Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Velvet prospects sound

26 October 2018



[Photo: NewOrigin]

A New Origin café in Seoul, South Korea


The velvet market during the 2018-19 season is expected to be reasonably stable, with consumption in Asia increasing in line with production growth in New Zealand.

Apart from a brief downward dip in prices two years ago, driven by uncertainty about regulatory changes in China, NZ velvet production and prices have increased for eight years.

Deer Industry NZ (DINZ) Asia manager Rhys Griffiths cautions that this trend cannot continue forever. Also there are always unknowns that could upset the market, such as an escalation in the trade war between China and the United States. But based on all the known factors, he says deer farmers can expect another good year.

“Major velvet exporters and DINZ are working closely together, building demand with major health food companies in Korea. These companies prefer to deal direct with their NZ suppliers and put high value on price stability. It gives them the confidence to invest in product development,” Griffiths says.

Branded health foods based on NZ velvet have transformed the Korean market. Creating a similar product category in China is a priority for the industry

“In contrast, for the commodity traders who still buy two-thirds of NZ velvet, price instability can be a good thing. So despite good prices we are putting a lot of energy into building strong relationships with manufacturers and marketers in our major markets. We are taking control of our own destiny and making the commodity traders less relevant.”

He says 200 tonnes of the expected 725-tonne 2018-19 harvest will go to health food companies selling high value branded products in South Korea – a market segment that didn’t exist 10 years ago.

“Since then, following the lead of the Korean Ginseng Corporation, 30 companies have developed and marketed 73 velvet-based health food products, most of which are enjoying strong consumer demand. Of these, 55 are based on NZ velvet, with the New Zealand provenance strongly promoted,” he says.

New Zealand wants to repeat this success story in China, where – along with Australia – it is the only legitimate source of imported velvet. This valuable status is the result of a Regulated Control Scheme for Deer Velvet Harvest implemented by the Ministry for Primary Industries in August 2017, which set stricter on-farm hygiene, traceability and cool chain standards for velvet.

Griffiths says DINZ has been working with Chinese regulatory agencies to provide a clear pathway for imports of NZ velvet to manufacturers in China.

“Health food marketers in China are very much aware of the success of velvet-based health foods in Korea. But they want to be sure that the velvet they are buying is legitimate and is available in sufficient quantities at stable prices before they invest the large sums needed to develop and market new products,” he says.

Griffiths says it took several years for DINZ and exporters to interest Korean health food manufacturers in developing velvet-based products. It will be the same for China, where DINZ is talking to some firms who are considering whether to take the plunge.

“Over the coming years we expect direct exports to Korean manufacturers to grow, aided by the annual reduction in the Korean tariff on dried NZ velvet. More of the velvet that goes to China will be consumed there and less of it will be re-exported to Korea,” he says.

“In Korea, affluent consumers will be offered NZ velvet-based products in uber-trendy cafes in sophisticated shopping malls. There is nothing in New Zealand that compares with Yuhan Pharmaceuticals New Origin stores, where you can buy an awesome smoothie and then take it through to their apothecary for a matching single-serve health ingredient to sprinkle across. It’s a wonderful fusion of old and new that will normalise NZ velvet as a very high end food ingredient.

“LG (which is known in New Zealand for its electrical appliances) has 22,000 door-to-door sales staff, many of whom are selling healthy food products. They and Lotte, a Korean multinational, are really amping their promotion of NZ velvet products.”

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

CTU 2021 Work Life Survey: COVID And Bullying Hit Workplaces Hard, Huge Support For Increased Sick Leave

New data from the CTU’s annual work life survey shows a snapshot of working people’s experiences and outlook heading out of 2020 and into the new year. Concerningly 42% of respondents cite workplace bullying as an issue in their workplace - a number ... More>>

Smelter: Tiwai Deal Gives Time For Managed Transition

Today’s deal between Meridian and Rio Tinto for the Tiwai smelter to remain open another four years provides time for a managed transition for Southland. “The deal provides welcome certainty to the Southland community by protecting jobs and incomes as the region plans for the future. The Government is committed to working on a managed transition with the local community,” Grant Robertson said. More>>

ALSO:

Economy: Strong Job Ad Performance In Quarter Four

SEEK Quarterly Employment Report data shows a positive q/q performance with a 19% national growth in jobs advertised during Q4 2020, which includes October, November and December. Comparing quarter 4, 2020, with the same quarter in 2019 shows that job ad volumes are 7% lower...More>>

NIWA: 2020 - NZ’s 7th-warmest Year On Record

The nationwide average temperature for 2020, calculated using stations in NIWA’s seven-station temperature series which began in 1909, was 13.24°C (0.63°C above the 1981–2010 annual average). New Zealand’s hottest year on record remains 2016, when... More>>

Quotable Value New Zealand: Property Market Set To Cool From Sizzling To Warm In 2021

Nostradamus himself could not have predicted the strange series of events that befell our world in 2020 – nor the wild trajectory of New Zealand’s property market, which has gone from “doom and gloom” to “boom and Zoom” in record time. Even ... More>>

PriceSpy: Research Reveals How Shopping Behaviours Have Changed This Christmas

According to a new survey* from PriceSpy , almost 50 per cent of Kiwis are looking to shop locally this Christmas in light of Covid-19; The research also found consumers are changing their shopping habits, with one in seven (14 per cent) getting super-organised ... More>>