Thursday, November 30, 2023

Jager backs sheep milk industry

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Can the Zespri business model work for New Zealand’s sheep milking industry? Its former chief executive Lain Jager believes it can.
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Scottie Chapman | November 16, 2020 from GlobalHQ on Vimeo.

If successful, it would transform the industry into a billion-dollar industry that delivered for its farmers, Jager told around 400 people at Spring Sheep Milk Company’s annual open day held on a farm near Cambridge.

Jager is one of Spring Sheep’s directors and is also chair of the Primary Sector Council.

In 2015, Spring Sheep chief executive Scottie Chapman approached Jager about wanting to copy the Zespri model to develop a NZ sheep milking industry.

“That’s a 30-year journey and it’s hugely ambitious,” he said.

Jager’s wife later told him that she believed Chapman could do it and, as a result, came on board as investors in Spring Sheep.

He is also one of Spring Sheep’s directors.

He says sheep milk products sat in in a hugely valuable niche market that was not commoditised in the way that bovine dairy is.

“It’s in the niches where you get sustainable value if you get the opportunity to compete,” he said.

It is a sub-category in the alternative milk sector. 

About $30 billion of the $720bn global dairy sector was the alternative milk market and that was largely dominated by goat milk.

He believed there was a value proposition for sheep milk that would deliver sustainable value to farmers. On the market side, that proposition was around nutrition.

“That’s epitomised in infant formula but it’s not just infant formula,” he said.

There was also scope to scale up the industry given that the dairy goat industry was growing at 16% globally.

“Sheep isn’t the same as a goat, but given that it is coming off a really low base, what it means is that potentially we can grow even faster,” he said.

Driving further value into the value chain will come about from genetic gains, which will see sheep change from milking 200-250 litres to over 400l. This will drive enormous value into that value chain, as will improving the industry’s product mix.

He says success for the sheep milking industry would be to have at least six high-value products including infant formula being sold in the market. Those markets would not just be China in order to decentralise risk.

The bulk of the global sheep milk industry was domestic trade and centred around fresh milk and yoghurt.

Where NZ had an opportunity was around sheep that delivered a high-value nutritional product with all those attributes around the NZ brand.

“That’s our opportunity in New Zealand, to have a really strategic position in what is relatively speaking a small category,” he said.

The industry was also good at supplying China because of its proximity compared to other Northern Hemisphere-based sheep milking countries.

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