New health foods for China?

New health foods for China?

Friday, February 12, 2021

Three companies marketing deer velvet antler in Asia – CK Import Export, PGG Wrightson and Provelco – have formed a coalition to develop a market for NZ velvet as a health food ingredient in China. 

Deer Industry New Zealand (DINZ) marketing manager Rhys Griffiths says the companies are collaborating in order to get the critical mass needed to make an impact. In all other respects they will continue to compete vigorously with each other for sales and farmer supply.

He says that deer velvet and red ginseng – two of the two most highly-prized ingredients in traditional oriental medicine – have in recent years enjoyed an explosion in demand from South Korea for use in branded natural health products to combat fatigue and boost immunity.

“The aim of the coalition is to replicate this phenomenon in China, where locally produced and imported velvet is still mainly used in traditional medicines,” Griffiths says.

“A Shanghai-based business development manager will be doing the ground work. Their role will be to identify and work with a small group of brand-name companies that are willing to develop and promote products based on velvet from New Zealand. Interviews for the position are now underway. 

“The success of these products would likely give other companies the confidence to develop and market similar products, thereby expanding demand for velvet from New Zealand.”

Griffiths says the three companies will collectively provide most of the funding, with a contribution from NZ Trade and Enterprise (NZTE) and administrative support and some funding from DINZ. He thanks NZTE for its support of the coalition, which he says goes well beyond the financial contribution it is making.

The business development manager is being hired by Primary Collaboration New Zealand (PCNZ), a China-registered company the coalition has joined as a member. PCNZ represents several NZ food and beverage product marketers in China and works closely with NZTE.

The Shanghai-based NZ Trade Commissioner Richard Dunsheath (pictured), who attended the public launch of the partnership in Christchurch, says the coalition is a really exciting development. “I look forward to working with them. Collaboration makes a huge amount of sense in a market as large and complex as China.”

Griffiths says China has introduced strict food safety laws in recent years. “New Zealand is one of only two velvet producing countries that can comply with these. We have an MPI-administered Regulated Control Scheme that ensures that velvet is removed and stored in clean facilities, provides traceability and meets cold chain management requirements from the farm to the market, or until it is processed.”

New Zealand also has a National Velvet Standards Body that manages a strict code of welfare to ensure that velvet removal is pain-free. Velvet can be removed only by veterinarians, or by accredited farmers under veterinary supervision.  

DINZ chief executive Innes Moffat says he was heartened when the companies approached DINZ with the proposal to form the coalition. 

“Collaboration means companies can make faster progress in the market and it makes it easier to secure government and industry funding. The venison industry’s Primary Growth Partnership programme, Passion 2 Profit, operates on a similar basis,” he says.

“The initiative has our support because of its potential to benefit the whole industry. It aligns with our objectives of building market recognition of NZ velvet as a premium product, developing new markets, and creating sustainable on-farm value.” 

Photo: Shanghai-based NZ Trade Commissioner Richard Dunsheath with some high value velvet-based health-food products marketed in Korea. A coalition of NZ velvet exporters aims to repeat the success of these products in China

Background

  1. Stags (male deer) grow new antlers in spring each year. When the new antlers emerge they are initially covered in fine hair and are soft to the touch, hence the name ‘velvet’. During summer, the base of the antler calcifies and turns into bone, a process that continues until autumn, when the whole antler becomes bone.
  2. The safety and efficacy of velvet has been widely studied, both in Asia and New Zealand. In general, this tends to confirm that deer velvet has restorative, strengthening and protective properties. Recent research shows the quality of NZ velvet, as measured by its bio-activity, has been steadily increasing.
  3. The top-selling velvet-based product in Korea is for busy executives to give them an energy boost and clearer focus at work. Many athletes also use velvet to aid their recovery following intense exercise. 
  4. DINZ does not own or trade in velvet or venison. It achieves its objectives by supporting velvet and venison marketing companies with their market development programmes. DINZ is willing to support other NZ velvet companies with market development proposals for China or other markets, if these align with industry objectives. 
  5. The coalition has obtained legal advice to ensure its activities comply with NZ competition law. There will be no restriction placed on any health food company they work with in China as to where in New Zealand they source their velvet.