Manuka Market Insights
An on-stage discussion between international honey marketing experts at the Apiculture New Zealand conference in June gave beekeepers in the audience a look into the factors impacting the international honey trade. In the first instalment of a two-part series recapping the conversation between 100% Pure New Zealand general manager Sean Goodwin, Manuka Health chief commercial officer Harry Woods and Egmont Honey founder and chief executive officer James Annabell, we recap their analysis of the manuka honey market following a year like no other, thanks to surging demand from international consumers.
There’s no doubt about it, while Covid-19 has brought a wave of death, illness, uncertainty, disruption and logistical chaos to the world, it has also seen consumers alter their buying patterns – including a jump in manuka honey sales.
The topic of Covid-19 and what it has meant to the manuka honey market, as well as the ongoing ramifications, was a central part of the honey experts’ discussion in Rotorua.
“What we did see is significant increases in immediate demand in the retail space, then we saw the exports pick up after that,” Woods said of Manuka Health’s honey sales since the onset of the global pandemic in early 2020.
Annabell had hoped that the 2020 boom in sales was “the new normal”, but “come the new calendar year things returned to normal across the board, from supermarkets to health food stores,” he said.
Woods is optimistic that come 2022 demand will pick up again though.
“A lot of product purchased in that first Covid spike in 2020 or towards the back end of the year, is probably still sitting on shelves, in logistics centres, or in people’s cupboards. Our assessment at the moment tells us there is probably not more consumption on a daily basis, but people have stocked up on product. That is a good thing in the end, we just need to move through the inventory sitting in the market,” Woods explained.
“My outlook is that probably through to December of this year demand might be flat. From there, as the world moves closer to normality, after Covid restrictions ease and consumers start coming back to stores, that we should see another lift next year.”
All three exporters agreed there was a need to try to expand manuka honey markets, but that it was an expensive exercise. Goodwin pointed out that most of the surge in manuka honey exports went to the top four markets.
“It appears as though we are just selling more and more honey in existing channels,” Goodwin said.
“Europe, North America, China and Japan are all great markets because the consumers understand health and wellness products, they are looking for natural alternatives, they have the disposable income to afford our great products and the retail environment is well set up,” Woods explained.
“They are markets that work for our product. It will take time to develop other markets, just because of the type of market this is.”
Egmont Honey has grown their business substantially in recent years, by focusing on exporting a range of honeys, not just manuka. Annabell said one way to generate high-end manuka honey consumers is through an introduction to the product through lower-grade honeys, and therefore he believed multifloral manuka honey should continue to hold a place within New Zealand’s export definition.
“We are consumer led. The consumer tells us and our markets prove it, there is a market for $10 multifloral manuka honey on the supermarket shelf.
“People buy the multi, then they trade up to the mono once they have done a bit of research on it. Through that Covid boom, one retailer said they went from 30% online to 70% online, but the product bought was mono. They traded up because they wanted the immunity properties,” Annabell said.
The Next MGO…
There is significant room for growth in the manuka honey market, Goodwin believed.
“Awareness and attraction of manuka honey is still incredibly low,” the 100% Pure New Zealand Honey GM explained.
“Where we get that penetration, then the conversion tends to be pretty good. It is not the type of product where the consumer dips in and out periodically. They either buy into the concept of preventative wellness and are using it all the time, or they don’t. The question is, who is breaking that ground? Whose job is it?
“In all the other primary sectors there is a role for the industry to, at least, be out there flag waving, creating awareness and leading the brands to compete at a level based on a New Zealand Story or whatever it might be.”
Woods carried on that theme, saying “we need to make sure we are all investing to create awareness”, while also stressing the importance of finding the next “unlock” for the category.
“We need to find the next MGO, because that was about 12 years ago. We need another one of those and we need to understand consumers and continue to invest,” the Manuka Health marketer reinforced.
On the subject of rating systems, the trio on stage were aligned in their belief that more unity was required. Currently all three executives boast both UMF and MGO ratings on their respective honey labels.
“We need to get our rating system aligned. I firmly believe that. From a marketing point of view, I don’t care what it is, but we need to have one and be singing the same tune,” Woods said.
Goodwin believes that determining a primary manuka honey rating system and definition to move forward with will be essential in fighting off the threat of Australian “manuka” honey in what is an increasingly blurred market.
“The genie is out the bottle and it is not going back in, but we don’t need 200 different brands. We don’t need confusion around what is manuka, what is mono, what is multi, what is MGO versus K-factor. We need some degree of certainty.”
A Rosy Future?
Whether it be capitalising on a Covid-induced surge in demand, trying to push into new markets, solidify existing markets, searching for the next “unlock” through research, or striving to attain a semblance of unity between honey packers, there is work to be done in the manuka honey market place if it is to reach its potential. Woods, Annabell and Goodwin all agree that the future has great potential though – and putting a figure on how large the export market could be was folly, but it could be bigger.
“Our outlook is very, very positive in the medium to long term,” Woods said.
“We produce an amazing product and the world’s consumers are looking for healthy products to live a better life. Manuka honey fits perfectly in that space. So, we are still confident that in the long-term strong demand is out there in the market.”
Next month, in part two of the market discussion recap, we will go beyond manuka honey to get a range of thoughts on the wider New Zealand honey market, insights into the cost of breaking into new markets, and advice for building beekeeper-honey packer relations.