Cote d'I voir e
                                                                                                                                                                                                                                                       Guat emala
                                                                                                                                                                                                                                                       Anti guaand Bar buda
                                                                                                                                                                                                                                                       Mal aysi a
                                                                                                                                                                                                                                                       Sain t Ki t s and Nevis
                                                                                                                                                                                                                                                       Guam
                                                                                                                                                                                                                                                       Bosn i aand Her zegovin a
                                                                                                                                                                                                                                                       Nor th Korea
                                                                                                                                                                                                                                                       Bur kin a Fas o
                                                                                                                                                                                                                                                       Mor oc co
                                                                                                                                                                                                                                                       Jam aic a
                                                                                                                                                                                                                                                       Berm ud a
                                                                                                                                                                                                                                                       Mont ser r at
                                                                                                                                                                                                                                                       Port ugal
                                                                                                                                                                                                                                                       Lat via
                                                                                                                                                                                                                                                       Bur ma
                                                                                                                                                                                                                                                       Pales ti ne[3]
                                                                                                                                                                                                                                                       Mac edonia
                                                                                                                                                                                                                                                       Seneg al
                                                                                                                                                                                                                                                       Arm enia
                                                                                                                                                                                                                                                       Croa ti a
                                                                                                                                                                                                                                                       Sout h Kor ea
                                                                                                                                                                                                                                                       Is rael
                                                                                                                                                                                                                                                       Nor th er n M ari anaI s lands
                                                                                                                                                                                                                                                       Aust r ia
                                                                                                                                                                                                                                                       Unit edSt ates
                                                                                                                                                                                                                                                       San M ari no
                                                                                                                                                                                                                                                       Ta nz ani a
                                                                                                                                                                                                                                                       Camer oon
                                                                                                                                                                                                                                                       Et hiopi a
                                                                                                                                                                                                                                                          Nepal
                                                                                                                                                                                                                                                       Sud an
                                                                                                                                                                                                                                                       Ir eland
                                                                                                                                                                                                                                                       Seych el les
                                                                                                                                                                                                                                                       Guin ea- Bis s au
                                                                                                                                                                                               Ireland

                                                                                                                                                                                                                                                       Es t onia
                                                                                                                                                                                                                                                       Nic ar agua
                                                                                                                                                                                                                                                       Ti mor - Les t e
                                                                                                                                                                                                                                                       Guin ea
                                                                                                                                                                                                                                                       Arg ent in a
                                                                                                                                                                                                                                                       Mont enegr o
                                                                                                                                                                                                                                                       Fi ji
                                                                                                                                                                                                                                                       Mexi co
                                                                                                                                                                                                                                                       Honduras
                                                                                                                                                                                                                                                       Palau
                                                                                                                                                                                                                                                       Cypr us
                                                                                                                                                                                                                                                       Chin a
                                                                                                                                                                                                                                                       Sain t Pi err eand M iquelon
                                                                                                                                                                                                                                                       Jap an
                                                                                                                                                                                                                                                       Niger
                                                                                                                                                                                                                                                       Cape Verd e
                                                                                                                                                                                                    Japan

                                                                                                                                                                                                                                                       Puer t oRi co
                                                                                                                                                                                                                                                       Afg ha ni st an
                                                                                                                                                                                                                                                       Ir an
                                                                                                                              % of total area; N=Earth; 2015 or as available

