Thursday, March 28, 2024

Deer velvet demand grows in Asia

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New Zealand deer velvet is selling amidst global uncertainty as Korean product companies meet new consumer demands with NZ velvet.
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Deer Industry NZ (DINZ) markets manager Rhys Griffiths says while the covid-19 pandemic has put pressure on the supply chain, NZ deer velvet is being sought for new products.

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

That is a good space to be in right now as consumer demand for NZ deer antler velvet is firming in the main markets of South Korea and China, as well as new growth in Taiwan.

This has been reflected in some reasonable sales of the new season’s crop, Griffiths says. Albeit with some easing of prices from the close of last season.

Many Korean consumers take red ginseng products regularly, but Griffiths says when they want something more powerful, they are going for a product that contains deer velvet.

Major consumer product companies are catering for this demand, with several realising new products based on NZ deer velvet.

Online sales of these products are 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 suppressing covid,” Griffiths said.

Despite this good news, 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 need to finance their purchases in an environment where covid remains a real risk and those who are financing purchases are applying a risk premium because of the pandemic.

“So, we have seen prices ease in the early season contracts relative to prices at the close of last season,” Griffiths said.

The deer industry has made a concerted 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 harvested to meet new market standards.

The industry’s latest initiative, VelTrak, an electronic traceability system will be introduced for all velvet from next season.

This system 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 said.

Genetic improvement in existing deer herds is leading to modest increases in velvet production and while there is growing market demand, Griffiths says the industry is not looking for new entrants to velvet production.

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