Deer antler velvet selling amidst global uncertainty

Deer antler velvet selling amidst global uncertainty

Monday, November 23, 2020

Stags in velvet on a Canterbury high country farm

Consumer demand for NZ deer antler velvet appears to be firming in the main markets, South Korea and China, as well as new growth markets like Taiwan. This is reflected in some reasonable sales of the new season’s crop, says Deer Industry NZ (DINZ) markets manager Rhys Griffiths.

“Overall sales are down on where they would normally be at this point of the season, but that’s to be expected in an environment of global uncertainty. Covid is making buyers more cautious than usual, but some are buying,” he says.

Griffiths says market research carried out by DINZ in Korea reveals that the main attributes that consumers associate with velvet are anti-fatigue and boosting immune function.

“That’s a good space to be in right now. Many Korean consumers take red ginseng products regularly, but when they want something more powerful, they go for a product that contains deer velvet,” he says.

“Major Korean consumer product companies are catering for this demand, with several releasing new products based on NZ deer velvet during the epidemic. Online sales of these products are likely to have been good, somewhat offsetting the downturn experienced through physical retail stores earlier in the year. The Chinese and Korean economies are both performing better than western countries, which is better news for NZ velvet. Both countries have been very successful in supressing Covid.”

Despite this good news, Griffiths says Covid has put pressure on the supply chain. Velvet is harvested and processed over four months of the year, but is consumed for 12 months. This means buyers have to finance their purchases in an environment where Covid remains a real risk.

“Those who are financing purchases are applying a risk premium because of Covid, so we have seen prices ease in the early season contracts relative to prices at the close of last season,” he says.

Griffiths says the deer industry has made a major effort in recent years to embed its premium position in key markets. Deer farmers have invested heavily in improved harvesting and cool chain facilities to ensure that velvet is humanely removed in a clean environment and is frozen immediately afterwards.

“Deer sheds are part of an audited regulated control scheme administered by the Ministry for Primary Industries. This, together with veterinary supervision of velvet removal, gives major pharmaceutical and food product companies great comfort about the quality and provenance of our velvet.

“Our latest initiative, VelTrak – an electronic traceability system that will be introduced for all velvet from next season – has been designed to provide major customers with the proof of integrity they expect from their suppliers. We expect it will open a lot of new doors across Asia and is technology that other producing countries are unlikely to be able to match.”

Griffiths says genetic improvement in existing deer herds is leading to modest increases in velvet production. This ensures sales volumes keep pace with growing market demand. “The deer industry is not looking for new entrants to velvet production at present.”