                                                                                                                                                                                                                                                       Vanuatu
                                                                                                                                                                                                                                                       Cost a Ric a
                                                                                                                                                                                                                                                       Parag ua y
                                                                                                                                                                                                                                                       Uzbekis tan
                                                                                                                                                                                                                                                       Swi tz er la nd
                                                                                                                                                                                                                                                       Kenya
                                                                                                                                                                                                                                                       Swazil and
                                                                                                                                                                                                                                                       Samoa
                                                                                                                                                                                                                                                       Aru ba
                                                                                                                                                                                                                                                       Uru guay
                                                                                                                                                                                                                                                       Ec uador
                                                                                                                                                                                                                                                       Les ot ho
                                                                                                                                                                                                                                                       Sout h A fr ic a
                                                                                                                                                                                                                                                       Neth er la nds Anti l es
                                                                                                                                                                                                                                                       Panama
                                                                                                                                                                                                                                                       Slovenia
                                                                                                                                                                                                                                                       Brazi l
                                                                                                                                                                                                                                                       Is le of Ma n
                                                                                                                                                                                                                                                       Kazakhs t an
                                                                                                                                                                                                                                                       Ir aq
                                                                                                                                                                                                                                                       U.S. Vi r gin I s lands
                                                                                                                                                                                                                                                       Bahrai n
                                                                                                                                                                                                                                                       Geor gia
                                                                                                                                                                                                                                                       Fi nland
                                                                                                                                                                                                                                                       Rus s ia
                                                                                                                                                                                                                                                       Li ber ia
                                                                                                                                                                                                                                                       Kyrgyzs t an
                                                                                                                                                                                                                                                       Ta jik i st an
                                                                                                                                                                                                                                                       Madag asc ar
                                                                                                                                                                                                                                                       Fr enc h Pol ynes i a
                                                                                                                                                                                                                                                       Laos
                                                                                                                                                                                                                                                       Er i tr ea
                                                                                                                                                                                                                                                       Mozamb ique
                                                                                                                                                                                                                                                       Sweden
                                                                                                                                                                                                                                                       Aust r alia

                                                                                                                                                                                                                                                                                                Source: UN FAO AgStat; CIA World Factbook; Coriolis analysis
                                                                                                                                                                                                                                                       Mal i
                                                                                                                                                                                                                                                       Eq ua tor ial G uin ea
                                                                                                                                                                                                                                                       Canada
                                                                                                                                                                                                                                                       Zambi a
                                                                                                                                                                                                                                                       Beliz e
                                                                                                                                                                                                                                                       Tu r kmenis t an
                                                                                                                                                                                                                                                       Peru
                                                                                                                                                                                                                                                       Angola
                                                                                                                                                                                                                                                       Chad
                                                                                                                                                                                                                                                       Venezuel a
                                                                                                                                                                                                                                                       Cayman Is lands

                                                                                                                                                                                                                                        Yemen
                                                                                                                                                                                                                                                       Boliv i a
                                                                                                                                                                                                                                                       Eg ypt
                                                                                                                                                                                                                                                       Solomon Is lands
                                                                                                                                                                                                                                                       Alger ia
                                                                                                                                                                                                                                                       Centr al Af ri c an Republ ic
                                                                                                                                                                                                                                                       Jor dan
                                                                                                                                                                                                                                                       Colom bia

                                                                                                                                                                                                              Zealand
                                                                                                                                                                                                                                                       Bru nei
                                                                                                                                                                                                                                                       Sin gapor e
                                                                                                                                                                                                                                                       Bhu t an
                                                                                                                                                                                                                                                       Yemen
                                                                                                                                                                                                                                                       Tu r ks and Caic os I s lands

                                                                                                                                                                                                              New
                                                                                                                                                                                                                                                       Chil e
                                                                                                                                                                                                                                                       Nor way
                                                                                                                                                                                                                                                       Guyana
                                                                                                                                                                                                                                                       PapuaN ew Guin ea
                                                                                                                                                                                                                                                       Fa roe Is lands
                                                                                                                                                                                                                                                       Andorr a
                                                                                                                                                                                                                                                       New Zealand
                                                                                                                                                                                                                                                       Somali a
                                                                                                                                                                                                                                                       Republi c of t he Congo
                                                                                                                                                                                                                                                       Democ r ati c Republi c of t heC ong o
                                                                                                                                                                                                                                                       Gabon
                                                                                                                                                                                                                                                       Saudi Ar abia
                                                                                                                                                                                                                                                       Qat ar
                                                                                                                                                                                                                                                       Li bya

                                                                                                                                                                                                                                        Arabia
                                                                                                                                                                                                                                         Saudi
                                                                                                                                                                                                                                                       Nami bia
                                                                                                                                                                                                                                                       Unit edAr ab Emi rat es
                                                                                                                                                                                                                                                       Kuwait
                                                                                                                                                                                                                                                       Bahamas
                                                                                                                                                                                                                                                       Bots wana
                                                                                                                                                                                                                                                       New Cal edonia
                                                                                                                                                                                                                                                       Sur i na me
                                                                                                                                                                                                                                                       Maur it ania
                                                                                                                                                                                                                                                       Mongol ia
                                                                                                                                                                                                                                                       Oma n
                                                                                                                                                                                                                                                       Ic eland
                                                                                                                                                                                                                                                       Dji bouti
                                                                                                                                                                                                                                                       West ern Sahar a
                                                                                                                                                                                                                                                       Vat ic an Cit y
                                                                                                                                                                                                                                                       Monac o

