The firm, a joint venture by Australasian meat companies, supplies about 65% of NZ lamb going into the US and 90% of NZ lamb going into Canada as well as venison, beef and goat meat.
The value of products should continue to rise, boosted by three value-add processing plants strategically placed in North America and providing products being sought by consumers.
The Lamb Company is mostly owned by three large NZ meat processors, Alliance, Silver Fern Farms and Anzco, and has been active there for 60 years.
The US is already the highest-paying market for NZ lamb, with an average value of $17.79/kg in the latest June 30 year and a 24% year-on-year gain in overall value.
It is the second biggest market for lamb, behind China but going ahead of Britain by value in the latest year.
Demand for grass-fed, premium red meats will continue to grow exponentially in North America but Ruffo said he will be surprised to see much further lift in NZ lamb export volumes there because of our static sheep numbers.
For the same reason, the growth potential for lamb from the work Beef + Lamb is doing with its Taste Pure Nature promotion aimed at conscious foodies in California might be limited.
The Lamb Co has decades of market research and development for its own NZ Spring Lamb brand and is in talks with B+LNZ aimed at an agreement to be involved.
The business sells about $300 million of French racks, legs, shoulders and loin products in affluent sectors of the market under the NZ Spring Lamb brand. The brand is about 30% of the group’s North American business.
The US values might grab the headlines but Canada, where the company is based, is also a large and very important market. It is the sixth biggest individual market for NZ by volume and value.
Two Australian meat companies, Wammco and Southern Meats, now own shares in the business and large volumes of Australian lamb, mutton, and beef are sold through The Lamb Co as well. It also markets product from non-shareholder suppliers, enabling it to ensure year-round supply and service.
The company also provides products for private label programmes for leading North American retail supermarket and food service operators and has started to market individual shareholder brands.
At the premium end of the lamb market, where the group trades, there has been no impact from alternative meat products, Ruffo said.
“All our products are supported by the attributes today’s consumers are seeking, including 100% grass-fed, antibiotic-free, humanely treated and sustainably raised.”
That applies to both the leading NZ and Australian country origin brands.
Premium, grass-fed beef is a growing part of turnover in recent years, now making up 20% of the total 50,000 tonnes annual sales.
“The market for premium, grass-fed beef remains significantly underdeveloped and will account for the majority of our growth due to the expected lamb supply constraints.”
The beef market in North America is 40 to 50 times the tonnage of lamb and has enormous potential for The Lamb Co.
“I envision the day when beef will represent a much larger portion of our total North American business than lamb,” Ruffo said.
The Lamb Co has just built a state-of-the-art processing and distribution operation near Philadelphia, in the northeast United States, as well as expanding its further processing facilities in Toronto and Los Angeles. A marketing and packaging refresh has also taken place.
The business was restructured four years ago, combining the Canadian and US companies into one stronger North American organisation and developing the beef marketing arm. It employs 236 people.
