Age of co-opetition dawns

16-08-2010 | Hugh Stringleman

Get a big group of growers together in Auckland's Sky City Convention Centre and exhort them to cheer: 1, 2, 3 . . . HORTITUDE! Is that what an ambitious, $10 billion exports by 2020 strategy suggests?

Behind the razzmatazz, away from the bright lights of Auckland, what has the $500,000 Horticulture Industry Strategy: Growing a New Future achieved just one year since launch?

With a disparate group of fruit and vegetable industries containing strongly competitive corporates and family-growers, can anything be gained from a sector strategy?

Four speakers during a strategy session at the 2010 Horticulture New Zealand conference in Auckland explained how "co-opetition" was working for their industries.

Session chair and Deloitte's partner Alasdair MacLeod said he was enormously proud of the sector's assumed ownership of the strategy, adding that after facilitating the strategy-setting process he announced he wanted to invest in the sector.

"But I was swamped with offers so that made me a little nervous," he joked.

"This sector blew me away with the passion and commitment of the individuals that I met.

"One year on I am very keen to hear how you are turning your plan into reality."

MacLeod reminded delegates that the key messages in the strategy are that a grower's competition is not the grower next door but those overseas, for the need to create scale for investment in research and market development and the critical importance of attracting young, talented people into the sector.

Reference back to the summary of the strategy released in July 2009 shows that Deloittes warned the sector "if you keep doing what you are doing now, you will diminish over time".

"Significant growth is achievable but it requires change in behaviour and attitude," it said.

MacLeod also repeated that horticultural industries need to dominate product categories in niche markets because NZ can never hope to feed the world with fruit and vegetables.

Potatoes group manager Ron Gaul said 200 growers are now generating $100 million annual revenue, 10 times the revenues of the mid 1990s. Three-quarters of their output goes into frozen products versus almost nothing 15 years ago.

"If we can do this separately, what can we do together?" Gaul asked, adding that the industry aimed to treble its earnings by 2020.

Persimmon Industry Council chairman Lindsay Wells said his sector's 36 growers aimed to double their productivity again as most of the collective effort hitherto had gone into post-harvest and marketing.

Horticultural consultant Peter Luxton said the squash industry, which had been in decline as fewer growers got larger, had formed an export market development group.

"I am very encouraged by the level of engagement between major players and we have a proposal to growers to fund a market development strategy," he said.

Leading avocado exporter John Carroll, of Primor, said the Avanza collaborative group formed in 2004 by the four largest exporters, accounting for 90% of trade, is like a V8 vehicle sitting in the garage.

"It is designed to collaborate on new market development, Japan, the United States and China but biennial bearing in avocado trees means that it is under-utilised as we supply mainly Australia at present."

Carroll said there was no doubt that co-ordinated supply enhanced the confidence of customers and attracted the best type of customers and that Avanza will prove to be very useful.

It is being used by Trade and Enterprise as an example of co-opetition in export markets.

HortNZ chief executive Peter Silcock said the "hortitude" theme for the conference indicated that a change of thinking is required to achieve $10 billion of exports.

"We want to illustrate new ways of coming together and working together to implement innovation.

"Part of the HortNZ effort to implement the strategy is putting out these strong messages," he said.

Although it was early days for the strategy implementation, product groups had done a lot of re-thinking.

The fresh vegetable group decided it didn't know enough about its biggest market, domestic sales, and was actively collecting more information.

Pipfruit NZ had developed its Produce of NZ website with its links to 100% Pure NZ branding to place more emphasis on the NZ identity of export apples.

"Growth has a number of elements and there are different ways of getting to our target," Silcock said.

The strategy also reminded growers that changes are necessary to protect their positions as well as grow in the next decade.

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