Jun 12, 2025
DINZ CEO Rhys Griffiths (centre) with, from left, Felix Shen, Damon Paling and representatives from the China Nutrition and Health Food Association.
DINZ Chief Executive Rhys Griffiths shares some thoughts after returning recently from China, where meetings revealed both exciting market potential and growing challenges.
Part one: China’s health giants and the promise of scale
Our meetings spanned the country’s most iconic traditional health food companies — Dong’e Ejiao, Beijing Tong Ren Tang, Shandong Hongjitang, and China Sinopharm. These names are synonymous with heritage, quality, and consumer trust across generations. Some of these firms turn over billions annually and are leaders in China’s wellness and traditional Chinese medicine sectors.
What was encouraging is their recognition of New Zealand velvet as a premium ingredient. Many are extending their ranges through new product development (NPD), featuring New Zealand deer velvet. Most view cross-border e-commerce as the fastest pathway to market for finished goods containing ingredients such as deer blood, bone, placenta, tail, and pizzle — but the long-term aspiration is clear: offline retail through pharmacies, health stores, and mainstream supermarket chains.
Some of these companies look closely at South Korea for cues on consumer preferences, product formats, and how to build emotional appeal with end users. Whether it’s the use of sachets, ampoules, or multi-ingredient blends, or leveraging quality marks and scientific claims, the more mature Korean market serves as a testbed and inspiration point for innovation in China. There is recognition amongst these Chinese companies about how Korean brands have successfully used functional claims, trust symbols, and packaging design to win over consumers and differentiate in crowded wellness categories.
However, it’s not a fast lane. These are large, complex organisations with extensive NPD pipelines and internal evaluation processes. Competing for attention alongside dozens of projects means it will take time and persistence. That said, they bring what we cannot: household brand power, vast distribution reach, and deep consumer engagement in China.
One recurring message was the importance of sponsors within China to advocate for regulatory change. Such sponsors are key to unlocking progress in formal regulatory updates — such as changes to the China Pharmacopoeia, the National Standards catalogue, and the Food-Drug Homology list. These relationships — or “guanxi” — help advance conversations with the right officials, in the right way, at the right time.
Part two: Market pressures
On the other side of the ledger, Chinese commodity players flagged alleged increases in volumes of Russian reindeer entering the country via the porous border in Heilongjiang Province. While technically subject to restrictions, any influx may affect the entire market and the value proposition of premium New Zealand velvet.
Adding to this, we received repeated feedback that last season New Zealand frozen velvet sizes were often too large for the China market. Market preference is for velvet harvested at around 55 days – producing a more suitable (smaller) size for value-added processing in China. The message from China is clear: grade in New Zealand to match the needs of the China market, who want smaller sized velvet, rather than the larger sticks destined for South Korea. From a New Zealand viewpoint, that’s where the value should be captured – onshore, at the farm gate, and through the value chain.
But there’s a catch. A signal must come from China. If overseas buyers want to incentivise smaller, better-aligned grades, compared to last season, then they must reward those choices with price. Clear pricing differentials will create the right incentives for New Zealand farmers to align harvest practices to market expectations.
Where to from here?
The China market continues to hold significant potential, but real progress will require coordinated effort. On the one hand, DINZ will keep engaging at the strategic level with China’s top health companies and other partners. On the other hand, our farmers and exporters must work together to align product specifications and expectations – particularly around size, grade and processing compatibility.
As ever, the integrity of our supply chain and the premium positioning of New Zealand velvet depend on listening to our markets, responding with agility. China is changing, and so must we.
