Hindsight to Foresight - New Zealand AM-Dan C and Andy Openning... · 14/06/2015 | Andy Macfarlane,...

| 14/06/2015 Andy Macfarlane, Dan Coup

Hindsight to Foresight Where have we come from, where are we heading?


Old Technology


New technology, new opportunity

Entrepreneurs + risk =


INNOVATION

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Message from Minister

14/06/2015 Andy Macfarlane, Dan Coup

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PGP provides not only financial support and expertise

1. Independent panel has endorsed our strategy

2. Agreement that Passion2Profit will create value for

deer industry and New Zealand

Endorsement


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A major strategy review showed that:

1. We were vulnerable to market concentration risk in

both venison and velvet

2. Industry collaboration could improve

3. On-farm performance gains were low, other than

in velvet weights

2010


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Worked towards an industry profit goal that was ambitious but achievable.

2011 - 2012


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Our goal needed to be:

1. Market led

2. Underpinned by alignment between market

requirement and on-farm production capability

3. Enabled by other value chain partners in such

areas as research, logistics, quality control and

processing.

Profitability Goal


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Set ourselves some 10-year targets in 2012:

1. On-farm gains:

• Fawning - Survival to sale 84%

• Carcass weight 61kg

• Kill date - 16 days

• Kg output per hind 51kg

• EBIT/kg venison +$1.48

2. Market gains: +$0.52

+$2.00

Profitability Goal


Or similar

combination

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Fawning

14/06/2015 Presented by Max Müller

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Slaughter date


Chart – Average slaughter date

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Product Weights


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Gains identified in 2012 would come from:

1. Diversified markets

2. Increasing % of chilled exports

3. Differentiation of farmed vs game in key market

segments

4. Improved co-product value chain

Market gains


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An integration strategy:

- pulling the value chain together

Passion2Profit


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Overview…

1. Agreed by DINZ, NZDFA and Venison Marketers

2. $16m investment over 7 years

• ~ $4m farmers, $4m marketers, $8m Crown

3. 50:50 - Marketing and Production

Passion2Profit - refresher


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Passion2Profit - refresher


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“Go-Early” trials and pilots have been crucial to enabling momentum both on-farm and in market now we have official approval

Piloting is crucial


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P2P – On-farm Where have we come from, what’s happening, what’s next…


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An integrated farm systems approach, recognises:

1. Chosen production system

2. Terrain, soils, climate

3. Animal type

4. Staff skills and management preference Accounts for:

1. Feed production options available

2. Growth rates achievable

New ways of thinking

14/06/2015 Andy Macfarlane, Dan coup

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System 1 Farm:

1. High degree of long term pasture

2. Hay and silage used in winter

3. Typically breeding only

4. Low cost structure

Example:


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System 3 Farm:

1. Perennial ryegrass base

2. Supplemented with winter feed crops

3. Some specialist crops, e.g. lucerne or red clover

4. Typically breeding and finishing

5. Animals typically finished in summer

(After the current chilled season)

6. Medium cost structure

Example:


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System 5 Farm:

1. High degree of short-term feed (short-rotation

ryegrass, chicory, red clover, plantain, lucerne,

winter feed crops)

2. Prepared to use concentrate supplements as

well as conserved feed

3. Orientated to finishing

4. Targets high % deer for chilled season

5. High cost structure, high output/Ha

Example:


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1. Better description of farm system intensity

2. Case study examples of how the desired level of

intensity can be achieved

3. Verified feed budgets (modelled, and checked by

farmers using the system)

4. Verified financial budgets

5. Benchmarked to environmental metrics (resource

use efficiency)

6. Framework for research and demonstration

Outputs


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1. Better visibility for farmers on “what system is

best for me”

2. Assist in costing on-farm growth in numbers and

production (for farmers and financiers)

3. Enables better reporting to other stakeholders

(govt environmental, etc)

4. Better visibility of gains from P2P

5. Better targeting of research to where

opportunities can be aligned to market

Outcomes


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P2P – Marketing Delivering greater market returns for venison


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Price relative to game…


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Price relative to beef,

lamb


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Lost value


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Objective


Develop sales outside traditional European game season

1. Sell more chilled…

• Deliver venison to consumers in the form they

value most highly

2. Co-benefits

• Reduce supply pressure on frozen venison

• Reduce storage, financing costs

• Reduce market concentration risk

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How?


Collaboration and support will enable effective market development investment

1. Market development is difficult for any single

venison company

• Risk of free-riders

• Scale of investment required

2. Collaboration, with PGP support, will create

necessary scale of action

• Industry approach (Cervena™) has

advantages

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Where?


Europe and China

1. China is too big an opportunity to ignore

• Has transformed dairy, lamb industries

• Traditional affinity for deer (but not venison)

2. Europe is where we have existing partners

• Customers who understand and care for our

venison

• A niche opportunity

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China


China is very big and very complex and we need to figure out where to start

1. What city/province?

2. What cuisine style/sector?

• Traditional Chinese

• Western style

3. Begin with desktop market research of options

4. Move quickly to small-scale pilots

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Europe


Need to create a new, distinct positioning for spring-summer grilling meat

1. Hirsch, Hertenvlees, Hjorte – are all eaten only in

autumn – so this must be something different

• New name

• New cuisine style

• New consumers

2. We need to understand what selling points will be

most favourable for these new consumers

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A very exciting first step in our collaborative strategy

Netherlands Cervena Pilot


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Netherlands Cervena Pilot


Trialling the appetite for a new concept

1. Five marketing companies have agreed to

experimental pilot launch of Cervena

• Testing market acceptance

• Testing marketing messages

• Assessing volume potential

2. Trial commenced in April

• Two Dutch partners, two suppliers

3. Will be rolled-out to more partners if successful

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DINZ 5-year Strategy Evolution not revolution


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Evolution not revolution


Board in final stages of revising the Nov 2010 strategy in light of:

1. Global market trends

2. NZ farming challenges and opportunities

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Single integrated strategy


A strategy encompassing all deer farming processing and marketing

1. Venison

2. Velvet

3. Co-products

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Strategic Objectives


1. Premium positioning

• For all of our products to be “best in class”

2. Market development and diversification

• Drive new demand and mitigate risk

3. Sustainable on-farm efficiency growth

• Driving long-term alignment with market

4. Cohesive and respected industry

• Ensure strong communication and networks

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Hindsight to Foresight


Hindsight to Foresight - New Zealand AM-Dan C and Andy Openning... · 14/06/2015 | Andy Macfarlane,...

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