Circular Economy and Bioeconomy Strategy

(Tim Morris and Virginia Wilkinson are in a window in the top left corner of the slide.  Slide shows a landscape of hills down to the water and the title in a box in the top right corner is Coriolis and Ministry of Business, Innovation and Employment with the heading Emerging and Future Platforms in New Zealand’s Bioeconomy)

Welcome to our presentation on our work on the emerging and future platforms in New Zealand’s bioeconomy.

Tim Morris

I am Tim Morris. I am the Director of Coriolis.  With me is Virginia Wilkinson, she is our Research Director. We were the lead researchers on this project, and we are looking forward to taking you through that research today.  This is going to be a brief summary of our work and there is over 1300 pages of material developed in this project, so there is a lot here.  We are just going to go through it at a high level and present from the different documents that we have done and talk to some of high-level work we did in the themes really as a teaser for you to go and get into the material more than anything else.

Virginia Wilkinson

First, we would like to thank the lead organisation, Ministry of Business, Innovation and Employment.  This project was also supported by Ministry for Primary Industries, Ministry for the Environment and New Zealand Trade and Enterprise.  Also, thanks to the businesses, academics, researchers etc that helped us out with this project.  We really appreciated it, thank you.

(New slide stating that the project woks to a clear client brief and lists client brief and select key concepts, which are the challenges, purpose of the work and the requirements)

Tim Morris

This project works to a clear client brief and obviously this is just very brief summary of the client brief but really the challenge that we are looking at is New Zealand’s economic activities is how you look at exceeding environmental limits and we need to deal with that.  What we are trying to do here is develop an evidence base to enable New Zealand’s bioeconomy to further develop moving from the economy of the past to the economy of the future, and an economy that is more in tune with environment, the concepts of both the bioeconomy and then a circular economy as well.  What we are trying to do in the document in the research is identify commercial opportunities that are emerging now and potential opportunities that might be viable in the future for new sectors, new platforms for New Zealand as we move into this new future.

(New slide – The project resulted in a suite of six related reports – list each report with a photo and title of each report on the slide)

Virginia Wilkinson

The project resulted in a suite of six related reports and as Tim said, this is what we will be going through today at the presentation.  Essentially the six are:

Finding the way, that is essentially a screen of all the emerging and future platforms in New Zealand’s bioeconomy.  It is also where all the methodologies sit in that one, so if you are ever lost go back to that one.  Stage II then looks at the 30 Opportunities that are most attractive and during this presentation we are going to be going through one of those so you can see what that looks like.  Then out of those stages came Sports Nutrition and Weight Management, Biocosmetics and Marine Bioactives.  These were the three high potential platforms along with others that were also very attractive.  Then supporting all of this research is the Situation and Capabilities.  Essentially that looks in more detail at the resources that we have in New Zealand to work with.  The resources of the bioeconomy and also looks at what are some of our capabilities are within those.

(New slide – Tim Morris and Virginia Wilkinson are in a window in the bottom right corner of the slide.  Slide shows a landscape of hills down to the water and the title in a box in the top right corner is Coriolis and Ministry of Business, Innovation and Employment with the heading Emerging and Future Platforms in New Zealand’s Bioeconomy)

Tim Morris

The first document we are going to talk about is Finding the Way.  This was the first stage in the screening process that we used here so in finding the way were looking basically at boiling the ocean, the universe of everything that was possible, bringing that down to 100 products or platforms, as better use of word for those, and then identifying 30 high potential platforms within that.  The documents organised again at a high level for a big document, an introduction, then there is then looking at the situation, complication and the resolution and why are we here for the whole project, why is the whole project here? Then discussion of the screening methodology and the process, the identification of the 100 products or platforms and some appendices.  The situation is that world primarily wants biomaterials.  Biomaterials just meaning things that come from farming, things that come from forestry, things that come from fishing or aquaculture.  The world primarily wants biomaterials from New Zealand in terms of our exports and as a result the bioeconomy is critical to the total New Zealand economy. What is the complication to that, the wider economy is New Zealand’s largest single contributor to climate change, unlike other countries like Japan or Germany which are highly industrialised, New Zealand is still primarily an aquarium economy and a service economy and so most of our contribution to global climate change is coming from our wider bioeconomy.  What is the resolution, what is the solution we are trying to get at here? The New Zealand economy can shift from being part of the problem to being part of the solution. That is what we are trying to do with this work.  At the simplest level the bioeconomy produces and process biomass  

(New Slide – At the simplest level, the bioeconomy produces biomass (bio) for sale in markets (economy) to consumers (and other suppliers to them.  Includes a chart showing the process flow and a quote and the reference to the quote)

ie the biopart of the phrase, for sale in markets via economy to consumers and suppliers to them.  What we realised as we thought about the problem is New Zealand has biomass production and harvesting systems and we have got to make biomass to feed into the system that biomass flows into various organisations with various names and they handle it, they sort it and they process it.   It can be anything from a sawmill, a dairy plant to a fishing boat.   Those primary processors produce products that often go to others for processing, a simple example of that would be milk powder then going to another processing facility to be made into infant formula, those products ultimately, and there might be multiple stages of produced products that finally go to markets.

