Sales growth is the top priority for the vast majority (92%) of NZ small businesses engaged in food or drink production.
Small and medium-sized enterprises (SMEs) in the food and beverage sector remain strongly optimistic about expansion across the Tasman, despite (or perhaps because of) economic pressures faced by consumers in New Zealand.
We recently met with 60 SMEs at the Auckland Food Show and most told us they were focused on growth for the next 12 months. Australia stands out as the leading market of interest, with 20% of New Zealand’s SME food and drink makers already exporting there, and 42% planning to do so soon.
In addition to Australia, markets such as the US, Japan, and Singapore remain appealing to 20-30% of companies. However, China is now viewed more cautiously, seen as a mid-to-long-term goal. Geopolitical risks and a slowing Chinese economy have tempered enthusiasm for immediate expansion there.
Over the next year, food and drink SMEs are poised to take decisive actions to fuel their growth:
Developing new products: 73% plan to innovate and expand their product offerings.
Expanding to new areas within New Zealand: 76% are looking to increase their domestic footprint.
Expanding to new overseas markets: 51% are eyeing international growth.
Finding new customer segments: 66% are targeting new customer types to boost sales.
Increasing sales volume and gaining market share: An overwhelming 92% are focused on boosting sales and capturing more market share.
While growth is the primary focus, companies are also making careful financial decisions in response to economic pressures. About 49% plan to cut non-essential spending, but SMEs are split on how to respond to inflation with 27% intending to raise prices and the same number planning on keeping prices unchanged. Just 24% are looking at reducing input or marketing costs, and only 20% are considering downsizing or reducing overheads.
This balanced approach speaks to the sector's resilience and strategic focus on long-term growth, even in the face of economic challenges.
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