Agreement sought for new market development plan

Agreement sought for new market development plan for sheepmeat and beef

3 June 2015

Beef + Lamb New Zealand (B+LNZ) believes it’s very close to landing a collaborative marketing entity to promote New Zealand sheepmeat and beef by partnering with meat processing and exporting companies.

B+LNZ Chairman, James Parsons said the organisation had been working intensively with processors and exporters over the last two years to agree a 50:50-funded way of promoting New Zealand sheepmeat and beef and telling the unique ‘country of origin’ story.

“We’re at a point now where there is more agreement than not to collaborate and create a new jointly funded and governed marketing entity to promote our red meat products at home and internationally.”

Parsons said a high level proposal was circulating around the meat processors and with their support, a more detailed business plan would be developed in the coming weeks.

“The 2011 Red Meat Sector Strategy recommended this approach and it’s something Beef + Lamb New Zealand has been pursuing with meat processors since.”

Parsons said farmers were excited about a collaborative market development model and recent UMR research backed that up with 81 per cent saying beef and lamb promotion needed to happen in international markets.

B+LNZ wants the plan to be aspirational, industry-agreed and strategic. It would also span the 2016-2022 B+LNZ Commodity Levy Order cycle and would closely link a baseline New Zealand Inc. or ‘country of origin’ story to support the individual commercial marketing initiatives of meat processors.

“As an industry we under-invest in marketing our sheepmeat and beef products compared to competing exporting countries (see Figure 1) and farmers and meat processors agree there needs to be an ‘all of industry’ response.”

Parsons said it was well known that in a global meat market, New Zealand was considered to be relatively small.

“But we have a story like no other and we can create a preference for our products. When a consumer dines on New Zealand beef or lamb we want the New Zealand story and integrity that sits behind the product to be front of mind.”

Parsons said the marketing activities envisaged would be around creating awareness of, and preference for, New Zealand sheepmeat and beef on the basis of three ‘pillars’: grass-fed, quality (on- and off-farm) and health and wellbeing.

An initial budget of around NZ$7-9M a year, with aspiration to grow - provided value is being created and captured - is being proposed and this would be funded 50:50 by B+LNZ (on behalf of farmers) and meat processors.

“Marketing programmes need to be aligned and integrated with the commercial activities of meat processors and their in-market partners to ensure they and farmers can capture value.

“Feedback from processors is that they want the ability to develop their own brands as well. The power of a joint entity is that by enhancing our strong ‘country of origin’ story, individual processors have a great base to springboard from as they build their own individual brands,” Parsons said.

The process from here involves processors confirming their participation in the model. This will inform what B+LNZ includes in its own levy offer to be put to farmers later this year in its farmer referendum. The referendum enables B+LNZ to continue its work for the period 2016-2022.

“We believe the investment proposition is compelling and targeted surveys of farmers for feedback have been overwhelmingly supportive of the model. We will wait with keen interest to see what the meat industry decides,” Parsons said.

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