Having the right ingredients makes engineering in the food industry a very profitable venture.Engineering News talked with some of the key suppliers to the industry to see just what was the state of the industry, how their business were tracking and the pros and cons of doing business within the food industry in today’s very different marketplace. Here’s what a few of them had to say…
Braden Goddin of Aurora Agencies is heavily involved in the food processing machinery side of things; a sector that is heavily reliant on the dairy industry.
“Things are pretty good. The dairy industry is quite bipolar, if you like, and influenced by what the auctions are doing and that directly affects CAPEX release from the likes of Fonterra, so if you get a good auction and dairy prices are going the right way for a few weeks you get some orders that you have been chasing for six months,” he says.
The nature of this industry is that the ‘on’ comes with just as quick an ‘off’ button.
“It’s relatively predictable though, plus at this time of the year is when a lot of activity occurs around purchasing because equipment gets installed and then winter ‘shuts’ so if businesses wants to get it installed in time they have to start ordering equipment about now.”
In the food industry, though, Mr Goddin says it doesn’t work to similar cycles.
“We find that capital movement in the food industry is fairly consistent, there’s always something going on.”
He says that in the food industry CAPEX process boils down to individual company direction and what plans they have and with the current buoyant nature it’s a sector that Aurora is placing more emphasis on.
Geoff Ebdon doesn’t mix words. He’s quick on the phone and even faster to state his piece and he too talks about a marketplace that is on the up.
“Basically, everything is gang busters and everyone wants it done yesterday,” says Mr Ebdon of NZ Duct and Flex.
His company supplies to a number of industries, food being an important but also growth sector. The company has outgrown its original format of simply supplying duct and flexible duct, to now offer the largest range of dust and fume products available in the market.
“We stock and can install complete systems using components that are widely available globally: they are tried and tested solutions – not ‘one offs’ designed for a single customer. This efficiency allows us to be competitive and draw on the engineering experience of three major global suppliers with experience of thousands of industrial extraction solutions,” says Mr Ebdon.
“I think New Zealand produces some of the best food in the world and has a great reputation for this and we happen to be, at long last, on the right side of the globe to where all the growth is occurring.”
Europe and America are getting increasingly protectionist he says. There was a classic case in media in the UK where grocery chain Waitrose has used New Zealand lamb in one of their classic British recipes,” he says, and thus got skewered by both the public and the National Farmers Union.
“Not quite the ‘Best of British’ they intended,” says Mr Ebdon. “So, they got caught. “Whereas of course, South-East Asia doesn’t give a damn, they just want good quality food. And 50-60 years ago, they could never afford it but how things have changed. The middle class in China is probably bigger than the middle class in America.”
He says this has caused a flow-through effect right throughout the industry. “The other thing that is happening around the world is that the brands are coming back again. The supermarkets for many years controlled everything. But with the growth of the internet know, people are starting to look and they can get holds of products and brands at a click of the mouse.”
Mr Ebdon orders a lot online, and can get product into New Zealand from the UK within a week. This is now occurring in reverse, with British buying Kiwi product such as wine without a second thought. “It’s just so readily accessible now whereas we used to be at the end of a very long food chain,” he says.
“We’ve always been in the traditionally engineering/manufacturing side of things rather than the food industry but as we’ve grown, and the internet has become more prominent, we’ve expanded and continue to do as we go on.
“We’ve also expanded our range to include a lot of stainless steel now and complete systems. With the food industries’ doors in New Zealand opening, we are feeling that flow through affect.”
Chris Farmer of Eurotec New Zealand also believes the food industry is strong, and Eurotec’s growth in the supply to this industry is being driven by legislation.
Eurotec describes itself as a distributor of superior quality controls, instrumentation, gas detection, humidification and ice-making equipment for the HVAC, refrigeration, industrial process, electrical and food industries.
“We are leaders in food safety instrumentation, measuring equipment for food processes, transportation and distribution equipment and retail… basically from farm to fork.”
With a wide product range, Mr Farmer says the company is also expanding into industrial censors as well, particularly in beverage and brewing.
“The new Food Safety Act, in process now, has impacted on business supply and requires much stricter controls in place which play a major role in the supply of machinery”
“We’re the New Zealand distributors for global brands, such as Tesco, and being a European manufacturer they are highly recognised with quality of product. Our whole business is focussed on technical quality, superiority and because of this need for greater standards we fit well with the new Act and requirements,” he says.
Being the major supplier of food safety instruments to the Kiwi food sector, and already with a massive in-house emphasis on high standards, Mr Farmer sees the new Act as a way of getting rid of what shouldn’t be there anyway.
“All the major chains use our product and we are well established, and for the smaller businesses we have an online store to accommodate for everyone,” says Mr Farmer.
“The economy is healthy and business is buoyant while the food sector is also strong which reflects well on business throughout the chain.”