Early stage functional food companies can gain significant operational advantages from basing all or part of their activities in New Zealand, says Howard Moore of New Zealand-based venture firm, BioPacificVentures.
By taking advantage of the lower cost of doing business, a positive entrepreneurial climate, world-class scientific personnel and research institutions, and access to venture capital, firms can potentially advance their companies more successfully through the early stages of growth.
Moore is an executive director of the NZ$100 million BioPacificVentures fund formed in 2005 to invest exclusively in life sciences with a focus on prevention, nutrition and agbiotech.
“Scientists say it’s logic. Business people call it common sense. Whatever it is, locating your business where there are strategic and competitive advantages is fundamental to its success,” Moore says.
“Here at BioPacificVentures we are tapping into a huge bank of knowledge and expertise and bringing it to bear on our (BioPacificVentures’) sweet-spot in nutrition and health.
“With our region’s strengths in world class innovation and scale in agriculture and food processing, what better place to in the world to locate new ventures in this sector?” he asks.
Moore, who is no stranger to North America, is attending IFT 2006 in Orlando in June and is keen to meet with entrepreneurs who are interested to hear more about the benefits of relocating part or all of their operations to New Zealand.
“The food, agriculture and health expertise available in our part of the world is second to none and the agriculture and food processing markets are mature.
“Given these facts, we see there are excellent reasons for functional food early stage companies in America and Europe to consider locating some or all of their activities in New Zealand”
Moore says New Zealand and Australia have a concentration of expertise and leadership in nutrition, health and agbiotech areas and the sector that illustrates this more than any other is the dairy industry.
“New Zealand is a leader and dominant player in the international trade of dairy products and has been for more than 120 years. So if you’re developing a functional food based on dairy – or technology to service dairy production – there is logic in being where there is such a concentration of development activity.”
Moore says that, BioPacificVentures is in its early investment stage so he is on the look-out for start up companies that can relocate from North America or Europe to New Zealand.
“Or, alternatively they may wish to relocate only part of their operations – say manufacturing – and take advantage of the clean green, disease-free status of New Zealand agriculture.
“And because of the maturity of the food and agri industries down-under, New Zealand can also offer high quality scientists, technologists and extensive experience in the commercialization of these types of products.”
Moore also says development costs are lower, with product development costs in New Zealand about half of those in North America.
“We have a significant fund and we’re looking to make investments typically in the range of US$3m to $6m or more in special cases. Of course we’ll also look at co-investing with partners.”
Moore says there are precedents for such alignments with a U.S. company producing all its hyper-immune milk in New Zealand for sale in Asia and USA.
“The product is primarily an ingredient with anti-inflammatory properties and also seems to have cholesterol-lowering abilities. It has recently achieved GRAS status in the US and can be marketed there now.”
Moore says this is an example of why it makes sense for a company, if not to totally relocate to New Zealand, to at least base its research or manufacturing operations there.
“Another example we would consider investing in is where a business has a need to develop, manufacture and market a functional food product based on extracted bioactives from the primary food products that New Zealand is well known for – such as green lipped mussels and other marine products, milk and dairy by-products, apples, blackcurrants, kiwifruit and many other fruit and crops.” he says.
“New Zealand has a lot of skills in developing the science for the extraction of natural bioactives and the process engineering and technology for scale up.
“And, there are companies in New Zealand with GMP pharmaceutical operations so there are staff that can be recruited to establish these facilities and there are lots of good science graduates in the area too.
“There are also world class research resources within the Crown Research Institutes (eg Crop & Food, and AgResearch) and universities that relocating companies could consider partnering with.”
Moore says BioPacificVentures has strong networks in food processing, nutrition, agriculture and health in New Zealand and Australia.
“There’s no doubt we can be helpful, open doors, give new entrants a head start, even help with relocation of executives and ease immigration if that’s required. We know our patch.”