(New slide – Situation – The Bioeconomy accounts for 60% of New Zealand’s land use – a chart showing the land use in New Zealand – source data reference at the bottom of the page) 

Again, still on the situation here the bioeconomy accounts for 60% of New Zealand’s land use so New Zealand which is often called a small sized country, but actually a reasonable sized country, similar in size to Italy, the United Kingdom or Japan.  60% of New Zealand is used for producing biomaterials. 

(New slide - The wider bioeconomy accounts for at least a quarter of all employment in New Zealand depending on how you think about tertiary sectors and service providers – includes a pie chart with breakdown and reference for the data used at the bottom of the page)

The wider bioeconomy accounts for at least a quarter of all employment in New Zealand depending on how you think about tertiary sectors and service providers.  When you look at the New Zealand bioeconomy and the jobs that it creates, the core bioeconomy creates 14% of all jobs in New Zealand.  Other related things like supermarkets, food servers, garden supplies, other retailers, pharmacy etc, that sell biomaterials brings you up to 25% of the economy.   Research done on the US, which was really good research done on the US, shows that in the US for every job in this core bioeconomy, as we have defined it, another job was created supporting it and that is very clear in the New Zealand context as well.  Arguably, and we would stand by it, probably 50% of jobs in New Zealand rely on the bioeconomy one way or another.  If you think about things like advertising agencies or banks.

(New Slide - The products in the New Zealand bioeconomy account for at least 2/3 of New Zealand’s total exports – this includes a chart which is titled “Total New Zealand Goods and Services Exports” which gives a breakdown and data referred to is references at the bottom of the page)

The products in the New Zealand bioeconomy account for at least 2/3 of New Zealand’s total exports of goods and services, food and beverage being the big one, within that wood products and obviously there is a range of other things within the bioeconomy. 

(New slide – Complication – Human activity is leading to increased greenhouse gas emissions – three charts showing carbon monoxide, methane and nitrous oxide emissions and data, data referenced is at the bottom of the page)

Human activity is leading to increased greenhouse gas emissions.  This is the global picture we have got, surging carbon dioxide, surging methane, and surging nitrous oxide. 

(New slide – Complication – New Zealand’s emissions are not declining – three charts showing New Zealand’s carbon monoxide, methane and nitrous oxide emissions with data, data references at the bottom of the page)

New Zealand’s emissions are not declining at the same time.  New Zealand’s carbon dioxide emissions are relatively stable.  Methane emissions are moderate to stable to moderately declining and are nitrous oxide emissions are surging.  We have made commitment globally in various agreements, the Paris Accord and elsewhere that we are going to reduce these, but they are not reducing. 

(New slide – Resolution – Governance – ultimately society – is asking a lot of New Zealand’s bioeconomy – multiple somewhat conflicting objectives need to be delivered – in a nutshell what problem are we trying to resolve? – Three tables setting out what we are trying to resolve and a quote at the bottom of the page)

As a society we want our bioeonomy to deliver on these objectives in order to maintain and grow this incredible employment that it creates for us, and we want to ensure a stable domestic supply of food, fibre, and wood.  We want to grow export revenues and maintain or grow our contribution to GDP, while at the same time the bioeconomy is going to face higher wages, higher labour, we want to be richer country, we want to pay people more.  We are going to have more rules and high compliance costs, that is just a fact of life. We are going to have higher energy costs and there is going to be less land and less useable water space.  At the same time to achieve our national and global targets we must emit less carbon dioxide, create less methane, create less nitrous oxide, and send less waste to landfills.  This is the problem we are trying to solve, we are trying to find products, platforms within the bioeconomy that can help us get to this. 

(New slide – Resolution – Six high level strategic themes emerged to guide New Zealand towards the bioeconomy of the future – two tables – first one titled:  What are be trying to resolve?  Second one titled:  How will we achieve it?)

These challenges, the problem we are trying to solve lead to the six strategic themes, and this is how we devised that scorecard that would allow us to say which of the products made sense in our future.  We are going to need more biomass in the bioeconomy in the future, we are going to need to increase our value-add, we are going to need to build resilience, resilience we have seen from COVID, we have seen through war in the Ukraine, we are trying to build both regional resilience and resilience in our system to shocks.  At the same time, we need to reduce agricultural greenhouse gas emissions, we need to replace fossil fuels and we need to rethink waste.  Those six there really stood out as we looked at different platforms this was the scorecard that we used against them.

