Tuesday, April 23, 2024

Diversification paying off for NZ venison

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Series of individual value chains will emerge, says DINZ deputy chair.
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Industry efforts to diversify are paying off with the future of New Zealand venison shaping to be a series of individual value chains.

Deer Industry New Zealand (DINZ) deputy chair Gerard Hickey outlined the latest outlook for venison in his presentation to a meeting of NZ Deer Farmers Association (NZDFA) branch chairs.

His message highlights how venison marketers’ efforts to diversify markets are paying off.

Hickey, also First Light group managing director, said he sees the future for NZ venison involving a series of individual value chains with groups of farmers supplying animals targeting different niches.

Strong demand for chilled venison has seen processors paying up to $10.50 a kilogram for product that will go into the high-value premium market, which is a good start to the season.

“Margins are being made by processors as well and importers are relatively happy, except they can’t get enough product,” Hickey said.

The frozen venison market in Europe is “not so flash and that’s why we can’t be reliant on it”, he told the leaders.

This further underscores the importance of efforts to move away from the commodity market, pivoting to United States retail and emerging markets elsewhere, which the venison marketers agree is the best way to lift producer returns. 

At the end of 2022, exporters had shipped 14% less volume on the year before to the region, with shipments now accounting for 44% of the total.

As the deer industry gets smaller and diversification progresses, it will become more “positively fragmented”, Hickey said.

He sees reduced reliance on the published national schedule, which largely covers product supplied for the commodity market.

What will emerge are individual value chains of smaller groups of farmers supplying customers who want a certain parcel of venison of around 15,000 animals to be economical for market niches that will pay higher prices than the schedule.

Hickey is buoyed by the positive happenings in the US, not only at retail, but foodservice too. 

US retail takes chilled, fresh, trim and leg-based products on a year-round basis, with strong and stable pricing.

Focusing on US retail has already lifted that market’s share of NZ venison to 32% in 2022, up 8% on the previous year.

Additional Sustainable Food and Fibre Futures (SFFF) funding had been sought from the Ministry for Primary Industries, which will be matched in thirds by DINZ and the companies for a concentrated $5 million programme in that market over the next three years.

This investment will enable all five venison companies to develop their own products and brands with DINZ co-ordinating support for the companies’ activities at trade shows, in-store promotions, public relations and social media and market research.

“First Light, for example, might, pick 700 supermarkets on the West Coast, and maybe into Texas and launch our products. 

“We’ve got some ideas about new leg products.”

Sales targets had been included in the SFFF application.

Collectively, the companies aim to lift retail sales of manufacturing-type cuts to 1800 tonnes a year and for sales of new retail items from leg cuts to hit 300t a year by year three of the programme.  

One of the new niches being explored by the marketers is demand for elk, with which US consumers are familiar. 

Some companies have a long history of supplying NZ Elk to their North American customers and others are developing new programmes to meet specific customer requirements.

First Light, Mountain River Venison and Alliance recently launched their own new elk products.

China, already accounting for 24% of exports, and up 6% on the previous year, also provides valuable diversification.

Some DINZ funding has been made available to support marketing activity in the market.

Co-products and edible offal are other valuable products lifting overall returns from venison carcases. 

Co-products including hides, offal, sinews, pizzles and tendons can add $100 to a carcase.

Among the other valuable high-returning niches being explored by marketers for NZ venison are Scandinavia and the Middle East.

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