Velvet Market Development
Velvet Market Development
Velvet antler is one of the most prized ingredients in traditional oriental medicines in both Korea and China. Because consumers in these countries know the value of velvet and understand its benefits, they are the core market for NZ velvet.
Thanks to the work of the NZ deer industry over many years, Korean buyers now pay a premium for NZ velvet over competing suppliers, when once it was sold at a discount. Two things have made this possible – New Zealand’s reputation for food safety and buyer recognition that NZ velvet is a high quality product.
In recent years:
- The businesses of oriental medicine doctors in Korea have come under pressure
- Major food and beverage companies in Korea have become increasingly interested in securing NZ velvet as an ingredient in their tonics and health drinks
- China is rapidly emerging as a major end market for velvet – previously it was mainly a processor for on-selling to Korea.
Velvet exporters and DINZ have made the most of these trends. For four years there were steady increases in velvet prices and supply, with a price plateau reached in 2015/16.
Healthy food companies in Korea now account for around 25% of NZ velvet production, with one company accounting for nearly half of this. This trend is important, because these companies are seeking stability in supply and pricing, and prefer to deal direct with the NZ exporter.
A Korean Ginseng Corporation promotional display for a premium branded product based on NZ deer velvet and Korean red ginseng. Companies like KGC value stable supply and pricing, and prefer to deal direct with the NZ exporter.
More Oriental Medicine Doctors, healthy food companies and consumers understand the key attributes of New Zealand velvet:
- Produced in a clean, green and free-range farming environment
- Strict animal welfare controls for removal
- Robust quality control throughout the supply chain
- Absence of many diseases found in other parts of the world
- Safe ingredient for their customers to consume
- Consistent quality and good overall industry structure.
From 2015-2020, with velvet production growing, the challenge is to further build demand so that velvet production remains profitable. DINZ will:
- Continue to build a preference for NZ velvet among oriental medicine doctors in Korea
- Work with others to gain acceptance for NZ velvet in China as a healthy food ingredient
- Support healthy food companies in Korea and China with their product development work and sales promotions
- Fund research to support health claims that can be used by all market participants.
From 2015-2020, DINZ will invest about $500,000 a year in velvet market development. The actual spend will depend on when we are successful at breaking into the Chinese healthy food market. Promotional funds will be held in reserve for this.