Europe has its mojo back for venison but pricing caution urged

Anuga 2017
Just one of Anuga 2017's meat halls, packed with customers. The organisers have announced it was the best “in a long time for many of the exhibitors.” Over 7,400 exhibitors from 107 countries showed their wares to the 165,000 trade visitors from 198 countries. There were very big numbers coming out of Eastern Europe who had a very noticeable presence at the show, both as exhibitors and trade visitors,” observed Andy Duncan.

Back from Europe and a visit to the Anuga food trade show, venison exporter Andy Duncan reports, “Europe has got its mojo back,” but urges caution around pricing.

The latest Deer Industry NZ (DINZ) figures show strong demand for both chilled and frozen venison in the region, in part driven by tight supply.

“Early indications are that chilled sales through retail have gone well, despite the higher prices,” says DINZ Passion2Profit (P2P) manager Innes Moffat.

He points to the latest figures from Statistics NZ which show the average FOB value per tonne of chilled venison exported to the top four markets – Germany, the Netherlands, Switzerland and Belgium – lifted by nearly nine percent to $22,440/tonne in the quarter ending 30 September 2017, compared to the previous year.

“Germany was New Zealand’s largest market for chilled over this three-month period” he explains.

Duncan NZ Ltd chief executive and owner Andy Duncan was in Cologne, Germany, in mid-October attending the giant biennial food fair. He says feedback from the market in January will reveal how chilled sales have actually gone, but agreed advance sales have been good so far.

Jared Sandri (left) and Robb Kidd of Duncan NZ experiencing Anuga 2017.

Duncan took the opportunity to introduce two new members of Duncan NZ staff, new marketing executive Jared Sandri and special projects manager Rob Kidd, to contacts at the show. He says it’s a very efficient way to meet a lot of customers in a short time and to have a look at trends. As the 2017 shipments were already on the water, discussions focused on 2017 post-chilled business and looking forward at early 2018.

Compared to the last few Anugas, which were relatively subdued events following the Global Financial Crisis, this year’s show was “seriously busy,” he reports.

“There were very big numbers coming out of Eastern Europe who had a very noticeable presence at the show, both as exhibitors and trade visitors,” observed Duncan.

After an extended quiet period post-GFC he says he was left with no doubt, “that Europe has got its mojo back.”

“It was the first Anuga I’ve been to where I had to spend a lot of time explaining why supply is so short,” says Duncan. But, he got a real sense that the upper limit had been reached for prices.

“European customers are very sophisticated and they understand how a period of deer herd contraction, followed by more recent hind retention, has resulted in product shortages now.”

This has led to premium pricing for New Zealand farmed venison, which, if not already at the maximum level, is close to it,” he says. “We need to be cautious not to push it over the edge.”

Exporters report sharp increases in prices for cuts for manufacturing and middles, but those for leg cuts have not risen as steeply.

Duncan NZ chilled venison
Duncan NZ chilled Cervena packed and ready for customers in Europe

Duncan noticed, for the first time, New Zealand venison selling at a higher price than Roe deer, which usually commands the premium spot. “This is the real indicator of where New Zealand venison is. Wild boar is much cheaper,” he says.

He also believes the volume of New Zealand venison used in the “very price-sensitive” goulash trade could reduce significantly.

“Customers’ needs are for a product that is fit for purpose – goulash, for example, requires cuts suited to long-slow cooking and heavy seasoning. New Zealand farmed venison is not necessarily the perfect fit for this product.”

Likewise, expensive New Zealand farmed venison leg cuts aren’t necessarily the first choice for the further-processed, mid-level catering market, either, which has strict price limits on raw materials he explains.

The quantity of retail/foodservice-ready portion-controlled product is rising in the region, such as Silver Fern Farms’ retail range.

The big advantage for New Zealand venison is its food safety assurance, especially for big retailers conscious of consumer sentiment, says Duncan.

He was pleased to see, 35 years after the start of New Zealand venison farming, that this country is at last making some real progress towards market diversification and a healthy reduction in over-reliance on one market region.

Duncan NZ is one of the five venison exporters in the P2P programme and one of the four involved in the P2P Benelux programme. This is increasing consumption of Cervena venison in the summer, by working with chefs in that region.

Deer Industry News 87“We’ve sent small volumes to our specialist and experienced importer Bimpex, which is working with two distributors Pinke and Geyskens in an exclusive supply arrangement.

“This exclusivity helps minimise unnecessary price competition. It ensures that each of us targets our own market segment,” he explains.

Moffat says for the New Zealand industry, the reduction in reliance on the game season trade means the sector’s fortunes are not so dependent on consumption at this time of year.

“New Zealand exporters have already indicated a possible price-range post-Christmas as their alternative markets have built to allow an increased degree of certainty in future pricing,” he says.

“With a sudden increase in venison volume unlikely in the coming years for the New Zealand industry, we might be looking forward to a period of stable high prices for New Zealand venison.”

This article first appeared in Deer Industry News magazine (December 2017/January 2018) and is reproduced here with permission. Check out the magazine for more in-depth deer industry specific news, including the venison and velvet market reports.

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