(New slide – Resolution – There are opportunities to build a more circular economy in New Zealand’s bioeconomy – diagram showing what are the opportunities to build a more circular economy and data, data referenced is at the bottom of the page)

The whole project that we are looking at is about a bioeconomy and making that bioeconomy and ultimately making a circular bioeconomy, those two bioeconomies are closely linked.   There are opportunities to build a more circular economy in New Zealand’s bioeconomy.  This is a diagram that the European Parliament came up with, what you are trying to do is miminise the amount of residual waste in your system and reuse products on the way through.

(New slide – The screening process – 02 – Lists:  Sources, Stage 1, Stage 11, and Stage 111 – Tim Morris and Virginia Wilkinson are in a box on the bottom right-hand corner)

Virginia Wilkinson

So, what did we do?  What was the screening process?  

(New slide - The project used a multi-stage screening process to identify the bioeconomy platforms – show a diagram which outlines the pool of biomass production and processing systems suited to New Zealand – shows our universe vs the hypothetical universe – identifies the source for the diagram as being Coriolis analysis)

The project used a multi-stage screening process to identify the bioeconomy platforms with the needed desirable characteristics.  Some of those characteristics we were just talking about.  Essentially image a big pool of ideas that goes through a funnel to get the ones that are most attractive falling out the end.  We had to start with Stage 0 looking at all the different sort of products and platforms we have in New Zealand, and they were filtered down to the three priority platforms that we then detailed in more.  

(New slide – Biomass Productions System (1) (eg farming) and Biomass processing systems (2) (eg milling) where addressed separately – diagram showing what biomass productions systems we have (1) and what biomass processing systems we have (2) with detail and a quote at the bottom of the page and data used, referenced at the bottom of the page.  Tim Morris and Virginia Wilkinson are in a box at the bottom right-hand corner of the screen)

What we then found is that we have two different systems and two different ways we had to look at it.  One was the biomass production system, so that is the agriculture, silver culture, the aquaculture, what we are producing eg farming and then be biomass systems ie what are we milling or killing or cutting up etc.  We looked at it separately and then feed into this into this funnel.

(New slide – The one hundred:   Production and Processing system – list all the production and processing systems in two separate tables)

When we then when we looked through the 100 process we divided then and looked at them in separate ways.  We looked at what was in the production system, we looked at a land-based system and then in a water-based system, and then in the processing system we looked at these in a slightly different way, as how do they better support the outcomes from existing uses of biomasses which is the wood, the wool, health and home etc.  We looked at how to support better farm inputs, so the feed, fertilizers, pesticides etc. Then number three was how do we begin to transition away from the fossil fuels, looking at alternatives such as replacements for coal, petrol, natural gas, plastics etc. 

(New slide – New Zealand forestry is dominated by Monterey pine/radiata – shows a table re the preliminary identification of biomass productions systems:  Forestry)

As an example, here.

Tim Morris

New Zealand forestry is dominated by moneterey pine or also known as pinus radiata, so this is an example of how we looked at this at a very high level.  We obviously have the major industries that produce a lot of moneterey pine, manuka and kānuka with secondary products douglas fir, cypress, other soft woods, and eucalyptus.  There are other products that have been tried or people are playing around with.  We have things that are at hobby scale native species with a wide number of native species that are selectively harvested or not at all. Then there are products that are produced globally but are not farmed in New Zealand.

(New slide – Forestry Screen example – Three forestry system emerged with “Screen 0” with a table titled ‘Screen O is it large and/or growing?  Relative scoring of identified systems.  A table sets out the scoring with Tim Morris and Virginia Wilkinson in a box in the bottom right-hand corner)

Within forestry, we identified everything in the universe and then we took them and scored them against screen 0 that we did not originally plan to do screen 0 but realised that we needed to do it because we needed to get down to a shortlist of 100 from what was effectively everything possible on earth. With forestry we did a quick screen and what came out of that was mānuka, moneterey pine aka pinus radiata and eucalyptus came through that first screen.   

(New slide – Manuka – shows the scorecard process and breakdown of scores, the one-page profile and the overall score of 38/50 with Tim Morris and Virginia Wilkinson in a box on the bottom right-hand corner)

Here is an example of manuka, so the highest scoring one here in screen 0 and what we tried to do here was devise a one page profile of the platform that we were going to look at, so manuka, so we looked at the scorecard and that is what we talked about earlier, about increasing the biomass, increasing the value-add and scored it terms of 0-4 stars on those and this one gets and 18/24, which met the requirements of our bioeconomy in the future.  We looked at the demand side and what is the market situation, what are the drivers of growth of this, we looked at the supply site in New Zealand and what are the leverageable New Zealand factors, what are the sources of value creation in terms of, how do we create more value in this space?  We have what you would need to believe which is really some of the challenges that may exist within it or what you would need to understand if you wanted to invest in this sector.  Linkages to other value chains nothing as they say no man is an island, no product is an island.  All the products that we looked at linked in with other products manuka as a forestry crop links into honeybees, it links into producing manuka honey, it links into oils and can be used as a bioenergy source, and it also feeds into nutraceuticals.  All of that then together, we put together an evaluator pitch around it and putting a positive story forward for manuka and then a total score and this is now the stage 1 score, and it gets 38/50.  It scores well.

