The supply chain
SUPPLY CHAIN 1 : FARM TO FACTORY
Hives are located on land near manuka forests.
The land owner charges a rental that is a
percentage of the honey crop value.
Hives need to be free of pest and diseases, and
have a large population of bees.
SUPPLY CHAIN 1 : FARM TO FACTORY
The manuka blossom period, which is about six
to eight weeks, has to be carefully judged by
beekeepers to avoid diluting the pure manuka
honey with honey from other species.
Rain during the blossom period washes away
nectar and reduces yield significantly.
SUPPLY CHAIN 1 : FARM TO FACTORY
The timing of blossom depends on sunshine and
temperature and follows this sequence:
Far North
Bay of Islands
Waikato
Taupo
Wairarapa
Aug/Sept
Oct/Nov
Nov/Dec
Dec/Jan
Jan/Feb
SUPPLY CHAIN 1 : FARM TO FACTORY
Honey is collected from the hives by
beekeepers who may travel up to 250
kilometres to find good locations.
Honey is extracted from hives and put into
drums. Hygiene regulations must be adhered
to.
SUPPLY CHAIN 1 : FARM TO FACTORY
Honey is delivered to the factory and must
have a ‘harvest declaration’. This identifies the
hive, location, beekeeper, date of harvest etc.
This is to allow ‘supertraceability’ of the
product right back to the hive for export
regulations.
Activity card 1
SUPPLY CHAIN 1 : QUESTION
Cyclone Ngaire has drenched the North Island
during spring and many beekeepers are in
trouble, having little or no harvest and
cashflow problems preventing relocation of
hives.
Question: What should Comvita NZ Ltd do?
Activity card 2
SUPPLY CHAIN 1 : QUESTION
Last season a beekeeper with high-UMF honey
but poor management skills, put in a false harvest
declaration. No problems resulted from this, and
the false report was only recently discovered in
the files. This year’s harvest time is approaching.
Question: What should Comvita NZ Ltd do?
SUPPLY CHAIN 2 : FACTORY TO MARKET
The manuka honey range sells in stores in
Taiwan, Hong Kong and mainland China. The
local requirements for labelling are different
even though all three jurisdictions are part of
‘Greater China’.
SUPPLY CHAIN 2 : FACTORY TO MARKET
Comvita honey products are shipped by sea to
the southern Chinese port of Shantou and then
moved by rail to major distribution centres.
Transport costs are low compared with the
products’ value.
SUPPLY CHAIN 2 : FACTORY TO MARKET
The retail market for Comvita products is
rapidly growing in Hong Kong (5%) and China
(16%) annually, although Australia was still the
single biggest market (by revenue) in 2011.
SUPPLY CHAIN 2 : FACTORY TO MARKET
Due to ongoing distribution problems, in 2011
Comvita took direct control of distribution in
Australia, and boosted customer service and
logistics personnel. Sales have rebounded.
SUPPLY CHAIN 2 : FACTORY TO MARKET
Online sales of Comvita products – which come
from eight specific language websites based in
countries including Hong Kong, Japan, the UK
and Germany – have increased rapidly in 2011.
Products can be tailored to each country’s
market.
SUPPLY CHAIN 2 : FACTORY TO MARKET
Comvita expanded its product range with the
purchase of Olive Products Australia in 2007,
and Kiwi Bee Medical in 2008. Research into the
medical effects of these products is under way.
In 2011, Comvita lost a patent case in the UK,
but has set aside funding to appeal the
judgement.
Activity card 3
SUPPLY CHAIN 2 : QUESTION
The container vessel Rena, which was due to
pick up a Comvita container for China, ran
aground on Astrolabe reef, making prompt
delivery to a new retail outlet in Shanghai
unlikely.
What should Comvita NZ Ltd do?
Activity card 4
SUPPLY CHAIN 2 : QUESTION
The recently expanded network of shops in
Hong Kong (now 56) has led to a spate of
mixed-up orders. Comvita NZ Ltd management
feels the brand reputation is under threat in
this market.
What are the options for Comvita NZ Ltd ?
Activity card 5
SUPPLY CHAIN 2 : QUESTION
Comvita has a new range of fish oil products
that it is keen to release in China and Korea.
However, consumer feedback is that these fish
oil products do not sit well within the Comvita
brand.
Suggest three ways for Comvita NZ Ltd to
proceed.