Opportunities for New Zealand sheep milk products: a study of 5 export markets Sheep Milk New Zealand Conference 2020 31 March 2020 Presenters: Jan Hales & Shane Kells
Findings will be presented in two parts • Part 1 (Jan Hales) • Part 2 (Shane Kells) • Project background. • Implications for processing. • Key findings on the global • Implications for farming. market opportunity. • What this means for developing New Zealand’s sheep milk industry.
- Undertaken by the New Zealand Food Innovation Network. - Funding from the Provincial Growth Fund (PGF). - Started January 2019. - Focused on opportunities to grow the New Zealand sheep and goat dairy industries and stimulate regional economies. - Concentrated on how to scale the sector to meet PGF goals.
Project Scope Export Markets Processing Farm Current vs. future China Current vs. future requirements. requirements. USA Creating value Financial model. Germany from milk. Environmental Manufacturing South Korea implications. models. Taiwan Cheese Yoghurt Butter UHT Milk Nutritional Powders Infant Formula
Key Points The market for sheep milk products is small and undeveloped High farm gate milk price expectation limits where we can compete To win, we need to position New Zealand sheep milk products at the premium end of the market
THE MARKET IS UNDEVELOPED According to Julian Mellentin from New Nutrition Business, sheep and goat milks are fast growing, premium niches that are starting to challenge cow’s milk ... in the West as well as Asia. Kid’s Nutrition Report, 2019
Germany is the most developed market for Sheep Milk products Sheep Milk Products - Estimated Total Market Size 18,000 16,000 14,000 12,000 10,000 Tonnes 8,000 6,000 4,000 2,000 0 China USA South Korea Germany Taiwan Cheese Yoghurt Butter UHT Milk Nutritional Powders Infant Formula Values derived from data provided by Gira (2019) and MPI & Euromonitor (2020)
Cheese dominates the market Sheep Milk Imports – Estimated Market Size Infant Formula Nutritional Powders UHT Milk Butter Yoghurt Cheese 0 5,000 10,000 15,000 20,000 25,000 Tonnes China US South Korea Germany Taiwan Values derived from data provided by Gira (2019) and MPI & Euromonitor (2020)
HIGH FARM GATE MILK PRICE EXPECTATIONS LIMIT WHERE WE CAN COMPETE
Our sheep milk costs 2-3 times more than our competitors • Sardinian milk price NZ$1.10 - • Average milk price NZ$2.75 $1.45 per litre 1 per litre This forces us into premium categories OR the premium end of every category. 1 Source: https://www.forbes.com/sites/annalisagirardi/2019/02/19/why-shepherds-are-pouring-milk-on-highways-in-the-italian-island-of-sardinia/
Yoghurt is a large, fast growing category in China - we would have to develop the premium end of the market to be profitable Current price Drinking Yoghurt in China of locally 25.00 made yoghurt from non- $20.00 bovine milk 20.00 $15.00 15.00 US$/kg or NZ$/kg 10.00 $7.48 $5.50 5.00 $3.56 0.00 -5.00 $(3.90) -10.00 USD$ Avg market price Approx. NZ margin NZ margin is the value of the product when is leaves New Zealand, minus manufacturing/transport/storage costs. Note: Calculations include manufacturing and supply chain costs; excludes R & D and market development costs. Derived from retail pricing provided by Gira (2019).
Infant Formula is an easier win Sheep Infant Formula 120.00 $99.01 100.00 $89.51 $76.70 80.00 $75.00 $64.60 US$/kg or NZ$/kg $56.80 60.00 $49.35 40.00 $27.69 $27.67 $25.95 20.00 0.00 China USA South Korea Germany Taiwan USD$ avg market price Approx. NZ margin Note: Calculations include manufacturing and supply chain costs; excludes R & D and market development costs. Retail prices from Gira research (2019).
TO WIN, WE NEED TO POSITION NEW ZEALAND SHEEP MILK AT THE PREMIUM END OF THE MARKET
Who are our consumers? What do they value? What are the willing to pay for? Leverage our strengths/ address our weaknesses Adapt and innovate without compromising our resources
Acknowledgements Project Lead, CEO FoodSouth John Morgan Steering Group Daniel Phillips, Ministry for Primary Industries Mackenzie Nicol, Ministry for Business Innovation and Employment Nick Dobson, New Zealand Trade and Enterprise Stuart Gordon, Waikato Innovation Park Warwick Tauwhare-George, Parininihi ki Waitotara Craig Prichard, Massey University Peter Hobman, Working Foods International And everyone else who has been generous with their time and shared their expertise with us throughout the project.
Recommend
More recommend