(New slide – There are three broad and interrelated objectives for biomass processing systems in the shift to a more bioeconomy.  Breakdown table - 1:  Support better outcomes from existing uses of biomass; 2:  Support better farm efforts; 3:  Begin the transition away from fossil fuels)

(New slide - Four post farmgate consumer FCMG/CPG, health and home processing platforms emerged from screen 0 – table setting out these – acronym for FCMG/CPG is referenced at the bottom of the page)

Virginia Wilkinson

We looked at the processing as an example and there are four post farmgate consumer FCMG/CPG, health and home processing platforms emerged from screen 0.

Tim Morris

We used different criteria in home processing than we did in primary production.

(New slide – Cosmetics and Toiletries Manufacturing shows the scorecard process and breakdown of scores, the one-page profile and the overall score of 40/50 with Tim Morris and Virginia Wilkinson in a box on the bottom of the slide in the middle)

Virginia Wilkinson

Then if we do similar one to the manuka one and we look at cosmetics and toiletries manufacturing, so the processing, this is a similar type of page, but a different scorecard.

(New slide - Platforms were scored in both of those processes for being both (A) attractive opportunities and (B) moving the bioeconomy forward – shows a table of what emerged into Stage II with Tim Morris and Virginia Wilkinson at the bottom in the left-hand corner)

Tim Morris

Platforms were scored in both of those processes for being both attractive growth opportunities and moving the bioeconomy forward, so, question 1 - was is this an attractive growth opportunity?  Would you invest your grandmother’s money in it?  Question 2 - is it moving New Zealand towards the bioeconomy of the future?  There were products like bottled water, which is an attractive growth opportunity, but it is not really inline which what we are trying to achieve with the bioeconomy of the future.  There are other products that are moving New Zealand towards the bioeconomy of the future that were not that attractive as investment platforms, pesticides, herbicides, sweet potato aka kumara might be one of those and then there were products at the intersection of both of those like sports products, sports nutrition, native botanicals, and essential oils. 

Virginia Wilkinson

All the products in the top blue section moved into the Stage II where they were further assessed.

(New slide – Heading is Coriolis and Ministry of Business, Innovation, and Employment; 30 Opportunities – Emerging and Future Platforms in New Zealand’s bioeconomy – picture shows Mt Taranaki and a power plant at the bottom of Mt Taranaki surrounded by farm pasture.  Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Tim Morris

That is a very brief overview of the first document but obviously there is an incredible amount of detail in that document.  We will now move on to the Thirty Opportunities document, so in the screening process we had to go from 100 to 30.  What happens in this document is all of the Thirty opportunities are developed in more detail.  We are going to go through one of those in detail.

(New slide - the 30 that were identified and emerged as the high scoring products from Stage I into Stage II are spread across a wide range of systems, products, processes, and categories.  The table lists the 30 opportunities and Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

The 30 that were identified and emerged as the high scoring products from Stage I into Stage II, the ones we showed on the page prior but here they are.  There is a range of forestry-based products, a range of water-based products, land-based products, wood, health and beauty, household, beverages, construction etc and in many ways this is a government project and everyone when home with a prize.  There is a good range of products here, there is a good range of platforms here, and all of these have opportunities for the future for New Zealand.  

(New slide – Essential Oils Manufacturing/Distilling shows the scorecard process and breakdown of scores, the one-page profile and the overall score of 39/50 with Tim Morris and Virginia Wilkinson in a box on the bottom left-hand corner)

We are going to talk about one of the 30 in detail just give you a feel about how the process works.  We are looking at Essential Oils Manufacturing/Distilling.

(New slide – The platform scales up potential oil production from a local biomass to a supplier-wide range of further processes – why do we care – table set out below into three categories: situation/complication/resolution – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Virginia Wilkinson

Essentially this platform scales up potential oil production from a local biomass to a supplier-wide range of further processes.  This is just an example of what we did for all of the 30 platforms.  We did the situation, the complication, and the resolution.

(New slide - Conceptually this operation extracts the oils from leaves and flowers to make essential oils for food, household, cosmetics, and health products – what is the concept?  Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Tim Morris

Conceptually this operation extracts the oils from leaves and flowers to make essential oils for food, household, cosmetics, and health sectors.

