Duncan & Company
Contents
1. Duncan & Co Introduction
2. Market Case Study: Germany cf
Non-Europe
3. Industry Profitability
4. Summary/Conclusions
Duncan & Company
• Established in 1990- 24 years in
business
• Venison specialists
• National coverage
Sales
• New Zealand- 2%
• Asia- 8%
• Balance –Europe/Nth America 50:50
Supply Contracts
• All year round 12 month contracts
- Indexed to the schedule to reflect
market and competitive conditions
- Bonuses paid for commitment,
loyalty, off season supply and
performance
Yield Scoring
• Yield research trials show over $1.00/kg variation
between best and worst yielding stock
• Individual deer yield scored to enable more
accurate pricing of deer and valuable breed
selection feedback for farmer
Case Study :
Germany vs Non-Europe
Europe
- Volume dropping
- Price premium over other sources
reducing
German Market
Why?
- 2011 research findings back up research of 20 yrs ago
- Traditional consumers want :
• strong gamey taste, not mild.
• local source of supply, not imported
• traditional recipe, not modern cuisine
• traditional rustic restaurant décor and setting.
…those traditional consumers will try venison from other sources,
but its not their preference.
They’ll try imported, if there's none other available, or if its cheaper.
Quality is not critical, due to cut used and cooking method.
German Market- cont.
• If we want a premium, our target market is NOT the
Traditional game consumer, but the Non-game consumer, but
there are some Hurdles:
1. Pre-conceived notions re taste
2. Doubts re the farming of game
3. Issues re distance to the market, ( shelf life, fuel cost, carbon
emissions)
…which all make Germany a harder place to launch a premium
farmed game item than other markets where there are no preconceptions.
Non-European Market
Development over 20 years
Leg/Loin Items
6
5
4
3
Leg/Loin Items
2
1
0
1993
2003
2013
Non-European Market
Development (cont’d)
Shoulder
3.5
3
2.5
2
Shoulder
1.5
1
0.5
0
1993
2003
2013
Non-European Market
Development (cont’d)
Trim
7
6
5
4
Trim
3
2
1
0
1993
2003
2013
Non-European Market
Development
• Loin/leg items volumes dropped since 2008 GFC, but recovering.
• Shoulder and Trim items growth due to:
1. Lack of directly competing products
2. New product Innovation:
- On-shore, in the NZ plants
- Off-shore, at specialty processor level
- At restaurant level, where Chefs are increasingly creating high
end dishes, using lower priced, forequarter cuts.
Deer Industry Profitability
- Venison needs to be more profitable for both Farmer and
Exporter/Processor
- Deer farming profitability driven by:
1. Off shore market prices
2. On farm cost efficiencies
3. Exchange rates
• NZ Dairy Industry’s competitive advantage built on NZ being lowest
cost producer with high level of food safety integrity
• NZ Deer Industry is not the lowest cost producer of venison so we
need to achieve higher sale prices
Market Pricing
Upward Forces
•
•
•
•
Promotion
Supply shortage
High wealth consumers
Differentiation ( lack of
competing alternatives)
Downward Forces
• Lack of promotion
• Over supply
• Financially stressed
consumers
• Undifferentiated
product ( plentiful
choice of competing
alternatives)
Comparison of Germany with
Non-European markets
Differentiation/lack of competing alternatives
Germany
• Low Differentiation
• Most NZ venison items
sold to Europe
available from other
sources e.g.- Spain,
Scotland, Eastern
Europe
Non-Europe
• High Differentiation
• Most venison items
sold NOT available
from other sources
Other Constraints On Price
Chef vs Consumer
• Chef: (purchasing for the restaurant)
- Venison is an ingredient in a meal prepared by the Chef
- Restaurant is a business therefore food cost is a business
decision  the chef wants good quality but not necessarily
the very best quality
- Price is critical
- A premium is achievable but only small premium
Other Constraints On Price
• Consumer (purchasing for the home)
- Venison is an ingredient in the meal prepared at home
- If the occasion is special the venison purchase may be an
emotional one (not a business decision)
- The Moet vs Lindauer decision
- To create the premium positioning requires substantial
demand creation at consumer level
- Product form and distribution logistics are critical factors
Conclusions
We need better production ON farm, and better prices from the market.
To get better Market prices:
• Go to the Markets where there is least price competition with similar
alternatives
• Go to the markets where the product can be differentiated.
• Target buyers who are prepared to pay a premium price
Thank you.
Duncan & Company