                                                                                                                                                                                                                                                      0%
                                                                                                                                                                               90%

                                                                                                                                                                                         80%

                                                                                                                                                                                               70%

                                                                                                                                                                                                            60%

                                                                                                                                                                                                                    50%

                                                                                                                                                                                                                          40%

                                                                                                                                                                                                                                30%

                                                                                                                                                                                                                                      20%

                                                                                                                                                                                                                                                10%
New Zealand currently uses an almost negligible amount of total
land in arable crops
 SHARE OF TOTAL COUNTRY AREA IN ARABLE GRAINS & PULSES**
 % of area; ha; 2018 or as available
80%

70%

60%

50%

40%

30%

20%

10%

  0%
            NZ
                   Wales
                           N. Ireland
                                        Ireland
                                                  Scotland
                                                             Netherlands
                                                                           Norway
                                                                                    Luxembourg
                                                                                                 Slovenia
                                                                                                            Belgium
                                                                                                                      Cyprus
                                                                                                                               Greece
                                                                                                                                        Sweden
                                                                                                                                                 Italy
                                                                                                                                                         Latvia
                                                                                                                                                                  Austria
                                                                                                                                                                            England
                                                                                                                                                                                      Spain
                                                                                                                                                                                              France
                                                                                                                                                                                                       Estonia
                                                                                                                                                                                                                 Croatia
                                                                                                                                                                                                                           Germany
                                                                                                                                                                                                                                     Lithuania
                                                                                                                                                                                                                                                 Slovakia
                                                                                                                                                                                                                                                            Finland
                                                                                                                                                                                                                                                                      Czech Republic
                                                                                                                                                                                                                                                                                       Romania
                                                                                                                                                                                                                                                                                                 Denmark
                                                                                                                                                                                                                                                                                                           Poland
                                                                                                                                                                                                                                                                                                                    Bulgaria
                                                                                                                                                                                                                                                                                                                               Hungary
                   Major contributors to
                    early NZ colonists*

*New Zealand agriculture appears to be overweighed to the ‘idealised’ British Isles pastoralist world view; ** excludes fodder crops; Source: Eurostat; CIA World Fact Book; StatisticsNZ; UN FAO
AgStat; MPI; LCDB database; Coriolis analysis and estimates                                                                                                                                                                                                                                                                              39
New Zealand is moving to more crop farms with more area per
farm and more overall area in arable crops
 CROP FARM UNITS                                                             AVERAGE AREA/UNIT                                                           TOTAL AREA IN CROPS**
 #; 02vs18                                                                   m2;     02vs17/18*                                                          m2; 02vs17

                                                                                                                                                                              448,777
                                            3,219                                                                       139

