New Zealand company taps into the grass-fed meat market in China

When New Zealand Prime Minister Chris Hipkins led an official delegation to China in late June, it heralded the opening of a new chapter in bilateral relations between the two countries.

Prime Minister Hipkins was accompanied by a group of prominent New Zealand business leaders, including representatives from multinational Silver Fern Farms, which processes and exports premium lamb, beef and venison, along with related products.

Silver Fern Farms entered China in 1997, and for the past four years, China has been its top market, accounting for 35 percent of the company's total export volume in 2022.

To solidify its strategic position in the Chinese market, on Tuesday, Silver Fern Farms signed a memorandum of understanding with Shanghai Paradise Garden Healthy Food that is projected to generate 80 million yuan ($11.1 million) in chilled and frozen beef and lamb business annually. Prime Minister Hipkins, Trade and Agriculture Minister Damien O'Connor and Minister of Tourism and Minister of Forestry Peeni Henare witnessed the signing.

China is the largest importer of New Zealand beef, lamb and mutton. Boasting a natural environment blessed with fertile soil, fresh air and abundant rainfall throughout the year, New Zealand's lush pastures allow farmers to raise animals in expansive grazing fields. This natural grass-fed method ensures consistent safety, high quality, and a richly nutritional taste.

Rising demand

Official data shows China's meat imports in the first quarter of 2023 totaled 1.95 million metric tons, which is a 17.2 percent year-on-year increase. Chinese consumers are becoming more cognizant of health and view beef as a higher-quality meat choice, but due to price considerations, its purchase proportion remains relatively low.

Simon Limmer, chief executive of Silver Fern Farms, said: "The rising demand for meat gives us a lot of confidence in the Chinese market. Fueled by urbanization and rising disposable income, there is more room for further growth in this market down the line.

"We see great potential in online fresh grocery delivery channels as advancements in the cold chain resolve home delivery concerns. Chinese consumers are also turning more frequently to online shopping and expect more convenient offerings as the stay-at-home economy booms."

As the income of Chinese consumers continues to rise, the proportion of beef consumption is also expected to increase. Limmer said surveys indicate 20 percent of Chinese consumers intend to increase their beef consumption, with a net increase significantly higher than that of pork and poultry.

China is currently the world's number one e-tailing country, and the market has responded by developing products more conducive to e-commerce delivery so that consumers can purchase quality grass-fed red meat products via the convenience of home shopping.

After China lifted its pandemic control measures and reopened the border, it utilized the Douyin app to launch its first Traceability Livestreaming project in New Zealand, and top-tier gourmet opinion leaders were invited to visit Silver Fern Farms operations and talk with their farmers.

This seeing-is-believing experience was combined with e-commerce sales on three key opinion leaders' livestream platforms. With the KOLs showcasing their travel experiences at Silver Fern Farms' natural farms, the livestreaming sessions accumulated 33.37 million impressions and nearly 10 million views.

Since chilled red meat products necessitate efficient logistics solutions, Silver Fern Farms has made investments in supply chain infrastructure and partnerships. The company has gained additional advantages through advancements in cold chain technology, which have enhanced its ability to expand its market presence in e-commerce, retail, and click-and-collect channels in such key markets as Dingdong Maicai, JD.com, and Hema.

Eating well

In the post-pandemic era, Chinese consumers are more cautious regarding food and dining expenditures, and are requesting more nutrition and health benefits. As their focus changes from "eating more" to "eating well", consumers are showing a marked preference for additive-free, low fat and high-protein choices.

"Our grass-fed red meat is a good source of protein and is rich in bio-available iron, zinc, and vitamins, and because it is lower in total fat and saturated fat, it has fewer calories," said Limmer. "What's more, our grass-fed red meat is tender and full-flavored. All these advantages make it an ideal choice for Chinese consumers."

In response to the trend of upgraded consumption, Silver Fern Farms developed its Reserve and Angus premium beef product lines, both of which have added high value and sustained annual growth.

The Reserve range is composed exclusively of Silver Fern Farms' highest quality grass-fed beef that is carefully selected through the Eating Quality System, a seven-point scientific rating criteria that includes ultimate pH testing, marbling, color, and rib fat. With this high standard, only four in 100 carcasses will make the cut, ensuring Reserve adheres to the highest standards of taste, tenderness and juiciness while providing choices for discerning chefs and consumers.

During the fifth China International Import Expo, Silver Fern Farms unveiled its full range of grass-fed branded retail packaged venison products for the first time in China, further enriching the nation's high-end red meat market. The company is also committed to becoming a nature-positive producer with sustainability embedded in its business as China pursues an environmentally friendly and low-carbon development mode.

Last year, Silver Fern Farms launched its first Toitu Net Carbon Zero Certified beef range as a pilot project in the United States. Emissions associated with each kilogram of beef are tabulated by carbon removals sourced from vegetation on the farms of the company's suppliers.

"We are planning to review our packaging and look at designing and launching a more environmentally-friendly product to fulfill consumers rising demand with our partners in China. Under our Sustainability Action Plan commitments, we will eliminate coal from our processing operations by 2030 and halve our emissions from coal in the next few years," Limmer said.

With last year marking the 50th anniversary of diplomatic ties between China and New Zealand, and next year marking the 10th anniversary of the China-New Zealand comprehensive strategic partnership, enterprises from both countries are ramping up exchange and cooperation initiatives.

"With increasing demands from Chinese consumers for sustainable, healthy, and high-quality food, we will continue to provide a diverse range of premium grass-fed red meat products that satisfy their desires," Limmer said.