Three-point plan to add value to NZ lamb exports

Published: Thu 14 Sep 2017 05:23 PM
Media Release September 14, 2017
Three-point plan to add value to NZ lamb exports – new industry report
New Zealand needs to increase investment in value-adding to its lamb exports, in the face of growing competition and changing dynamics in major markets, according to a new industry report.
Maximising the value of New Zealand lamb – the drive for value add, by agricultural banking specialist Rabobank, recommends a three-point plan to be part of value-adding strategy for the sector.
The report, published today, says New Zealand lamb exports are facing increased competition in key markets, from low-cost producers such as Brazil, increased global lamb production and growing consumption of lower-cost animal proteins.
And at the same time, it says, attentiveness to consumer demands in quality, convenience, experience, and health is becoming increasingly important.
Report author, Rabobank animal proteins analyst Blake Holgate says these factors create both a need and an opportunity for the New Zealand lamb industry to compete on the basis of more than just price.
The report identifies a three-point plan Rabobank believes should be part of New Zealand’s value-add strategy – focused on
• ensuring New Zealand lamb is positioned as a premium product
• continuous quality improvement and verification
• building consumer-focused value chains
“In recent years we have seen New Zealand’s meat companies along with industry partnerships like the Red Meat Profit Partnership (RMPP) make significant progress in developing strategies and tools to tackle each of these elements, however, further investment in these elements is required from participants right across the industry to improve lamb returns,” Mr Holgate said.
The report says value can be added at production level – by continuing to improve lamb quality, increasing further processing and carcass utilisation for higher-value products and changing production systems to meet consumer preferences, such as organic and free-range – and by improved marketing and branding.
Premium positioning
In order to position New Zealand lamb as a premium product, the report says, it must deliver a consistently high-quality eating experience, so consumers are willing to pay more because the lamb came from New Zealand.
“This positioning needs to be supported by an effective branding story about New Zealand which should identify and promote attributes about New Zealand lamb that distinguish it from competitors,” Mr Holgate said.
“New Zealand’s 100 per cent grass-fed production system is one attribute that is likely to be central to this as there are particular taste, health, environmental and animal welfare benefits associated with this system that resonate strongly with customers.”
Mr Holgate said the RMPP is currently developing a brand story at an industry-wide level which would help to ensure consumers can quickly and easily understand what it is about New Zealand lamb that makes it a premium product.
“The industry level brand story should not deter individual companies from developing their own brand, however, it is important there is alignment and consistency between the brand stories of individual companies and the overall industry to ensure consumers are clear about what the New Zealand lamb brand stands for.”
Continued quality improvement and verification
The report calls for continued investment in research and technologies that will ensure New Zealand is able to deliver consumers a consistently high-quality product, including research that would allow measurement of key attributes to demonstrate lamb quality.
Mr Holgate said a five-year research project kicked off in 2016 by AgResearch would go a long way to providing such objective quality measurement.
“The work Ag Research is undertaking is undoubtedly a step in the right direction and will allow processors to identify the functional, compositional and structural properties of New Zealand meat products. This information will then allow exporters to back-up marketing claims about the premium quality of their products,” he said.
It is equally as important, Mr Holgate said, that how and where New Zealand lamb was produced could be independently verifiable with robust traceability and accreditation schemes likely to play a vital role in providing this proof to consumers.
“There is evidence that consumers place a value on credible accreditation schemes, and are willing to pay for the assurance they provide,” he said.
“The RMPP’s development of a universal accreditation scheme, Farm Assurance in conjunction with New Zealand’s major processing companies, will help streamline the accreditation process for NZ farmers and is expected to be rolled out by the majority of processors in the 2017/18 season.”
Consumer-focused value chains
New Zealand’s ‘produce-and-then-sell’ mentality needs to be replaced with a value chain that first determines what attributes lamb customers want, and then produces lamb products with those attributes, the report says.
“New Zealand lamb companies are investing more into market research and this will create opportunities to get more detailed customer insights.” Mr Holgate says
“To be effective, this strategy will require closer alignment, and information flows between farmers and processors, so farmers know what to produce, how to produce it and when – and are appropriately incentivised to do so.”
Implications for farmers
Mr Holgate said that in order to reap the potential rewards of value-add strategies, New Zealand’s sheep farmers should ensure they understood the particular strategies employed by meat companies.
“Farmers should be proactively engaging with meat companies so they know the
attributes and qualities these companies require in lambs and then look to identify the company approach that best aligns with their farming operation,” he said.
“They should also ensure they have a good understanding of the requirements of accreditation schemes such as Farm Assurance and the benefits of utilising Farm Collection tools, such as farm IQ, as these are likely to become increasingly important in illustrating to consumers that lamb products are meeting their demands.”
Rabobank Australia & New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.

Next in Business, Science, and Tech

Refinery prepares to repair damaged pipeline
By: Refining NZ
Cassini's grand Saturn finale - Expert Reaction
By: Science Media Centre
Court rejects Cathay unit's retirement age of 55 for pilots
By: BusinessDesk
Judgment: AFFCO NZ Limited v NZ Meat Workers Union
By: NZ Supreme Court
NZ govt agrees on negotiating mandate for upgraded FTA
By: BusinessDesk
Air NZ restricts ticket sales as Auck fuel shortage bite
By: BusinessDesk
MARKET CLOSE: NZ shares up, milk stocks Synlait, A2 gain
By: BusinessDesk
MBIE: Wiri terminal wouldn't have avoided pipeline woes
By: BusinessDesk
UPDATE: NZ Refining, Air NZ shares fall
By: BusinessDesk
NZ Refining says pipeline leak to hit revenue by up to $15m
By: BusinessDesk
Update on Marsden Point pipeline disruption
By: New Zealand Government
Update on Marsden Point pipeline disruption
By: New Zealand Government
Update on Marsden Point pipeline disruption
By: New Zealand Government
Temporary disruption to Marsden Point pipeline
By: New Zealand Government
Freight being shifted off planes as fuel crisis worsens
By: New Zealand Labour Party
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media