             2,472

                                                                                          90

                                                                                                                                                                    222,791

            2002                           2018                                        2002                           2018                                          2002      2017
*Uses 2017 area over 2018 units (no 2018 area available); ** Includes fodder; Source: Statistics NZ; UN FAO; MAF/MPI; Ministry for the Environment; Coriolis analysis
                                                                                                                                                                                        40
New Zealand can produce more mechanically harvestable
vegetables                               HOW MUCH ADDITIONAL
                                                                                                                                                        LAND WOULD COME ONLINE
 AREA IN MHV*                                                                % OF TOTAL AREA                                                            IF NZ MATCHED THIS PEER?
 Hectares; 2017                                                              % of country; km2; 2017                                                    Model; New NZ ha in MHV; 2020+
    Net herlands                             216,108                           Net herlands                                        5.8%                   Net herlands                                             1,541,734
         Belgium                  112,603                                           Belgium                             3.7%                                   Belgium                                   974,595
          Poland                                              418,853                Poland               1.3%                                                  Poland                         339,273
       Denmark              55,412                                                Denmark                 1.3%                                               Denmark                           324,750
       Romania                                    274,889                         Romania                1.2%                                                Romania                          288,849
      Germany                                       300,568                      Germany               0.8%                                                 Germany                          204,614
United Kingdom                              200,113                        United Kingdom              0.8%                                           United Kingdom                         199,797
           Serbia         55,051                                                      Serbia         0.6%                                                        Serbia                     145,480
        Albania        17,875                                                      Albania           0.6%                                                     Albania                       145,145
       Portugal          43,075                                                   Portugal          0.5%                                                     Portugal                      103,484
    Switzerland        17,519                                                  Switzerland          0.4%                                                  Switzerland                      91,747
              Italy             124,614                                                  Italy      0.4%                                                            Italy                  88,821
            Lat via     26,674                                                         Lat via      0.4%                                                          Lat via                  88,723
       Lithuania        25,681                                                    Lithuania         0.4%                                                     Lithuania                    83,341
           France                             233,772                                 France        0.4%                                                         France                   76,885
          Austria       30,660                                                       Austria        0.4%                                                        Austria                   75,845
            Spain                     164,739                                          Spain       0.3%                                                           Spain                   65,031
       Slovenia       5,871                                                       Slovenia         0.3%                                                      Slovenia                     55,299
       Hungary          24,729                                                    Hungary          0.3%                                                      Hungary                      48,869
    Luxembourg        663                                                      Luxembourg          0.3%                                                   Luxembourg                     46,315
         Croatia       13,585                                                       Croatia       0.2%                                                         Croatia                   41,897
         Greece          30,359                                                     Greece        0.2%                                                         Greece                    39,199
       Slovakia        9,420                                                      Slovakia        0.2%                                                       Slovakia                    28,932
       Bulgaria         20,012                                                    Bulgaria        0.2%                                                       Bulgaria                    25,788
          Ireland      12,338                                                        Ireland      0.2%                                                          Ireland                  24,460
          Estonia     6,557                                                          Estonia      0.1%                                                          Estonia                 16,185
    Montenegro        1,998                                                    Montenegro         0.1%                                                    Montenegro                    16,098
  New Zealand           23,027                                               New Zealand         0.1%                                                   New Zealand                     -
         Finland         26,547                                                     Finland      0.1%                                                          Finland        (1,810)
        Sweden           28,710                                                    Sweden        0.1%            Countries in the                             Sweden          (5,434)
        Norway         15,544                                                      Norway        0.0%                                                         Norway        (10,043)
        Canada                                                                     Canada
                                                                                                                 actual arctic circle
                                                           374,936                               0.0%                                                         Canada        (12,871)
         Iceland      636                                                           Iceland      0.0%                                                          Iceland      (21,357)

* MHV = Mechanically Harvestable Vegetables (defined as potatoes, sweet potatoes, other root crops, onions, carrots, cabbages, cauliflower and similar); Source: UN FAO; CIA World Factbook;
Coriolis analysis                                                                                                                                                                                                       41
New Zealand can produce more fruit, nuts and wine grapes

