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Towards a high skill, high wage, high value economySkills Action Plan for theFood and Beverage Sector

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Food and Beverage Employment

Background

Recent New Zealand economic growth (across all sectors)has been driven by rising employment, with 260,000 morepeople entering the workforce over the past five years.While the numbers of people entering the workforce haveincreased, labour force growth has been in decline. Thismeans that industries are now struggling to recruit skilledstaff and the international market for adequately qualifiedstaff and skilled staff is increasingly competitive.

New Zealand currently has the highest skill shortagesin more than 30 years. Some of these shortages areapparent within the food and beverage sector (eg. chefs,bakers and food technologists).

Over the next 15 years, key factors that will impact thefood and beverage sector, (and other sectors of theeconomy) include:

  • Movement of significant population cohorts (babyblip and baby boomers) into, through and out of theworkforce.
  • Continuing globalisation, both the movement of workand workers internationally.
  • Changing skill requirements and the need to addressthe educational underachievement of many NewZealanders (particularly Maori and Pacific Islandspeople).
  • The evolving nature of work, including a greater varietyof employment arrangements, management styles andworkplace cultures and a more diverse workforce.
  • The accelerating pace of technological changeand innovation and the impact this will have on thestructure of industries and occupations.
  • Changing aspirations, including relative value placedon work, family, and community commitments.
  • Consumers demanding healthy and in some casesmore sophisticated products, which requires anappropriately skilled workforce to deliver suchproducts.

The food and beverage sector needs to start now toresearch, design and implement initiatives that will beneeded to ensure that New Zealand is well placed tocapitalise on labour market opportunities now and inthe future.

Figure 1.

TRANSFORMATION THEME

In order for the food and beverage sector to grow andtransform (towards a high skill, high wage, high valueeconomy), a major shift will need to occur in several partsof the labour market (ie. increased productivity, includingcapacity to innovate through science and technology,reduced skill shortages and increased participationfor those seeking to join the labour force but who arecurrently under-represented), as indicated in figure 1.The combination of these factors will change the way wemanage and organise work in the future.

A transformation will only be achieved through the effortsof industry and business organisations, unions and otherorganisations such as education and training providers.Government has a role in supporting and facilitatingchange at the individual business, regional, sector andnational levels.

Key Facts about the Food andBeverage Sector

The food and beverage sector is a major contributor tothe New Zealand economy. In terms of export earnings,the sector recorded $15.4 billion in 2004 compared to $9.3billion in 1994, representing an annual compound growthrate of 5.2% during this period.

In 2005, approximately, one in ten people worked in thesector and it employed 20% of the working population.

The food service sector is the single largest employerin the food industry, followed closely by the food andbeverage manufacturing and food retail sectors.Of the approximately 337,020 people employed in foodand beverage, approximately 25% are involved in primaryproduction, 20% in processing and manufacturing, 30%in wholesaling and retailing and 25% in the food service.

Food and Beverage Employment by Sub-sector:

Graph1. Food and Beverage Employment by Sub-sector:

The food and beverage share of New Zealand employment:

Graph2. The food and beverage share of New Zealand employment:

Some key statistics relating to the food and beverage workforce are outlined below:

  • Wages appear to be relatively low in the primary food sector.
MEDIAN HOURLY EARNINGS BY INDUSTRY, 2004

Graph 3. MEDIAN HOURLY EARNINGS BY INDUSTRY, 2004.

  • A large portion of food and beverage employees haveno or low qualifications (especially in food processingand fishing). This should be balanced with the fact thatsome occupations may not require a highlevel qualification.
QUALIFICATIONS OF FOOD PRODUCTION OCUPATIONAL GROUPS

Graph 4. QUALIFICATIONS OF FOOD PRODUCTION OCUPATIONAL GROUPS.

  • Large number of health and safety issues (especially inmeat processing and livestock farming). Over the pasttwo years health and safety costs have been declining.
FOOD AND BEVERAGE ENTITLEMENT CLAIM NUMBERS

Graph5. FOOD AND BEVERAGE ENTITLEMENT CLAIM NUMBERS.

  • Long hours in some parts of farming (ie. Dairy Farmer,Worker and Sheep Farmer, Worker) and fishing(ie. Fishing Skipper and Fisherperson), comparedwith hours for other parts of food and beverage.
PERCENTAGE OF SELECT FOOD OCUPATIONS WORKING 50 OR MORE HOURS PER WEEK, MARCH 2001

Graph6. PERCENTAGE OF SELECT FOOD OCUPATIONS WORKING 50 OR MORE HOURS PER WEEK, MARCH 2001.

  • An aging population in most food and beverage subsectors with approximately 45% of those in farmingand fruit and crop growing aged 45 years or older in2001. This compares with 35% of the total workforce.
  • Employment locations in the food and beverage sectorin 2003 are more evenly dispersed relative to themanufacturing industry and the economy. The food andbeverage sector has less concentration in the threemain centres of New Zealand. Only 45.1% of FTEs workin one of the three main centres compared to 58.9%for the manufacturing industry and 60.7% for theeconomy as a whole. Food and beverage FTEs are alsomuch higher in Otago and Southland than either themanufacturing industry or the economy as a whole2.

Anecdotal evidence suggests that:

  • On average total jobs filled in food and beverage aresignificantly seasonal in nature compared with non foodand beverage jobs.
  • Food and beverage worker turnover rate is higher thanfor non food and beverage industries.
  • There is significant dependence on immigrants withshort term work permits especially in the seasonalbusinesses (eg. fruit picking).
  • Growing need for ‘top talent’ that can add value toexisting product ranges and technology advances andfulfil challenging new roles most of which are relatedto food health, science, technology and research.
  • Food and beverage consumers are now bettereducated about the benefit of healthy food, impactingon the types of skills needed in the food and beverageworkforce.
  • Increasing need for employers and employees tomaximise productivity gains by adopting new technology(capital investment) and to complement this withimprovements in labour productivity and multi-factorproductivity (ie. the amount of output produced inrelation to inputs of both capital and labour).
  • There is a general perception that food and beveragecareers are not attractive, therefore effectingrecruitment and retention and creating skills shortagesin some key occupations.

2. “Food and Beverage Sector Taskforce (2005) “Discussion Paper on New Zealand’s Foodand Beverage Sector”, Wellington, New Zealand, <http://www.nzte.govt.nz/common/files/fbtaskforce-discussion.pdf>”.

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