(New slide - Essential oils are a critical core middle step to a wide range of platforms in the bioeconomy – what are the current and potential linkages into the wider New Zealand bioeconomy? Table outlining the current and potential linkages – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Virginia Wilkinson

Essential oils are a critical core middle step to a wide range of platforms in the bioeconomy.  What we did here for each of the 30 platforms we looked at what are the main production system that can feed into it, what is the biomass handling, say the primary and sometimes the secondary processing system ie in this case the essential oil extraction and then what does that then enable and what does it feed into, like a wide range of other sectors, like Tim said before, no product is an island on its own, it feeds into multiple other products.

(New slide - New Zealand biomaterials are a key ingredient in a range of essential oils (often blended or added to a carrier oil).  What can you do with it? – Lists the uses for essential oils – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Tim Morris

New Zealand biomaterials are a key ingredient in a range of essential oils (often blended or added to a carrier oil).  What can you do with essential oils?   What are the things they flow into?  They flow into a huge amount of thing in your house today.  Things like aromatherapy, air freshener, cosmetics, candles, medicinal oil, skin health, perfume, food ingredient etc. 

(New slide – Essential oils are in line with the direction for the bioeconomy – how does this platform support a better future?  Table sets out the six indicators the platform can support a better future – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Virginia Wilkinson

Essential oils are in line with the desired direction for the bioeconomy.  We are looking at these are the same six indicators we looked at earlier, for each of them we reviewed, for example, the increasing value-add.  They are obviously a high-value output.  They are an ingredient with high-value products that are being given to other high-value products. It is a win-win here. 

(New slide - Essential oil production can be part of a wider circular system.  What are the opportunities to build a more circular economy – diagram set this out with data, data reference at the bottom of the page)

Essential oil production can be part of a wider circular system. In this example, this is an example of how the essential oil goes into the circular economy.  Obviously we can get high yields, we can use regenerative practices, and then through sustainable design with low packaging per kilo, we can use modern plant and equipment, especially easier at the beginning of a process, we can have potential for alternative energy sources, we can have reverse supply chain and we can convert used waste into alternative sources of energy ie the idea being that everything goes back in and stays within the system to and can be used again.

(New slide – Essential oil firms located across New Zealand – shows on a map of New Zealand where the essential oil firms are located and notes that they used selected firms only – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Tim Morris

The essential oil firms, when we went and had a look, are located across New Zealand.

(New slide - There is also a wide range of other current and potential stakeholders that would be interested in the opportunity to grow this platform – how are some of the current/potential stakeholders in this opportunity – four tables list the stakeholders and data, data reference at the bottom of the page)

Virginia Wilkinson

There is also a wide range of other current and potential stakeholders that would be interested in the opportunity to grow this platform. 

(New slide - There is a range of strong economic arguments for this platform being a growth opportunity going forward – Why this platform – five reasons – diagram list the five reasons and information surrounding the reasons – Tim Morris and Virginia Wilkinson are just up slightly from the bottom of the left-hand corner)

There is a range of strong economic arguments for this platform, why this platform, why are we looking at it?  Obviously, it is an important ingredient.  It is a high-value output, which we mentioned earlier.  It has proven capability with people investing in the sector.  It is an extensible platform in that it can be made into a range of ingredients, perfumes etc.  It has a big opportunity for import substitution.

(New slide – Improvements are required to get the platform growth ready – Is the platform growth ready?  What are the execution gaps?  Diagram broken into four quadrants listing collective efforts, clear customer and markets, competitive biomass and competitive logistics and primary processing – Tim Morris and Virginia Wilkinson are 2/3 of way up slide on left-hand side)

Tim Morris

Improvements are required, it is not perfect. The essential oils is a great sector and there is interest in companies doing things, but for all of these 30 identified, is this platform growth ready, where are the execution gaps?  What do we need to do to get this thing really humming?  We looked across a range of common metrics across all of the sectors and essentials oils is doing well in some areas and not so well in others as a guideline.

(New slide – an independent investor might ask four broad questions – what are the key questions an independent investor would ask?  Questions listed in the slide with further detail – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Coming from the point of view of an investor, and any sector that is going to grow will need investment.  A piece of work we did a while ago showed that for every dollar of exports at the border you probably need something like $2-3 behind the border to support that goal. If we want to grow essential oils, we are going to need to attract investment to the sector.  What are the questions an investor might ask about essential oils.  As an example, would be the different questions we give for all of the 30 opportunity platforms.  As an example, would be how would New Zealand manuka compete with Australian tee tree oil? Another one would be how would you enter a mature global market? Essential oils is a well-developed market with firms already at scale.  I won’t go through all of these now that is a teaser for what is there.