 AREA IN F, N & WG                                                  % OF TOTAL AREA                                                          IF NZ MATCHED THIS PEERS %?
 Hectares; 2018 or as available                                     % of country SQKM; 2018 or as                                            New NZ ha in FNWG; 2020+
            Spain                                      4,576,628               Spain                                                 9.0%               Spain                                               2,309,164
              Italy                      2,604,547                               Italy                                             8.6%                   Italy                                            2,200,563
       Portugal           678,766                                         Portugal                                          7.4%                   Portugal                                            1,856,353
           Serbia        426,502                                              Serbia                            4.8%                                   Serbia                                  1,168,321
         Greece           614,689                                           Greece                             4.7%                                  Greece                                    1,122,731
       Hungary          328,948                                           Hungary                          3.5%                                    Hungary                                 819,201
           France                   1,820,962                                 France                    2.9%                                           France                            641,088
       Romania              682,921                                       Romania                       2.9%                                       Romania                               637,636
        Albania        80,382                                              Albania                      2.8%                                        Albania                              619,077
          Poland             822,258                                         Poland                    2.6%                                           Poland                            574,066
       Slovenia       39,948                                              Slovenia                  2.0%                                           Slovenia                           395,783
         Croatia       103,886                                              Croatia                1.8%                                              Croatia                          359,306
       Bulgaria         163,324                                           Bulgaria               1.5%                                              Bulgaria                          261,223
         Belgium      43,092                                                Belgium              1.4%                                                Belgium                        244,606
          Austria       105,288                                              Austria            1.3%                                                  Austria                       202,359
    Luxembourg        3,210                                            Luxembourg               1.2%                                            Luxembourg                         198,557
    Net herlands      42,869                                           Net herlands            1.1%                                             Net herlands                       173,226
    Switzerland       47,249                                           Switzerland             1.1%                                             Switzerland                        172,373
    Montenegro        15,677                                           Montenegro              1.1%                                             Montenegro                         169,814
      Germany             379,190                                        Germany               1.1%                                               Germany                          150,014
         Belarus        186,321                                             Belarus           0.9%                                                   Belarus                      105,571
       Lithuania       55,134                                             Lithuania          0.8%                                                  Lithuania                      91,187
       Slovakia       25,819                                              Slovakia          0.5%                                                   Slovakia                     5,239
  New Zealand           137,173                                      New Zealand           0.5%                                               New Zealand                       -
          Estonia     14,042                                                 Estonia      0.3%                                                        Estonia        (53,199)
United Kingdom         60,918                                      United Kingdom         0.3%                                              United Kingdom          (69,341)
            Lat via   12,718                                                   Lat via    0.2%                                                          Lat via     (83,892)
       Denmark        8,336                                               Denmark         0.2%                                                     Denmark          (84,855)
          Ireland     3,332                                                  Ireland     0.0%                                                         Ireland     (124,349)
         Finland      14,190                                                Finland      0.0%                                                        Finland      (125,832)
        Norway        8,716                                                Norway        0.0%            Countries in the                           Norway        (129,893)
        Canada          189,443                                            Canada        0.0%            actual arctic circle                       Canada        (132,041)
        Sweden        8,000                                                Sweden        0.0%                                                       Sweden        (132,271)
         Iceland      -                                                     Iceland      0.0%                                                        Iceland      (137,173)

Source: UN FAO AgStat; ; CIA World Factbook; Coriolis analysis
                                                                                                                                                                                                             42
Peers suggest there are opportunities to increase the amount of
crop produced in greenhouses
 AREA IN GREENHOUSE/UNDER COVER: NEW ZEALAND VS. SELECT PEERS
 Hectare; 2014 or as available

                                                                                                                                                                                                                                                                                                                    89,600
                                                                                                                                                                                                                                                                                                           81,000
                                                                                                                                                                                                                                                                                                  72,800
                                                                                                                                                                                                                                                                                         71,698
                                                                                                                                                                                                                                                                           57,444
                                                                               The Netherlands has

                                                                                                                                                                                                                                                                  49,746
                                                                                                                                                                                                                                                         49,049
                                                                              more area in horticulture
                                                                                 inside than New
                                                                               Zealand has outside

                                                                                                                                                                                                                                                26,500
                                                                                                                                                                                                                       14,981

                                                                                                                                                                                                                                15,000
                                                                                                                                                                                                              7,560
                                                                                                                                                                                                    5,400
                                                                                                                                                                                          4,670
                                                                                                                                                                                2,790
                                                                                                                                                           2,700

                                                                                                                                                                      2,700
                                                                                                                                                  2,286
                                                                                                                                      2,200
                                                                                                                              2,100
                                                                                                                    1,600
                                                                                                        1,341
                                                                                             1,200
                                                                                  1,075
                                                                         1,000
                                                           688
                                                 418
               115

                         150

                                   209
  80
  Czech Rep.

