Unlocking growth in New Zealand’s food and fibre sector

Artificial Intelligence (AI) enables precision agriculture that optimises everything from irrigation to harvest timing, automated warehousing and logistics, predictive analytics for supply chain management, and enhanced customer engagement through personalised product offerings. For processors and producers willing to invest, the economic benefits of AI are expected to exceed the stranded asset costs associated with decarbonisation, creating a net positive pathway for growth.

There are a few companies leading the way, for example Halter, which uses AI to manage livestock movement and optimise grazing through smart collars, reducing labour costs while improving pasture performance and farm productivity. Yet New Zealand historically lags international counterparts in advanced technology adoption. A 2022 AgriTechNZ study² found that while 59% of businesses lean towards adopting digital technologies, 41% still see little value in them.

But consider the flip side: climate disruption in other regions creates opportunities for New Zealand producers who can adapt.

Indoor, year-round production facilities that bypass seasonal constraints are showing the way here and overseas. Examples include Tatsumi NZ’s 150-tonne above-ground strawberry production facility in Hawke’s Bay and Dyson farming’s hybrid vertical growing strawberry facility in the UK, which leverages vacuum technology to revolutionise strawberry production.

These facilities demonstrate how innovation can turn climate challenges into competitive advantages. And as drought frequency increases globally, our ability to produce consistently, sustainably, and with full traceability becomes increasingly valuable.

With over 80% of New Zealand's exports by value going to countries with mandatory climate-related disclosures³, meeting environmental standards is a prerequisite for market access.

Supply chain disruption, conflict-induced tensions and the recent resurgence of tariffs have exposed vulnerabilities in our export-dependent model.

Our recent successful agreements with the EU, Indonesia, China, Vietnam, the UAE and Gulf Cooperation Council demonstrate this approach works. But we can't be complacent. Some competitors enjoy less rigorous food standards – Australia's regulatory environment, for instance, allows faster market entry for some products. New Zealand must advocate for policy frameworks that recognise our quality standards as competitive advantages, not barriers.

The key is transforming potential constraints into selling points. Businesses that can demonstrate supply security, enhanced visibility and control over their supply chains can create competitive advantage from disruption.

Today's consumers demand more than quality – they want proof. 

Attributes like traceability, provenance and transparency have become indispensable, with 75% of consumers considering transparency important and two-thirds willing to switch brands to get it⁴.

Brand verification is becoming a must-have. Digital traceability systems that provide a complete supply chain footprint allow producers to prove environmental claims while seizing competitive advantage through direct export channels and enhanced consumer relationships. Companies like Fonterra – the first dairy company globally to electronically trace its products anywhere in the world within minutes – demonstrate how end-to-end visibility transforms supply chain transparency from a compliance requirement into a market differentiator. 

Māori provenance offers another underutilised competitive edge. As conscious consumers in wealthier markets seek authentic, ethically produced food, the cultural narrative and sustainability practices inherent in Māori agribusiness present genuine differentiation. While this requires strong traceability systems, collective momentum, in-market relationship building, and intentional brand building, the opportunity is significant.

So how can the New Zealand sector capture its share of the more than NZD$12 trillion up for grabs in the great ‘revenue redistribution’? ⁵

Here are some actions food and fibre businesses can take now to ensure the best chance of success:

• Innovate your operating model. Deploy AI for precision agriculture, automate warehousing and logistics, and use predictive analytics for supply chain optimisation.
• Innovate your business model. Take an ecosystem perspective by building new partnerships across the food supply chain to respond to specific needs of mature and emerging markets.
• Compete on trust and technology. Implement digital traceability systems to verify environmental claims while seizing competitive advantage through direct export channels.
• Build transparency and agility. Use data and analytics technology to understand market dynamics more deeply and respond quickly to customer demands.
• Strengthen climate resilience. Build flexible supply chains and manufacturing processes that can adapt to climate-induced shortages and changing growing conditions.