Concentrating on marketing its cuts rather than processing them is paying dividends for a niche meat exporter.
Hastings-based Firstlight Foods markets premium grass-fed Wagyu beef and red deer venison cuts on behalf of its 160 farmer-suppliers but outsources processing of the animals to third-party operators.
Removed from the distractions ofrunning meat plants, Firstlight managing director Gerard Hickey says he is free to concentrate on extracting maximum value from the market.
"We have only got one squeaky wheel and that is the market." This nimble approach produced a 15 per cent premium for its farmers over rival company schedule prices the past five years, he said.
Hickey, who started Firstlight in 2003, says the company's assets are largely its brand and intellectual property which support the "story" behind the meat cuts it sells.
"We have become value-chain champions. We know not just about the piece of meat, we know about the whole life story and quality our farmers are producing ... retail customers increasingly want to know about that." Regular visits by overseas customers to New Zealand farms and vice-versa is all part of the deal.
Firstlight's innovative venison stirfry.
"Most of our farmers have been to the marketplace and the customers on their farms, so each party understands the need for longevity and patience with the natural system."
The natural variation in supply that Firstlight's reliance on all-grass farming systems inevitably creates is smoothed out through its diverse supply base in both islands.
If drought means farmers in one region have difficulty finishing animals to required weights, then others will step in and fill the gap.
At the other end of the supply chain Firstlight increases sales using market research to change how retail partners market their products.
Historically wary of allowing its suppliers anywhere near their aisles, UK high-end supermarkets Waitrose and Marks & Spencers picked up on Firstlight research showing venison's emerging appeal to British consumers as a new healthy eating option.
"Traditionally venison in the UK has been sold as tweed caps and hunting and the food of kings and we found that for most consumers healthy is the new thing," Hickey says. "It has had quite a dramatic impact on the way we have designed our product and our packaging and we have launched a mince and a stirfry which is traditionally two products that you wouldn't have seen with venison."
In its newest market in the United Arab Emirates, Firstlight has tried another fresh approach and invested in a butchers' shop and a delivery van for door-to-door deliveries to customers in Dubai.
Hickey concedes that Firstlight's intensive approach could not be easily replicated by larger players.
But he wonders if more widespread collaboration could be the answer to the middling returns dogging the industry. He says it just could be possible that in an industry where specialist marketing companies sell prime cuts from farmers' animals, and others focus on the commodity end of the business, and others on processing, returns could be lifted further for everybody.
Slump in Chinese demand for lamb
A meat industry leader says a late-season slump in Chinese demand for lamb looks set to carry on into the next selling season.
New Zealand meat exporters experienced a large increase in demand from China in the past few years and in 2013 it overtook Britain to become the country's largest single sheepmeat market.
Although the Chinese did not push prices into the stratosphere as they did with milk powder, they provided respectable returns at a time when demand from traditional markets in Europe remained soft.
A steady outlook for prices from China and an expected recovery in European demand prompted meat company executives last year to tell farmers to expect in excess of $100 for prime lambs in the coming season. However, a slump in demand from China saw the price paid to farmers struggle to make $90 for the season just ended.
Rob Hewett, chairman of the country's largest meat exporter, Silver Fern Farms, dampened down expectations of a recovery in demand in time for the next selling season later in the year.
Hewett said payments by the Chinese Government to Mongolian farmers to retire grazing land for environmental reasons had led to a significant culling of sheep and a flooding of the market with sheepmeat which had so far failed to clear.
"It is lining up to be an inter-season problem. It is going to flow over into next year."
Nigel Stirling is a farmer and agribusiness and trade journalist.
