Ritchie instrumental in driving positive change for red meat sector

Tim Ritchie came into the Meat Industry Association as CEO at the end of 2007, initially intended to be for an 18 month period, and retired earlier this month over 12 years later. His first task was the planned merger of the processor representative organisation with Meat & Wool, the forerunner of Beef + Lamb NZ, which was strongly promoted by Keith Cooper, then CEO of Silver Fern Farms, and Meat & Wool chairman, Mike Petersen.

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Meat industry performing well under Level 4

Processing is under severe constraints during the lockdown, although, as an essential service, meat companies are working hard to feed New Zealanders and service key export markets. In a newsletter to staff and suppliers, AFFCO states that processing restrictions on maintaining a minimum distance between employees means sheepmeat capacity is running at 50% of normal and beef capacity is close to 65%. This of course comes at the peak of the season, exacerbated by drought in several regions, particularly the top half of the North Island.

Resistance or resilience – which best characterises the red meat sector?

The Red Meat Sector Conference held in Auckland on Monday did not have one single theme, but a series of themes across the day, starting with the question ‘resistance or resilience?’ Past history suggests the answer might most logically be both rather than a choice between the two options.

MIE launches red meat sector plan

Tuesday saw the launch of Meat Industry Excellence’s report Red Meat Sector – Pathways to Long Term Sustainability to a relatively small group of invited attendees in Wellington.

MIE red meat sector report to be launched

Tuesday sees the public release of the Meat Industry Excellence industry study ‘Red Meat Sector – Pathways to Long-Term Sustainability’ at a launch function in Wellington. The study, funded with the assistance of a grant from Beef + Lamb New Zealand, was commissioned in the middle of last year; it was initially due for release by the end of October, but concerns about the robustness of the findings delayed the process.

Future of red meat promotion under threat

Next year’s Commodity Levy Act referendum is one of the factors concentrating meat industry minds on the question of red meat promotional investment. B+LNZ is currently conducting a consultation round with individual meat companies to find out how this critically important, if contentious, topic should be agreed for the benefit of all industry participants.

 

B+LNZ Chief Executive Scott Champion told me it’s too early to make any predictions about the outcome, at least until after completion of the consultation round at the end of September. With the referendum about 12 months away, the process is geared to providing time to gather enough detail for promotional strategy development before taking this out to farmers to test it in advance of the vote.

 

The purpose of the discussions with meat companies is to ensure market expenditure is aligned with what the meat industry wants while enabling B+LNZ to fund its essential activities which must now confront new pressures such as environmental constraints. Any new proposal will also have to satisfy levy payers or risk derailing the success of the referendum, although improved sheep and beef returns if maintained should make a Yes vote more certain.

 

The present mix of promotion funded by the farmer levy includes two main strands – the first is country of origin marketing for lamb in the UK, Europe and North America and for beef in China, Japan, Taiwan and Korea, supplemented by some jointly funded variations that support individual exporter programmes; the second comprises campaigns with matching contributions from participating exporter groups across a range of markets and products.

 

For example since 2011 exporting companies have put $1 million a year into sheepmeat promotion in UK and Europe to supplement B+LNZ’s budgeted expenditure. Equally a group of exporters has shared in a campaign to promote New Zealand grass fed beef in China.

 

This strategy has resulted in a move away from generic mass marketing and advertising to more tightly focused campaigns based on research and analysis. This has reinforced the importance of educating consumers on how to cook beef and lamb. In addition to the website, social media is becoming an increasingly important weapon in reaching the target market.

 

While many years’ brand development investment in the UK has resulted in 90% top of mind consumer recall of New Zealand lamb, research has identified the need for exporters to target consumers closer to the point of purchase because of lamb’s premium price position. A large part of the promotional work in Asia to support New Zealand beef has focused initially on the benefits of grass fed beef – low calorie, low cholesterol and low fat – for the premium restaurant trade as the most effective way to reach consumers.

 

Spending limited funds wisely, whether contributed by farmers or meat exporters, is a crucial issue for New Zealand’s red meat sector, both internationally and domestically. Withdrawal of promotional support as a result of failure to get agreement between meat companies and B+LNZ would effectively mean the industry has chosen to shoot itself in the foot.

 

An immediate issue is whether it will be remotely possible to obtain agreement of all MIA members to contribute funds for the purpose of country of origin promotion and, if so, how much. Of the larger meat companies, Silver Fern Farms’ CEO Keith Cooper has indicated a strong preference for company brand promotion as opposed to the generic alternative. Instead of glossy marketing in traditional markets, he would be prepared to consider some funding for educational promotion in emerging markets. Other companies are still in favour of country of origin New Zealand promotion in specific markets.

 

Since it often seems there’s as much chance of getting an agreed meat industry position as there is of formulating an agreed United Nations resolution on Syria, I suggested to Champion this might be a challenge. However he said he was ‘reasonably optimistic’ of getting an industry agreement.

 

The big question farmers and companies alike must consider is what the long term impact of ceasing all country of origin promotion would be. There will obviously be some changes to the current promotional mix to make better use of available money, otherwise B+LNZ would not be in discussion with the meat companies on developing a promotional strategy that better matches its objectives.

 

The unanswered questions are how much B+LNZ is willing to spend on country of origin promotion as against jointly funded activities and what the companies are willing to contribute to the general rather than individual good.

 

In my opinion the New Zealand brand is an umbrella under which individual company brand activity should function, but it isn’t realistic for any one company to achieve consumer recognition for its brand in one, let alone several, markets without that support.

 

It is obviously important for meat exporters to support their own branded programmes in selected markets, while the New Zealand industry maintains its competitive nature.

 

But levy paying farmers have both an obligation and a right to support their product both in New Zealand and overseas. B+LNZ is farmers’ vehicle for coordinating their investment by investing their levy funds to the best effect. The meat companies have an obligation to reach an agreement which will support this investment constructively. If not the red meat sector will be in danger of completely losing its way.

Beef + Lamb NZ expenditure on overseas promotion under review

Next year sheep and beef farmers will have their five yearly referendum under the Commodity Levies Act when they get to vote on whether they wish to continue funding Beef + Lamb New Zealand as their industry good body.

MIA gives honest assessment of industry challenges

The Meat Industry Association has recently published its 2013 Annual Report which contains an honest assessment of the challenges of the past year and a summary of the positive initiatives under way.

Balance sheets under stress from lower livestock numbers

After the discussions between meat companies, lobbying by MIE, conferences and strategy debates, right now an eerie calm has settled over the meat industry. This is partly due to the mid winter slowdown in processing activity with only bobby calves to get excited about.

Boot Camp stimulates insights and understanding of consumer demand

My readers may be pleasantly surprised that I have decided to return to less contentious topics than my last piece about overseas investment. The downside is that this will be far less provocative and may not give the readers the chance to question my intellect, political leanings and status in society or to accuse me of treason for having the gall to support overseas investment in land.