This week, Meat & Wool New Zealand chief Scott Champion heads to Europe on a marketing mission. Here he outlines the opportunities and challenges facing our lamb producers.
Last year's global sheepmeat forum in Brussels highlighted that the challenge for sheep farmers around the world would be to increase both the demand and consumption of sheepmeat.
Current trends have sheep numbers falling and fewer people eating lamb around the world and so our collaborative resolve and commitment is
going to be important in the short to medium term.
Contrary to present-day folklore, New Zealand sheepmeat exports are still a very big deal and they earned this country $3.3 billion in export receipts last year.
The UK is New Zealand's number one sheepmeat market, accounting for a quarter of our global exports (by value). The UK is also where 60 per cent of New Zealand's lamb legs are sold. Germany is our second most valuable sheepmeat export market.
The interesting dynamic we are now witnessing in Britain is the export of local product into continental Europe. Sheepmeat exports from the UK have increased 37 per cent to 94,000 tonnes. This is a straight case of economics, given the current exchange rate with the Euro. British, Welsh and Scottish lamb is now worth more in continental Europe than it is at home.
Part of the commitment to improving the global fortunes of sheep farmers is understanding the dynamics of the markets and consumer trends. Knowing more about our markets and what consumers are looking for is vital.
Market research carried out by Meat & Wool New Zealand shows that in the past eight years sheep flocks in the European Union decreased 12 per cent to 78 million (UK down 11 per cent to 21.8 million, France down 16 per cent to 7.7 million and Spain down 18 per cent to 19.9 million).
Our own flock, too, has decreased to 32.4 million through a combination of changing land use and extreme weather pressures. At its height in the early 1990s there were 60 million sheep - double today's flock.
Tightened supply does have its upside and we have seen that reflected through in-market prices which are at record highs. The challenge is for this to be sustained.
Market analysis from a joint industry study in the UK and Europe pegs sheepmeat consumption at 6kg a person a year, compared to chicken at 27kg, pork at 22kg and beef at 17kg.
Look a bit further and there are vast differences in lamb consumption for individual EU countries. The UK sits at about 6kg a person, but Germany is just under 1kg, highlighting the diversity and complexity of European market.
New Zealand lamb has great brand recognition in the UK. Recent research showed that when asked where lamb comes from, nine out of 10 British consumers said New Zealand.
Lamb is reserved for special occasions in these Northern Hemisphere markets. The main reason for this is that it's expensive. The New Zealand lamb trade peaks at Christmas and Easter and it's important that purchasing is strong at these times to keep demand ticking over.
It's therefore important that our in-market programmes keep New Zealand lamb in front of consumers and profile it as versatile and convenient for a variety of occasions.
Increasingly we are using online communications to reach consumers. By using consumer e-newsletters containing recipes, competitions and tips, almost a quarter of a million British households are receiving information about New Zealand lamb. In Germany the focus is on in-store tasting events to introduce New Zealand lamb to consumers.
This work is not carried out in isolation. Meat & Wool New Zealand works alongside the meat export companies operating in these markets to grow preference for New Zealand lamb. In the future, our collaboration on market opportunities will be even more crucial.
As with any business, relationships are critical and this visit to the market is about further developing relationships with those in the trade and with the farmer groups that committed last year to addressing the global sheepmeat issues.