               Denmark

                         Ireland

                                   Switzerland

                                                 Austria

                                                           New Zealand

                                                                         Serbia

                                                                                  Bulgaria

                                                                                             Columbia

                                                                                                        Australia

                                                                                                                    Belgium

                                                                                                                              Chile

                                                                                                                                      Argentina

                                                                                                                                                  Canada

                                                                                                                                                           Portugal

                                                                                                                                                                      Ukraine

                                                                                                                                                                                Romania

                                                                                                                                                                                          Germany

                                                                                                                                                                                                    Hungary

                                                                                                                                                                                                              Poland

                                                                                                                                                                                                                       Greece

                                                                                                                                                                                                                                United States

                                                                                                                                                                                                                                                France

                                                                                                                                                                                                                                                         Japan

                                                                                                                                                                                                                                                                  Turkey

                                                                                                                                                                                                                                                                           South Korea

                                                                                                                                                                                                                                                                                         Spain

                                                                                                                                                                                                                                                                                                  Italy

                                                                                                                                                                                                                                                                                                           China

                                                                                                                                                                                                                                                                                                                    Netherlands
NOTE: Data is from a wide range of sources and may not be perfectly comparable; many countries include glasshouse, greenhouse/PE tunnel & low tunnel; range of estimates for China (up to
2,760,000ha); Source: Cuesta Roble Consulting; “Greenhouse production systems in Mediterranean area” Leonardi/De Pascale May 2010; “Greenhouse Technology Globally: The future of food”;                                                                                                                                 43
Coriolis analysis
3. ADDING VALUE
The third potential driver is to add more value to existing output

1                  2                3
       LAND IN         OUTPUT PER       VALUE ADDED
                                                                   REVENUE
    PRODUCTION     X    HECTARE     X    PER TONNE             =    & JOBS
      (Hectares)         (T/ha)             ($/t)

                                         Improving products

                                         Improve positioning

                                        Transforming product

                                                                             44
New Zealand’s food & beverage exports are currently still over-
     weighted to low value-added, unprocessed ingredients
      AGRIFOOD EXPORTS VALUE SHARE BY SEGMENT: NZ VS OTHER RICH COUNTRIES
      % of value; 2017
                                                                                                                                                                                      100%
       Beverages
                                                                                                                                                                                      90%
Processed Foods
  Oilseeds, Oils & Fats                                                                                                                                                               80%
                 Grains
          Produce                                                                                                                                                                     70%
                                                                                                                                                                                      60%
                                                                                                                                                                                      50%
              Dairy                                                                                                                                                                   40%
                                                                                                                                                                                      30%
         Seafood                                                                                                                                                                      20%
                                                                                                                                                                                      10%
               Meat
                                                                                                                                                                                      0%
                            New Zealand

                                           Canada

                                                          Denmark

                                                                          Spain

                                                                                  Finland

                                                                                            Sweden

                                                                                                     Netherlands

                                                                                                                   Ireland

                                                                                                                             Germany

                                                                                                                                       Japan

                                                                                                                                               Italy

                                                                                                                                                       United Kingdom

                                                                                                                                                                        Switzerland
                                          CLEAR STRATEGIC DIRECTION
    Source: UN Comtrade database; Coriolis classifications and analysis
                                                                                                                                                                                       45
New Zealand predominantly sells ingredients to others; as a
result, it is currently missing out on food manufacturing jobs
 FIGURE 1: FLOW OF NEW ZEALAND MILK POWDER FROM THE FARMER TO CONSUMER
 Simplified model                                                     POTENTIAL NEW JOBS

                FARMERS                         DAIRY PROCESSORS   FOOD MANUFACTURERS         RETAILERS    CONSUMERS
                  (milk)                           (milk powder)     (processed foods)        (products)     (food)

                                                                        Baked goods
                                                                       Dairy products
                                                                       Infant formula
                                                                   Specialised nutritionals
                                                                     Proc. meat/analogs
                                                                         Beverages
                                                                       Nutrition bars
                                                                        Condiments
                                                                       Confectionery
                                                                     Dessert-type snacks
                                                                          Pet foods
                                                                       Savoury items

Photo credit: public domain; Source: Coriolis
                                                                                                                       46
The New Zealand food industry has a clear strategic direction
towards greater product complexity
                                                                                    Complexity                                                                                                 Complexity

    Bulk                   Retail Milk                   Retail                Medical &                                         Fresh                    Canned                     Frozen    Meal
   Powder                   Powder                       Infant                 Specialty
                                                        Formula              Infant Formula

 Ingredient                  Instant                  Retail Bar             Assorted/Mixed                                     Basic                     Manuka                    Manuka    Medical
 Chocolate                  Chocolate                 Chocolate                Chocolates                                       Honey                     Honey                     Honey     Honey
   Crumb                      Drink                                                                                                                                                Lozenges
Source: The Investor’s Guide to the New Zealand Processed Foods Industry 2017; Photo credit: various firms or fair use; low resolution; complete product/brand for illustrative purposes
                                                                                                                                                                                                            47
New Zealand has large and growing volumes of raw materials
 suitable for making more complex, consumer-ready products
  TOTAL NEW ZEALAND FOOD PRODUCTION VOLUME AT FARM GATE1
  T; 000; 1961-2018
    8,000
                                                                                                                                                                                                                          Honey