(New slide – Essential Oils Manufacturing/Distilling – sets out research done by Tuia Group giving a Māori perspective - Tim Morris and Virginia Wilkinson are in the bottom left-hand corner)

Virginia Wilkinson

We asked one of our partners, the Tuia Group to put together some pages on all of these 30 platforms giving us a Māori perspective.  Looking at how attractive it is across some of the key indicators that are most important to Māori and then giving it a scorecard and overall attractiveness score.

(New slide – Three broad categories of investment are highlighted – investing in scaling up farming systems; investing in increasing processing capacity and investing in developing specialised products – breakdown underneath each heading – Tim Morris and Virginia Wilkinson are in the bottom left-hand corner)

Tim Morris

Three broad categories of investment are highlighted for all of the 30 platforms but in the essential oils for example, the question is where is the investment required?  We first paint a brief vision; New Zealand growers and producers will wake up to the incredible opportunity presented by essential oils made from unique New Zealand flora.  What investment is needed?  We need to invest in scaling up farming systems. We need to invest in increasing processing capability. We need to invest in developing specialised products.

(New slide – Three deep dives completed in Stage III of the project – lists all six reports but three I the middle are highlighted – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Virginia Wilkinson

That was just a brief run through of the essential oils Stage II level.

We now have a quick overview of the format that we had of each of the Stage III deep dives for sports nutrition, biocosmetics and marine bioactives.

Tim Morris

These have emerged from Stage II, partly in conjunction with our client are the ones to take forward, it was not a numeric process it was a joint decision with the advisory group.

(New slide - Heading is Coriolis and Ministry of Business, Innovation, and Employment; Marine Bioactives for New Zealand – supporting investment in the emerging marine bioactives platform – picture shows ocean and waves.  Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Virginia Wilkinson

First, Marine Bioactives from New Zealand.

(New slide – table of contents – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Essentially with this one each of them has a slightly different format because they are a different industry/different product.  With this one it was essentially what are they, a definition around what it is, what do we have as a resource to contribute to marine bioactives?  Then we looked at specifically at our largest resources which is mussels, then fish oil, marine collagen, which is a growing area for New Zealand.  Then we looked at the smaller and more emerging marine bioactives.   We then looked at strategic themes across these bioactives.   We then applied circular framework to it in terms of the circular economy and then at the end we looked at what is the situation in New Zealand.  What is happening with growth etc?  Then who are firms, who is investing, who is doing what and then just itemising at the back and profiling each of the selected firms that are in the industry. 

(New slide – What are bioactives?  Bioactives typically extracted from living organisms that produce and effect in other living organisms – six quotes are listed)

What are they?  Bioactive food components are physiologically active constituents in food or dietary supplements derived from both animal or plant sources.  Essentially, they have to be added to something else which causes an in effect. 

(New slide - New Zealand wild capture production peaked in 1997-1998 and has been trending since as quotas put in place to maintain stock – graph showing lows and peaks and data, data reference on the bottom line)

One of the main reasons we looked at marine bioactives is that it is a great example of adding value to an existing biomass. New Zealand wild capture production peaked in 1997-1998 and has been trending down since as quotas are reduced to maintain stock.  Marine bioactives is using marine resources but one of the challenges here is the amount of marine resources we are taking out of the ocean, for very good and sustainable reasons, it is decreasing.

(New slide – New Zealand aquaculture production has grown to around 2004, but growth has stalled since, all new species attempted in the last 50 years have failed – graph with data, data references on the bottom line – Tim Morris and Virginia Wilkinson are in the bottom left-hand corner)

Turning to aquaculture production, New Zealand aquaculture production has grown to around and up to 2004, growth has stalled since and all new species attempted in the last 50 years have failed.

Virginia Wilkinson

Another example showing that we need to add more new value to this resource. 

(New slide – Prices are up for traditional mussel products, down for powers but very high for mussel oils – three charts showing the average export price for mussel, powder, and mussel oil – data references on bottom line – Tim Morris and Virginia Wilkinson are bottom right-hand corner)

New Zealand Mussel export prices if we look at it by form, the live mussel, the price goes up frozen meat at $10 per kilo, powder has been declining over time but sitting around just over $40 per kilo and if we look at oil, it is sitting at around $2000 per kilo. We can see that we are certainly adding value with the oil.

(New slide - Numerous brands now sell green shell mussel oil, that product comes in a range of concentrations (of the lipid fraction) – photos of the numerous brands that sell green shell mussel – Tim Morris and Virginia Wilkinson bottom left-hand corner)

Tim Morris

Numerous brands now sell green shell mussel oil, that product comes in a range of concentrations (of the lipid fraction).

(New slide - Antler Farms’ New Zealand fish oil, is an excellent example of a product making clear, strong product claims – photo with examples of how fish oil is marketed – with link to Antler website on bottom line – Tim Morris and Virginia Wilkinson on bottom right-hand corner)

Virginia Wilkinson

Then we have this example of the fish oil shows, Antler Farms, is an excellent example of a product making clear, strong product claims. They are making lots of claims around their product on their website.

