The leading meat exporter Alliance Group is making inroads into the food services sector with its new premium range, our Special Correspondent explains.
Commentators have long called for New Zealand's exporters to add value to their primary products.
Food and solutions company Alliance Group, founded in Invercargill in 1948 as a meat processor, is doing just that.
Alliance, a co-operative owned by 4000 farmers, is a year into building a premium red meat portfolio for the food services sector (hotels and restaurants) to capture more market value.
Chairman Murray Taggart says "we are very pleased with the progress and are now seeing benefits.
"We are attracting different customers to different brands. They are so taken with the premium range that this has a flow-on effect to our main branded products (Pure South and Ashley)."
Fine cuts of significantly-priced Te Mana Lamb, Handpicked 55 day aged beef and Silere alpine origin merino lamb are now sold in Michelin star restaurants in Hong Kong, Singapore, United Kingdom and United States.
The premium products are sent overseas to distributors in 10kg proportions and are pre-cooked (sous-vide) before being sent to the restaurant for finishing and plating up.
"We cut the meat to match the plate, and we are providing a higher level of service," says Taggart.
"We talk to the chefs to find out what they actually want and provide solutions for them.
"We are putting a lot of work into telling the story around where the meat comes from and how it was raised, and I think the chefs appreciate us coming up with different solutions on variety and taste," he says.
"Chefs like to have a point of difference and have options to refresh their menu — that's part of our strategy.
"We are also trying to match flavour with the different markets — China for instance prefers a stronger flavour. We are still in the early stages of our food services journey but we are definitely scaling up," he says.
Taggart says one of the challenges has been picking the right distribution partners. "It's a different service offering than retail and we have learned a bit. Sometimes we haven't picked the right distributor.
"A lot of it is to do with getting alongside the customers and understanding what they really want. It's only by meeting them do you truly understand."
Hosting overseas chefs
To bridge that understanding gap, Alliance has created a promotional programme, Pure South Discovery Series, of hosting chefs in New Zealand.
So far three groups totalling 40 chefs from Hong Kong, Singapore and the UK have visited after winning cooking competitions at home.
"We take them to shareholder farms and show them our natural grass-fed farming systems.
"They see some spectacular parts of the country and they do dinners (with our product).
"They are so willing to be ambassadors once they've been out here — one chef from the UK even has lamb tattooed on his forearm," says Taggart.
The effort and promotion is paying off as Alliance's premium products are winning awards and being served in some of the world's leading fine dining restaurants.
Te Mana, a new kind of lamb, has elevated levels of omega 3 and polyunsaturated "good" fats.
The lambs are raised in the South Island high country and then spend the last 30 days grazing on a chicory herb blend on finishing farms.
It is billed as the wagyu of lamb, and is a partnership between Alliance, a group of progressive farmers known as Headwaters and Ministry of Primary Industries.
The dusky red Silere alpine origin lamb, produced in partnership with New Zealand Merino Company, is succulent and has a stronger, more robust flavour.
Handpicked beef, marketed under the Pure South brand, is selected by master graders and aged for 55 days. It recently won further international honours in the World Steak Challenge in Dublin, taking out gold for ribeye and bronze for fillet.
There were more than 300 entries from 25 countries.
Selling product online
The Silere range is now being sold through the UK's leading online supermarket retailer, Ocado, and shoppers have a choice of boneless leg lamb joint, extra-trimmed rack, loin fillets and boneless rumps.
"We are trying a more premium offer online so we don't clash with our normal retail activity in the same (UK) market," says Taggart.
"I'm sure the Silere offering will expand."
Pure South lamb, beef and venison are also sold online in China through Alibaba's Tmall website in the New Zealand Country Pavilion store. "That's going pretty well and we haven't ruled out putting up the premium brands," says Taggart.
He says the big challenge in China is "the last kilometre" of getting the perishable product from the distributor to the consumer. "We have to make sure the product hasn't thawed and is still in good form when it reaches the customer."
No doubt Alliance has found the answer. "I've seen seven to eight little motorbike couriers lined up outside our distribution centres," Taggart says.
Alliance completed a corporate rebrand last year as it transitioned from a meat processor to an innovative food and solutions cooperative. It was also selected as one of the first companies to send chilled lamb to China.
"We diverted product that was going to the United States to China because there were better returns out of China.
"The market there is so big that exporters don't trip over each other," says Taggart. "At the end of the day we want to have a diversified portfolio across a number of markets. It mitigates risk."
Alliance exports nearly 300,000 metric tonnes of product a year to 65 countries — the main markets of China taking 30 per cent of the volume, Europe/UK and North America 25 per cent each and Middle East 5 per cent.
There are emerging markets in Southeast Asia, India, South America and Eastern Europe.
Alliance is keeping a close watch on the Brexit saga since it will be shipping product to the UK for the Christmas trade at the time when the UK is due to leave the European Union (after October 31).
"It's a glorious unknown," says Taggart.
"While the UK government has given assurances that trade won't be disrupted, what about the new protocols and procedures.
"Our people in the UK are keeping closely in touch — but if the politicians don't know what will happen, how will the bureaucrats know.
"We don't want our boats turning up and being told we can't take your product because the (new) paperwork hasn't been done. It's all new territory — that's the uncertainty of it," he says.
"Our product has a 17 week shelf life and a fair chunk of that is on the boat. We only have a couple of weeks to get it to the retailer.
"Every extra day of shelf life is valuable for ourselves and retailers. We don't need any delays, and we do have the flexibility to switch markets," says Taggart.
This is the new-look Alliance Group.
It has positioned itself to adapt to any market change — and it has transformed itself with new products to remain a competitive international exporter that relies on quality and food safety.