Demand for industrial property for the food and beverage industry

Demand for industrial property for the food and beverage industry

Industrial - Workplace October 2019

Demand for industrial property for the food and beverage industry

While there’s unprecedented demand around the country for industrial property from logistics, warehousing and distribution companies, there’s also increasing need for industrial space to cater to food and beverage processing, and the production of complementary medicines, cosmeceuticals and nutraceuticals.

According to Plant & Food Research, a New Zealand government-owned Crown Research Institute, the international food and beverage industry is growing at around five percent a year and global expenditure on food products by consumers is expected to reach US$20 trillion by 2030.

It says key trends for new product development are in health, convenience, naturality and sustainability with the intrinsic “health halo” of natural produce meaning products derived from fruits and vegetables are highly sought-after in the global marketplace.

Manuka honey led the way, but “functional foods” – that is, foods that offer benefits beyond basic nutrition – is one of the fastest growing segments of the global food industry and it’s taking off in New Zealand.

There’s a lot of talk about mussel derivatives to help combat inflammation, cherry concentrates deemed to assist with sleep, probiotics said to improve gut health, trending superfoods like blackcurrants said to aid exercise recovery and post-exercise immune function, along with extracts from seaweed, kelp – even native tree ferns with health-giving claims.

New Zealand is also jumping on the “nootropics” train. These are plant-based supplements, and other substances that may improve cognitive function, particularly executive functions, memory, creativity, or motivation, in healthy individuals.

And then there’s plant-derived protein products which are starting to make waves.

Plant & Food Research says the broad category of agri-food exports from New Zealand are predicted to treble by 2025, to around NZ$58 billion. This is primarily due to the production of new high-value food and beverage products, combined with value chains that enhance the delivery of New Zealand products to its premium customers.

An example of a business with a consolidated presence within an industrial estate, is Hamilton-based dairy biotech company Quantec which operates from the Waikato Innovation Park.

Quantec has received multiple awards, including the Cawthron Institute Innovation Award, for its specialist approach to extracting high-value bioactives from natural ingredients which are then developed into proprietary ingredient formulations for use in human and animal products.

One of Quantec’s main business growth areas is within the gut health and immune health sector in China. Quantec is combining omega-3 oil with an aqueous milk protein powder to produce a high-end innovative nutraceutical product to be marketed to the mother-baby supplement market.

Natural Health Products NZ, a national industry organisation representing the natural products, functional foods, complementary medicines, cosmeceuticals, and nutraceuticals industries, says New Zealand’s natural products industry is worth NZ$1.4 billion annually and growing. Major markets are already established in Asia and North America, and there’s a developing presence in Europe.

A report released by research and consulting group Coriolis in conjunction with the Ministry for Business, Innovation and Enterprise, The Investor’s Guide to the New Zealand Processed Food Industry 2017, says New Zealand has robust credentials to attract new investment in food-related industries and the potential to drive strong export growth.

It says as a country, we have significant untapped potential to generate more product, to add value to large volume of raw material ingredients which at present are exported as unprocessed commodities, and to bring a distinct and unique edge to the sector.

This signals that there will be increasing demand for industrial space to accommodate this growing sector and it is likely that location will be pinned to areas with good distribution links for export.


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