With the fuller effects of the New Zealand-South Korea free trade agreement just starting to kick in with its lower tariffs, trade commissioner Stephen Blair could be forgiven for feeling he may miss the best of what the agreement has yet to bring.
Blair has returned to NZ after four years in the role as trade commissioner to South Korea with NZ Trade and Enterprise (NZTE). He is taking a break, and Portuguese lessons, before taking to his next role as regional director of NZTE’s Latin America office, based in São Paulo.
Jumping across cultures for his next role has Blair relatively unfazed, and he’s excited by the strong agritech prospects South America offers. That comes after the consumer-driven, food and beverage-focused work he and his team busily built on from their Seoul office in South Korea.
Looking back on his time in South Korea, Blair said he sees the country as a market still full of opportunity for NZ food and beverage exporters and one far from its full potential.
“The free trade agreement has been a fantastic tool to have. But the hard work starts with NZ exporters to make the most of the opportunity it presents, with NZTE support. It is very rewarding to see that dairy is now NZ’s No 1 export to Korea. Previously it had been logs and aluminium, almost forever.”
Fonterra’s work in developing high quality whey protein ingredients for the active-lifestyle health drinks sector is paying dividends. Demand is also growing for products including mozzarella and butter, with tariff levels no longer a distraction and disincentive for market development.
Work on the Anchor brand of products is being integrated into educating consumers about the value of quality grass-fed dairy products and the nutritional quality of “golden” coloured butter.
The other early wins under the ever-lower tariff environment have come with Zespri enjoying continuing growth across both Green and SunGold fruit types and working hard towards the declared aim of being the largest revenue-generating fruit company in South Korea.
“And then we have seen Comvita and Jack Links beef jerky also performing well.
“What stands out among all these companies is the commitment they have made into the market.
“They have invested in people on the ground, growing often from a single person to build entire marketing teams, gathering consumer insights and developing partnerships, justifying business cases to take to head office at home to further the work.”
Red meat remains a challenging sector, with heavily entrenched and well-funded United States and Australian producers occupying aisles of chiller space in supermarkets at historically lower tariffs.
Blair’s team found through consumer research that NZ lamb and beef are well regarded by consumers.
“But the challenge I think is one of regular supply to market. Seasonality and logistics issues have posed some issues in the past.”
A Farmers Weekly visit to South Korea last year highlighted frustration within Silver Fern Farms at the difficulty of securing a regular, direct chilled shipping delivery to Korea.
Its absence had seriously undermined the company’s efforts to build on what was a burgeoning trade in its lean, chilled beef products.
Meantime the NZ industry was missing in action, with no industry investment into the NZ red meat brand, while Australia and the US poured millions into their respective country brands.
Blair is optimistic that the shipping issues will subside, with greater challenges lying further afield with issues over diversions from the Red Sea.
He continues to see plenty of opportunity for NZ beef, which at present is less than 2% of the beef market. Meantime NZ lamb, while overshadowed by cheaper Australian product, is the preferred option for high-end restaurant chefs.
With a densely populated urban area that captures almost 30 million people within two hours of Seoul, Korea is a market that, once product has arrived, can easily and efficiently distribute it internally, Blair said.
“There is a unity of supply chain delivery you don’t always get in other countries. All the logistics and distribution companies are national, and the network is very highly developed.”
In the past year NZ velvet has also started to cement itself as a high-value ingredient item, reinforced by receiving validated health claims for prostate function and as an anti-fatigue treatment.
Both have come as the result of a long-term partnership between pharmacy company New Origin and NZ researchers.
Wine has also continued to enjoy strong success, with South Korea being the fastest growing export market for NZ sauvignon blanc, popular among its young, professional female demographic.
“And I see seafood and pet food as two areas with a lot of potential. Pet ownership is booming in a country with the world’s lowest birthrate. Pets are replacing kids.”
Blair said he looks forward to the São Paulo role, and, while he’s not likely to miss Korea’s harsh winters, he will always warmly remember its food, pristine national parks and forward-looking people.
