Price – It’s Not a Sustainable Unique Selling Point
APIARIST'S OPINION: JOHN SMART
Now, as much as ever, the issue of capturing maximum value for New Zealand’s range of honey varieties is front of industry discussions. It’s an issue faced daily by one of the country’s leading honey packers, Airborne Honey in Canterbury. General manager of sales, John Smart, offers some food for thought for the industry…
By John Smart
Price is not a unique selling point, but as beekeepers and packers we fall into the trap of thinking we are building a sustainable business by using price to increase market share. If we want to play this game, then our competition is the lowest cost honey producer and packer in the world – a competition we will never win.
Honey is also competing against jam, nut butters and other spreads, which are not 100% anything and not necessarily 100% sourced from New Zealand. Consequently, these products have ability to manipulate the cost of the ingredients to maintain an acceptable gross profit.
In recent years the New Zealand honey industry has derived significant increased value from selling mānuka honey under the UMF/MGO commercial trademarks. With more than 250 registered honey brands and 10,000 beekeepers, many are focused on producing mānuka honey based on a structure that encourages competition between beekeepers.
Production for premium priced mānuka appears to have increased above the level of demand. Prices have thus declined to clear stocks, making mānuka an everyday honey in supermarkets world-wide – just take a look at the images from the recent opening of Costco in Auckland.
To help reduce the competition between suppliers, there has been a lot of talk about using the cooperative model to create stability in the industry. The best way to validate this idea is with the market in mind. In other words, who the cooperative needs to displace to get market share and at what price? Or is there a new market for the honey?
The other issue cooperatives face is they are often forced to purchase a beekeeper’s entire crop. This is a production led approach which distorts prices.
The opportunity in my mind is providing a solution to the changes in food production during the last 40-50 years. Processed food makes up a large proportion of a first-world country’s diets. It seems bizarre that the natural food our human bodies have consumed for many thousands of years is no longer the natural choice.
The ball is in our court to change this, with help of research to demonstrate that honey as food contains the natural properties which cure the ailments of our first-world lifestyle.
It is this market led approach, linked closely with production, that lays the foundation for a sustainable industry. We see examples of this approach demonstrated with other primary industry products, built around plant variety rights, genetics, sustainable fibres, producer collectives and brand names etc.
New Zealand is in a unique position, retaining much of its natural flora which the bees can forage, producing many honey varieties and blends. Airborne is also in a unique position with our own in-house laboratory analysing over 40,000 batches of multiple honey varieties since 1985. Testing up to 60 parameters in each batch of honey.
With this information we believe New Zealand honey has a role to play as a food that is the natural choice.