Hindsight to Foresight Where have we come from, where are we - - PowerPoint PPT Presentation

| 14/06/2015 Andy Macfarlane, Dan Coup

Hindsight to Foresight

Where have we come from, where are we heading?

| 14/06/2015 Andy Macfarlane, Dan Coup

| 14/06/2015 Andy Macfarlane, Dan Coup

| 14/06/2015 Andy Macfarlane, Dan Coup

Old Technology

| 14/06/2015 Andy Macfarlane, Dan Coup

New technology, new opportunity

Entrepreneurs + risk =

| 14/06/2015 Andy Macfarlane, Dan Coup

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

14/06/2015 Andy Macfarlane, Dan Coup

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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

14/06/2015 Andy Macfarlane, Dan Coup

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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

14/06/2015 Andy Macfarlane, Dan Coup

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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

14/06/2015 Andy Macfarlane, Dan Coup

Or similar combination

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Fawning

14/06/2015 Presented by Max Müller

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Slaughter date

14/06/2015 Presented by Max Müller

Chart – Average slaughter date

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Product Weights

14/06/2015 Presented by Max Müller

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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

14/06/2015 Andy Macfarlane, Dan Coup

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An integration strategy:

• pulling the value chain together

Passion2Profit

14/06/2015 Andy Macfarlane, Dan Coup

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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

14/06/2015 Andy Macfarlane, Dan Coup

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Passion2Profit - refresher

14/06/2015 Andy Macfarlane, Dan Coup

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Passion2Profit - refresher

14/06/2015 Andy Macfarlane, Dan Coup

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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

14/06/2015 Andy Macfarlane, Dan Coup

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P2P – On-farm

Where have we come from, what’s happening, what’s next…

14/06/2015 Andy Macfarlane, Dan Coup

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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:

14/06/2015 Andy Macfarlane, Dan Coup

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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:

14/06/2015 Andy Macfarlane, Dan Coup

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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:

14/06/2015 Andy Macfarlane, Dan Coup

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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

14/06/2015 Andy Macfarlane, Dan coup

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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
• pportunities can be aligned to market

Outcomes

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P2P – Marketing

Delivering greater market returns for venison

14/06/2015 Andy Macfarlane, Dan Coup

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Price relative to game…

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Price relative to beef, lamb

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Lost value

14/06/2015 Andy Macfarlane, Dan Coup

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Lost value

14/06/2015 Andy Macfarlane, Dan Coup

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Objective

14/06/2015 Andy Macfarlane, Dan Coup

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?

14/06/2015 Andy Macfarlane, Dan Coup

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?

14/06/2015 Andy Macfarlane, Dan Coup

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

14/06/2015 Andy Macfarlane, Dan Coup

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

14/06/2015 Andy Macfarlane, Dan Coup

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

14/06/2015 Andy Macfarlane, Dan Coup

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Netherlands Cervena Pilot

14/06/2015 Andy Macfarlane, Dan Coup

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

14/06/2015 Andy Macfarlane, Dan Coup

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

14/06/2015 Andy Macfarlane, Dan Coup

A strategy encompassing all deer farming processing and marketing

• 1. Venison
• 2. Velvet
• 3. Co-products

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Strategic Objectives

14/06/2015 Andy Macfarlane, Dan Coup

• 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

14/06/2015 Andy Macfarlane, Dan Coup