    7,000                                                                                    CAGR                                                                                                                         Dairy*
                                                                                            (61-18)
    6,000                                                                                    2.1%

    5,000                                                                                                                                                                                                                 Meat

    4,000                                                                                                                                                                                                                 Seafood
                                                                                                                                                                                                                          Eggs

                                                                                                                                                                                                                          Fruit**
    3,000

    2,000
                                                                                                                                                                                                                          Vegetables

    1,000
                                                                                                                                                                                                                          Cereals
         -
               1961
                      1963
                             1965
                                    1967
                                           1969
                                                  1971
                                                         1973
                                                                1975
                                                                       1977
                                                                              1979
                                                                                     1981
                                                                                            1983
                                                                                                   1985
                                                                                                          1987
                                                                                                                 1989
                                                                                                                        1991
                                                                                                                               1993
                                                                                                                                      1995
                                                                                                                                             1997
                                                                                                                                                    1999
                                                                                                                                                           2001
                                                                                                                                                                  2003
                                                                                                                                                                         2005
                                                                                                                                                                                2007
                                                                                                                                                                                       2009
                                                                                                                                                                                              2011
                                                                                                                                                                                                     2013
                                                                                                                                                                                                            2015
                                                                                                                                                                                                                   2017
1. Dockside for seafood production; *Milk is milk solids; meat is dressed but bone-in; seafood is green weight as reported; **Fruit includes wine grapes; honey line is thickened to make it visible;
Source: United Nations FAOStat & FishStat; MAF/MPI; Coriolis analysis                                                                                                                                                                  48
Peers suggest New Zealand can create more processed foods jobs
from its abundant raw materials
 PROCESSED FOODS JOBS PER 1,000 TONNE RAW MATERIALS*
 Headcount/1,000t; 2018 or as available

                                                                                                                                                                                                                                                                                                                      8.7

                                                                                                                                                                                                                                                                                                     6.7
                                                                                                                                                                                                                                                                       6.0 6.1
                                                                                                                                                                                                                                                             5.3
                                                                                                                                                                                                                                                  4.4
                                                                                                                                                                                3.9
                                                                                                                                                        3.5 3.5 3.6 3.8 3.8 3.8
                                                                                                                                            3.1 3.2 3.3

                                                     2.1 2.2 2.2
                 1.6 1.6 1.7 1.8 1.8 1.9 1.9 1.9 2.0
             1.5
   1.2
   Iceland
             Spain
                     Norway
                              Belgium
                                        France
                                                 Greece
                                                          New Zealand
                                                                        Romania
                                                                                  Poland
                                                                                           Italy
                                                                                                   Portugal
                                                                                                              Austria
                                                                                                                        Denmark
                                                                                                                                  Germany
                                                                                                                                            Australia
                                                                                                                                                        Latvia
                                                                                                                                                                 Sweden
                                                                                                                                                                          Canada
                                                                                                                                                                                   Ireland
                                                                                                                                                                                             Lithuania
                                                                                                                                                                                                         Hungary
                                                                                                                                                                                                                   Finland
                                                                                                                                                                                                                             Slovakia
                                                                                                                                                                                                                                        Czechia
                                                                                                                                                                                                                                                  Slovenia
                                                                                                                                                                                                                                                             Croatia
                                                                                                                                                                                                                                                                       Switzerland
                                                                                                                                                                                                                                                                                     United States
                                                                                                                                                                                                                                                                                                     United Kingdom
                                                                                                                                                                                                                                                                                                                      Estonia
*Non-grain based; Source: UN FAO AgStat; UN FAO FishStat; Eurostat; Statistics Canada; US DOL; USDA NASS; Statistics NZ; Australian Bureau of Statistics; Coriolis classification and analysis
                                                                                                                                                                                                                                                                                                                            49
Going forward, growth will come from creating more output from
less land and selling it as complex products at a higher prices