(New slide – a large and growing number of marine collagen products are made by New Zealand firms, with most being sourced from New Zealand waters – photo of marine collagen products – Tim Morris and Virginia Wilkinson are in the bottom left-hand corner)

Marine collagen we have had a lot of new firms come into this space and we are now producing a lot of our own marine collagen.

(New slide - Beyond the top three products there is a wide range of smaller or emerging marine bioactives – photo of the smaller or emerging bioactives – link to website on bottom line of slide)

Beyond the top three products there is a wide range of smaller or emerging marine bioactives.  Krill oil we are now producing our own here and shark liver oil are now being produced in New Zealand, Abalone, Oyster, Sea Cucumber and Chitosan.

(New slide – six broad strategic themes are driving the growth of the New Zealand marine bioactives platform – diagram showing the six them – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Tim Morris

Six broader themes are driving the growth of New Zealand’s bioactive platforms.   We are seeing firms investing and we are seeing branding and trademarking their product, we are seeing the emergence of measurable standards, we are seeing more around the efficacy and science, we are seeing improved marketing and a big push for sustainability.

Virginia Wilkinson

This report goes to great examples of a lot of these and how they are procuring their brands.

(New slide - Heading is Coriolis and Ministry of Business, innovation and Employment, Creating Beauty from New Zealand – supporting investment in the emerging natural or bio-based cosmetic platform – picture manuka tree in blossom.  Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Tim Morris

Turning now to Biocosmetics, we do a few pages from the Biocosmetics Report.

(New slide - Four broad investment themes exist for driving growth in value, particularly in export growth, in the New Zealand’s cosmetics industry – table listing the four broad investment themes with data underneath – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner and there is a statement on the bottom line)

Four broad investment themes exist for driving growth in value, particularly in export growth, in the New Zealand’s cosmetics industry.  What are those themes?  We need to grow production efficiencies.  We need to drive supply chain efficiencies.  We need to improve sales and marketing.  We need to increase product innovation. 

(New slide - The cosmetic, toiletries and fragrances (CTF) industry has shown solid, strong, long-term growth, the industry is surprisingly resilient to the economic cycle – two graphs showing the cosmetic, toiletries and fragrance (CTF) market and data, reference date links on the bottom of the slide – Tim Morris and Virginia Wilkinson on bottom left-hand corner)

The cosmetic, toiletries and fragrances (CTF) industry has shown solid, strong, long-term growth, the industry is surprisingly resilient to the economic cycle. You would think that cosmetics, toiletries, and fragrances would be the first thing that people cut back on in an economic downturn, but it is really not the case and is surprisingly robust through time.  The main outlier here is COVID where people were working from home. 

(New slide - New Zealand produces six broad type of cosmetic products – six photos listing the various types of cosmetic products – with details underneath – Tim Morris and Virginia Wilkinson are bottom right-hand corner)

New Zealand produces six broad types of cosmetic products. To summarise at a high-level, these are face creams, face serums, scrubs/masks, body lotions, sunblock, and makeup.

(New slide - Antipodes was one of the many cosmetic firms bringing together the key elements of the emerging New Zealand cosmetics story – example of Antipodes using the key elements of the New Zealand cosmetic story – diagram and photos – Tim Morris and Virginia Wilkinson are in the bottom left-hand corner)

Virginia Wilkinson

We looked through each different themes and Antipodes was one of the many cosmetic firms bringing together the key elements of the emerging New Zealand cosmetics story.  For each of these points here, the unique environment, the hero ingredients, innovation, circular and sustainable, and ethical.   We then built those out into their own sections giving great examples of what the New Zealand firms have done. 

(New slide – New Zealand cosmetic firm are attractive targets; extensive acquisition and investment are occurring, particularly by Asian and Australia firms – list the acquirer, target, and details – Tim Morris and Virginia Wilkinson are in the bottom right-hand screen)

In the next sections, in all of the three reports, we looked at some of the activities, as in this particular chart where some of the international acquirers are buying into the New Zealand market.

(New slide - Heading is Coriolis and Ministry of Business, innovation and Employment, Creating Strength from New Zealand – supporting investment in the emerging sports nutrition and weight management platform – picture person doing yoga in the hills overlooking fiord below.  Tim Morris and Virginia Wilkinson are in the bottom left-hand corner)

Tim Morris

Turning now to Sports Nutrition, the third of the three reports, and again we are just giving you a teaser of all of these.

Virginia Wilkinson         

Another example of adding value to some of our existing bioresources and biomass. 

