Water is New Zealand's most important natural asset and primary sectors need to maximise it, says Ian Proudfoot, head of agribusiness and lead partner, consumer and industrial products with KPMG.

'There is a real water issue in the world. In New Zealand we have 72 million cubic metres of fresh water per person, far more than anywhere apart from Brazil. In China and India it is about 1.2 million cubic metres per person.

'We need work out how we maximise that advantage in terms of agriculture. What we are doing in effect is taking water, putting it through a ‘converter' and exporting it in the form of proteins. How we use water effectively will be very important in future.”
Ian says the world's growing population offers opportunities and challenges for New Zealand producers.
Between now and 2050, 68 million people a year will move from the world's rural areas to cities.
'That's the equivalent of three Shanghai cities each year moving to urban living, creating a huge challenge for the food system.”
The world population is predicted to grow from 7 billion to 9 billion in the next 37 years and 1.5 billion of that growth will be in Africa, which is already struggling to feed its people.
However, there is also a growing middle class in the Asia Pacific region – people who don't have to buy food to survive but like to buy food to enhance their lifestyle.
'I think from New Zealand's perspective, this creates potential customers but doesn't give us guaranteed customers.”
Global food retailers are key players in the food sector with the biggest operating across 91 countries and accounting for about $1.3 trillion worth of sales.
Ian says competition among those retailers is intense and each is trying to work out how to engage better with their customers.
Thanks to governmental austerity measures in Europe there is a focus on price, and supermarkets look to find ways to keep their customers spending. For the Coles chain in 33 countries, 75 per cent of the produce it sells comes from local supplies, which creates challenges for New Zealand which is so far from its markets.
'Supermarkets like corporate brands and 70 per cent of the sales in Coles are its own brand rather than other brands.”
Ian also predicts there will be significant developments in underused land around the world.
'I recently visited a client in Russia, who farms 110,000 ha of the best soils in the world. They have milk maids milking cows by hand. The opportunities for increased productivity are immense and when they increase productivity they will have more products to sell, which changes the world markets.” Not long ago it was difficult to find investors keen to put money in the primary sector but Ian says that's changing with a lot of new capital available for agriculture. There is growth too in non-food agricultural products, such as stock feed.
'The demand for stock feed will be driven by significant uplifts in consumption of animal proteins together with production growth. The absolute growth of demand for poultry is estimated to be 170 per cent between 2000 and 2030.”
New Zealand's role in the global agri-food system will depend on a number of factors.
'Scale is critical to being an effective niche operator. Avoid being all things to all people and focus on the competitive advantages.”
Ian advices that New Zealand producers identify the next big thing of things for customers and build leverage connections with in-market partners.
Telling the story of how, where and who produced foods – in other words the provenance story must be substantive, says Ian.

# Ian Proudfoot was one of the keynote speakers at Nutritional Values, the 5th New Zealand and Australian Avocado Growers' Conference in Tauranga in September.