Speaking at the Deer Industry conference in Timaru Jager, the former Zespri chief executive, compared the deer industry model to the highly successful kiwifruit industry, looking at whether venison could become the next kiwifruit.
The two have a lot in common but venison lags on several counts.
“Being small is your opportunity but it is your challenge,” Jager told more than 200 farmers and industry representatives.
Both are niche products with virtually no domestic market and some pretty tough competition when it comes to international brand-fixing, marketing and innovation.
New Zealand is on the edge – distance to market, land costs, labour costs, exchange rate, scale constraints, capital constraints, population density and infrastructure are all limiting factors.
“There is reason to believe that what you have is sustainable but there is choice for a more prosperous future.
“Being different isn’t good enough – it’s being sustainably different,” Jager said.
“You are served well by DINZ and the Passion 2 Profit porogramme is a good, strong starting point but you are not spending enough and don’t have enough value in place to capture required investment.”
The basis of competition is in the value-added space where factors that make a product different are valued by consumers and that is difficult to do.
“Value-added is hard, otherwise everybody would be doing it.”
While the deer industry has reasonable profitability venison is not well known and its productivity is not a strength relative to competitors such as sheep or beef.
“While this creates opportunity to differentiate – meat is tough to differentiate, especially in a tiny category and as a result you have inadequate investment in innovation and market development.
“Investment and activity must align with scale and the challenge there is if you make the investment can you capture the value?
“If you believe in your product and what makes it the best – with a collective determination – maybe.”
To grow the deer industry needs increased investment in innovation, consumer insights, product formats and packaging, genetics, productivity and quality.
The investment mechanism must mitigate against freeriders and be able to be leveraged with scale.
“You will need to build some barriers to entry by aligning innovation and marketing investment with ownership of genetics, product formats, brands and channels.
“That is a big mountain to climb – tough, but possible.”
Deer farmers have a choice – to continue on the current road, which should continue to deliver an economic equilibrium with sheep and beef or to take decisive action to grow volume and value.
“To climb this mountain you need collective determination, a really good competitive product and an industry structure than enables investment and captures the value of that investment.
“You will need to innovate faster than the competition in the areas of productivity, quality, consumer understanding and product development and to invest heavily in sales, marketing and market development.”
Jager suggested the deer industry’s most likely future would be continuing on the same path for the next 20 years.
“But that is not all bad, your current industry is not a bad one.”