      UNLIKELY            YES               YES

1                  2                3
       LAND IN         OUTPUT PER       VALUE ADDED
                                                          REVENUE
    PRODUCTION     X    HECTARE     X    PER TONNE    =    & JOBS
      (Hectares)         (T/ha)             ($/t)

                                                                    50
In practice, growth will require some sectors to grow much larger,
as other sectors have growth constraints
 MODEL 1: EVERYTHING DOUBLES                                          MODEL 2: SOME GROW/OTHER NO
                                                                      GROWTH

                                                               +100                                                            +100
          38                                                   100                                                             100

                                                                           7

                                                                                        28
                   18
                        15                                                                           28
          38                                                               38
                                10
                                       7                                                                                 18
                   18   15                     5                                 18     15                         12
                                10                    3                                        10            1                    8
                                       7       5           2      2                                   7      5
                                                      3    2      2                                                3       2      2
                                                                                  -1           -1
           A       B     C      D       E      F      G    H      I        A       B    C      D      E      F     G       H      I

           - Simple story: “Rising tide lifts all ships”                - More complex story: “The Good, the Bad and the Ugly”
           - Assumes all sectors can double in the timeframe            - Assumes some sectors cannot grow significantly
           - Often how it is “spun” politically                         - Other sectors will need to grow 5x or 10x to compensate
           - Unlikely in reality                                        - Peer group regions suggest this is the likely outcome

Source: Coriolis
                                                                                                                                      51
Therefore there is a need to focus efforts in sectors with the
potential to grow five or ten times larger
 SIMPLE GROWTH MODEL SHOWING 5X OR 10X GROWTH

                                                                                    100

                                                      10x
                                                 50

                   5x

                    10                                      10

                        Potential Growth Sector "A"         Potential Growth Sector "B"

Source: Coriolis
                                                                                          52
Numerous product categories have been identified that can
contribute to this growth
 IDENTIFIED PRODUCT CATEGORIES THAT CAN CONTRIBUTE TO GROWTH
 Model; 2019
                 DAIRY          RED MEAT                POULTRY                 SEAFOOD                     F&V
      Advanced/Medical       Meat-Based Snacks       Further Domestic         Atlantic Salmon     Under Cover/Glasshouse
        Infant Formula                                 Consumption
                                                                                                        Root Crops

            Dairy-Based                                 Target Key                                 Processing Vegetables
                             Branded, Packaged
            Nutritionals    Consumer Case Ready       Export Markets                                        Nuts

         Non-Cow Dairy                               Develop Value            Region Suitable             Apples
                                                     Added Products             Aquaculture
                              Consumer-Ready                                                             Kiwifruit
                             Convenience Meals                                                           Avocados
        Specialty Cheese                                Alternative
                                                      Poultry Species                                 Emerging Fruit
        ARABLE/GRAIN          OTHER FOODS          PROCESSED FOODS                WINE             OTHER BEVERAGES
High Dairy Baked Products         Honey               Nutraceuticals          Sparkling Wine          Alcoholic Spirits
              Oat ‘Milk’                                 Pet Food                ‘Cognac’                 Water
                 Seeds             Eggs           Confectionery/Snacking                              Cider & Similar
                                                                           Non-Marlborough Reds
       Hemp (F&B usage)                           New & Innovative Foods                           Premium Non-Alcoholic

Source: Coriolis analysis
                                                                                                                           53
Realising this growth opportunity requires three specific sets of
potential investors

                        EXISTING                          NEW LARGE                                      NEW AND
                      LARGE FIRMS                       INVESTORS WITH                                   EMERGING
                        AT SCALE                        SCALE AND SKILLS                                   FIRMS

                      REINVESTMENT                            ATTRACTION                                 NURTURING

         - Remove barriers to investment            - Identify the right investors (rather    - Encourage both existing small firms
                                                      than ‘waiting for the phone to ring’)     and new start-ups
         - Ensure available capital is reinvested
           in New Zealand (not elsewhere)           - Focus on firms able to add value to     - Focus effort on scaling small and
                                                      New Zealand volume                        medium firms into large, globally
         - Sell New Zealand; make the case for                                                  competitive firms at scale (currently
           investment in F&B here                   - Sell New Zealand; make the case for       falling over here)
                                                      investment in F&B here

Source: Coriolis analysis
                                                                                                                                        54
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