TIN’s first ever Agritech Insights Report offers significant analysis of New Zealand’s Agricultural Technology export sector

17 July 2020
Kiwi tech company CEO's attend Lure of the US TIN100 event.
AUCKLAND, 16 July 2020

Technology Investment Network (TIN) has released its first ever NZ Agritech Insights Report, providing compelling analysis of the size and scope of New Zealand’s leading agritech exporter companies, and the pipeline of promising Early Stage agritech companies. This inaugural report, launched at Fieldays Online yesterday, provides a closer look into NZ’s agricultural technology sector based on data from TIN’s 2019 survey results, including size and significance, key export markets, investment challenges and opportunities, along with a comprehensive directory of over 100 early stage Agritech companies currently developing their own IP in New Zealand. Agritech is one of the largest sectors that TIN tracks, and some of the oldest companies in the TIN Report are Agritech firms, with histories going back more than a century.

"If New Zealand is to create a managed plan to grow the Agritech sector, it must firstly look at data that will help understand which companies have already been successful and why”Greg Shanahan - Managing Director, TIN.
TIN has worked closely with the NZ Government’s Industry Transformation Plan (ITP) Taskforce on this Report, providing supplementary information to its Agritech sector plan, set for release next week.

“If New Zealand is to create a managed plan to grow the Agritech sector, it must firstly look at data that will help understand which companies have already been successful and why,” said Greg Shanahan, managing director of TIN. “The aim of the Report is to showcase those companies so that they can be an example and inspiration for others to follow.”

“What’s evident from the Report is that there are some very exciting opportunities that now exist for Agritech to leverage the experience of the wider tech sector. Harnessing high global investment interest in NZ tech companies, while also moving the farming community towards engaging more with this new technology, will not only help Agritech businesses scale faster, but also add value and reduce costs for New Zealand’s primary industries,” added Mr Shanahan.

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Key statistics on the Agritech sector
 (taken from the TIN Agritech Insights Report, and based on 2019 TIN Report data)
  • 10% of TIN200 companies are agritech firms, and together they generated $1.4B in revenue in 2019; 11.6% of the total TIN200 revenue

  • TIN200 Agritech companies generated $37.3m growth; 3.3% of TIN200 growth

  • Total Agritech exports: $803.3m (57.3%)

  • Export growth: $22.9m (2.9%)

  • The US is the largest export market for agritech (24%), followed by Australia (12%)

  • Average sector wage: $91,020 (TIN200 average wage: $82,040)

  • Average revenue per employee: $282,690

  • Invested in Sales and Marketing: $171.4m

  • Invested in R&D: $97.3m

  • Average company age: 31 years (TIN200 average: 29 years)

  • 5-year CAGR: 6.2% (TIN200 5-year CAGR: 8.9%)

  • Nearly 5,000 people employed globally with 57.6% of those in New Zealand (2,852 people)

  • 2019 employment in the sector rose by 6.6% (308 workers), outstripping revenue growth for the same period (2.7%)

  • Auckland is the region with the highest number of Agritech companies (37); followed by Central North Island (24), and Canterbury/Upper South Island (21)

Key Agritech sector insights
 (taken from the TIN Agritech Insights Report, and based on 2019 TIN Report data)
  • 2019 was already a challenging year for the Agritech sector, but profitability remained strong
    As revealed in the 2019 TIN Report, the combined growth of Agritech companies in the TIN200 slowed to 2.3%, the slowest of any secondary sector in that year. Notably, this was down from the 15.0% growth rate in 2018. Despite this slower growth, the profitability of the TIN200 Agritech companies in 2019 was still strong, with a combined EBITDA of 13.2%, up 10.2% from the previous year.

  • High-Tech Manufacturing dominated the sector, but shifts are evident
    High-tech Manufacturing companies in the Agritech sector generated just over two-thirds of the sector’s revenue ($964.6m), with large, long-established companies like Gallagher Group, NDA Group, Compaq Sorting and Tru-Test Group dominating the category. The challenge for the sector is how to rapidly scale High-Tech Manufacturing businesses. However, in this environment, it appears the general focus for new tech companies is shifting towards ICT solutions, reflected in nearly half (47%) of Early Stage companies represented in this report focusing on this area.

  • Agritech as a sector is ripe for transformation – and now is the time for disruption
    In 2019, the 20 top Agritech firms’ investment in Sales & Marketing and R&D was relatively low in comparison to the rest of the TIN200. While this is likely a reflection of the mature nature of the companies and their focus on existing customers and fine-tuning of products, it does also hint that the sector is ripe for transformation. As has been seen in comparable sectors like HealthTech, collaboration will be more crucial than ever if disruption is to take place.

The NZ Agritech Insights Report is the second publication in TIN’s anticipated series of New Zealand technology sub-sector reports, following the publication of the NZ HealthTech Insights Report earlier this year.

The NZ Agritech Insights Report is sponsored by Te Taurapa Tūhono - New Zealand Trade and Enterprise (NZTE), Ministry of Business, Innovation & Employment (MBIE) and Callaghan Innovation. Copies of the Report are available for download here.

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Notes to editors

For further information and interview requests with Greg Shanahan (TIN Managing Director, please contact Kate Dobbin on kdobbin@tinetwork.com or mobile 021 522 103.

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