Deer Industry News - Deer Industry New Zealand

Market Report
Velvet
As the world’s financial crisis intensifies, major economies are experiencing a strengthening of their currencies through
the repatriation of funds. Though velvet sales to date are still relatively slow, some key importers are hoping that
consumption of velvet will remain similar to last year. After a long process with a lot of hard work by all involved, it was
good to see the first shipment of sliced, branded New Zealand velvet exported to Korea.
Currency
Over the past year, the Euro has
strengthened around 20%, USD by
nearer 30%, Chinese RMB by 34%
and Japanese Yen by almost 36%
against the New Zealand dollar (NZD).
During this time, however, the Korean
Won has weakened against the NZD
by 16.5%. This indicates the state of
our main market’s economy.
900
850
800
Korean Won to New Zealand Dollar: 24 Nov 2007 to 24 Nov 2008
Korea
750
• With the huge volatility in the
currency and the weak world
economic situation, importers have
been slow to commit to larger
700
velvet volumes to date. Reports
from other industries such as wine
and green-lipped mussels show
a similar stagnation in Korea,
650
although some importers are
relatively positive that demand for
velvet by consumers may hold firm.
• After many months and hard work by various organisations,
the inaugural shipment of sliced velvet from New Zealand
to Korea took place. The consignment went through the
customs channels smoothly. This new product form offers
excellent potential for the industry to add value in New
Zealand. Key benefits for Korean buyers may include tamperevident
packaging ensuring product authenticity, good
traceability systems and security in the knowledge that the
entire consignment has undergone New Zealand’s strict QA
programmes.
• The second round of preparatory talks between New
Zealand and Korean government officials on the potential
Free Trade Agreement occurred late in November. The talks
are designed to set boundaries for the FTA negotiations
scheduled to begin early in 2009. Deer Industry New
Zealand’s Executive met with with chief negotiator Alison
Mann, who wanted to hear about the deer industry’s
interests.
• The Chuseok (Korean Thanksgiving) joint promotional
campaign, which DINZ assisted with, met sales expectations
(see Market Talk on page 33). Sales for BOGO F&D Ltd
continued to grow significantly over the previous quarter.
Since the campaign to market the velvet-enriched drink
Chongmyeongbo, sales growth has been steady, though
the company is uncertain about future targets due to the
economic crisis and anticipates growth may slow in the short
term.
• Plans for the velvet as a vitality food promotion to be held
at the Seoul Millennium Hilton (SMH) were finalised. The
month-long promotion kicked off on 1 December and will
be a focus of the hotel during this period. Promotional
material includes:
– Banners leading to the entrance of the hotel
– Other banner displays set up throughout the hotel
11/24/2007 12/13/2007 1/01/08 01/20/2008 2/08/08 02/27/2008 03/17/2008 4/05/08 04/24/2008 05/13/2008 6/01/08 06/20/2008 7/09/08 07/28/2008 08/16/2008 9/04/08 09/23/2008 10/12/08 10/31/2008 11/19/2008
– Electronic newsletters and website promotion
– Postcard Direct Mail to their database of over 20,000
– General print media advertising.
• The Executive also met with a major food processor to
progress consideration of a product as a next step from
the three year Seoul Hilton promotion. The idea is to
see if it is achievable to turn velvet into a healthy food
product represented on supermarket shelves in Korea (as
with Ginseng). This avenue is at its early stages, with a lot
more work needing to be done before any product can be
commercially realised.
China
• China continues to grow in importance and exports over
the rolling 12 months to the end of September show that
sales into China increased from NZD$3m to $10.5m over the
previous year. This lifted China’s share of New Zealand velvet
(value) to 40% versus Korea’s 52% (down from 67% the
previous year). It is important to note that this velvet is often
re-exported to South Korea.
• Delegates from a large deer-focused province in Northern
China, Heilongjiang, are planning to visit early next year
providing an opportunity for more communication between
the industries. Interactions between New Zealand’s deer
industry and possible relationships with similar industries
in China are aimed at seeking ways to stimulate a lift in
domestic consumption. Another such area is Xifeng (in
Liaoning Province), a county populated with around 350,000
people and a significant focus on deer products.
• Feedback from two further processed marketing companies
in China (pet nutraceuticals and human supplements) on
ongoing joint promotional campaigns is positive:
– The pet marketer reports strong, steady growth in the
Asian market. They have also successfully acquired new
products to strengthen their range.
34
Deer Industry News