(New slide - The Sports nutrition and weight management industry has shown solid, long-term growth, the industry is surprisingly resilient – one graph showing USA vs Rest of the World from 1990 – 2022 – Tim Morris and Virginia Wilkinson two-thirds of way up page on left-hand side)

Tim Morris

The Sports nutrition and weight management industry has shown solid, long-term growth, the industry is surprisingly resilient, like cosmetics, to the economic cycle.

(New slide – Each of these five segments of this industry have distinct need and, as a result, different firms targeting them – table setting out five segments and details below)

Five segments of this industry have distinct customers with distinct needs and, as a result, different firms targeting them.  These are the classic weightlifting muscle building when they think of sports nutrition.  Then you get into the products targeting professional sports people who are often worried about banned substances and being substance free.  Then there are gym members and what we call weekend warriors, then there are the people who are more the aspirational or healthy life stylers and then there are people who are looking for meal replacement and weight management type products.  Each of the five segments have distinct customers with distinct needs.

(New slide – New Zealand has a large and growing group of brands focussed on aspirational and healthy lifestyle consumers – photo examples of brands with a statement at the bottom – Tim Morris and Virginia Wilkinson at bottom left-hand corner)

Virginia Wilkinson

This is an example of aspirational and healthy life stylers, and we have a number of growing brands across this space, and this is just an example of some of them. 

(New slide – Backing up these companies are a large number of firms that participate across the sports nutrition and weight management supply chain – listed are the dairy processors, specialist ingredients and manufacturer/blender – Tim Morris and Virginia Wilkinson are in the bottom left-hand corner)

One of the other ways we look, we look at the supply chain here is looking at who participates across the supply chain, so, the is obviously a lot of dairy processes moving into specialist ingredients, importers and then a lot of manufacturers and blenders, contract manufacturers and a lot of brand only which have been manufactured by others which are then being exported or just supplied to the local market.

(New slide - Heading is Coriolis and Ministry of Business, Innovation, and Employment; New Zealand Situation and Capabilities – emerging and future platforms in New Zealand’s bioeconomy – picture person looking at sheep down to the water with hills surrounding.  Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Tim Morris

Moving on to the 6^th document, even though we have been running through these very quickly, we had a look at a high-level at the situation in our major various streams and our capabilities. 

(New slide – Document structure/Table of contents – Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

Broadly speaking this document is somewhat of an appendix with a fancy cover in some ways.  We look at first the available bioresources and in-sector capabilities.   What do we have to work with?  We look at aquaculture, forestry, arable crops, wine/grapes, etc and look at what is going on in each of those.  We then look at the supporting capabilities around that which we defined as smart people, good ideas and useful capital and then finally we talk about why it is so hard to develop new platforms. 

(New slide – Falling allowable capture and growing economies of scale have led to falling commercial vessel numbers; landed tonnes/vessels has been growing – two graphs showing registered fishing vessels and tonnes landed)

As an example, this is a page out of the seafood sector where we look at the number of registered fishing boats so that has surged and then it has been declining, so we see that there is an increasing productivity in average tonnes landed per vessel. 

(New slide – The New Zealand seafood industry has capabilities in place across the supply chain – list of New Zealand capabilities by supply chain for seafood - Tim Morris and Virginia Wilkinson are in the bottom right-hand corner)

New Zealand seafood, so just touching on seafood to get a feel for what is in this document.  New Zealand seafood has capabilities across the supply chain.  We have got a strong and well-developed seafood, so wild catch and aquaculture industry with a large number of players.

(New slide – Three board capabilities are required to support the functioning market bioeconomy of the future – diagram showing the three board capabilities with comments – Tim Morris and Virginia Wilkinson are in the bottom left-hand corner of the slide)

Turning now to capabilities, this is just a brief teaser on situation looking at the wider capabilities, as I said before the core of this that you have to have a functioning market bioeconomy, then around that we as a wider society, as government, we need smart people, good ideas and useful capital to push on that. 

(New slide – Industry and Government can influence the drivers of an internationally competitive bioeconomy – table listing drivers of an internationally competitive bioeconomy – Tim Morris and Virginia Wilkinson are at the bottom left-hand side of the slide)

Turning to driving growth or change, what are the drivers of an internationally competitive bioeconomy?  This comes out of some work we did in Australia a few years ago but you have got to have available resources, you have land, water labour and inputs.  You then have to be able to produce biomass, process it, handle it, and have access to markets.  The Government often talks about this, but it cannot drive the core of it, that is driven by industry. 

(New slide – The project resulted in a suite of six related reports – list each report with a photo and title of each report on the slide)

That wraps up the presentation and where we are.  We have gone through a lot of material, as I said 1300 pages of material is there and this is just acting as a teaser, and I hope it encourages you to dive into the documents that interest you.  Some audiences may be interested in some documents and audiences may be interested in others.  Thank you for taking the time to listen to us and if you have got any questions or observations, complaints or comments please contact us, we always love to talk about our work.  Thank you.