Royal jelly selling at a premium

Last updated 05:00 23/11/2014

EXPORT INROADS: Narissa Harvey, Happy Valley’s export sales and marketing manager, says royal jelly sales are up 70 per cent year-on-year.

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False claims dogging the Kiwi honey and bee industry have stung Auckland royal jelly producer Happy Valley over the years.

The Papakura-based firm began investing in production of the premium bee health supplement in 1990 and remains New Zealand's only harvester. But in 2010 fellow Kiwi firm New Zealand Natural Care Products breached the Fair Trading Act for misleading packaging suggesting their cheap imported Chinese jelly was made locally.

New Zealand Natural Care Products was fined $15,000 by the Commerce Commission but, four years later, Happy Valley is still cleaning up the sticky mess.

"For many years there wasn't a high demand or a large market for royal jelly because the price was at such a premium," Narissa Harvey, the family firm's export sales and marketing manager, said. "Happy Valley was the first company to see there was an opportunity for New Zealand royal jelly and stick it out - but it was a risk.

"The strategy was to invest in research into understanding why New Zealand's royal jelly is of a higher quality to help build a market. But at the same time, we had to fight off a lot of imported royal jelly being passed off as a New Zealand product. You had a price set in the market from imported products and it damaged the whole industry."

A source of amino acids and vitamins B, C, A and E, royal jelly is the nutrient-rich milk fed to the queen bee. The product is popular in Europe and Asia due to its perceived health and beauty benefits.

Happy Valley has worked hard to salvage New Zealand's tarnished reputation in this field and sales of the supplement, which is sold either fresh or frozen, are up by 70 per cent year-on-year, Harvey said.

Happy Valley exports the goopy substance to Qatar, Dubai, Saudi Arabia, Macau, Korea and Hong Kong, where consumers are willing to pay a premium. But while demand for royal jelly is high, its shelf life is an exporting challenge.

The product is good for three months when sold fresh or three years if purchased frozen. Happy Valley is working with scientists to find ways to extend the shelf life and open new markets.

New Zealand's royal jelly is believed to have a higher potency than European and Asian jelly. The company is working with scientists from Auckland University and overseas research institutes to understand how the nutritional value is affected by Aotearoa's unique environment.

"Right now we have limited scientific backing for what we know," Harvey said.

"We believe that the practice of feeding sugar to bees during the winter can impact quality. We don't have such a large practice of that in New Zealand because the bees are getting much more nectar flow, so we are researching that."

At $54 for a 10 gram vial, Happy Valley's high price is due to the manual work involved and New Zealand's higher labour costs. A working hive produces around 100 grams of royal jelly a month, and the milky goo has to be carefully siphoned out of the queen bee's chamber in a way that doesn't disrupt the hive.

Happy Valley hopes its royal jelly can emulate its success in the manuka honey market. The company exports its honey and skincare products to 16 markets, and has increased its turnover by an average of 33 per cent each year over the past five years.

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Again, the company has had to fight bad press about competing claims - this time about the antibacterial qualities of manuka products. To counter this, Happy Valley has invested in quality assurance by joining the UMF (Unique Manuka Factor) Association, which tests the viability of all of its members' honey. Consumers are able to read the UMF test results through the Happy Valley website.

"International customers - particularly in markets where there's been a lot of publicity about issues surrounding honey such as in the UK, US and Hong Kong - are using our site," Harvey said.

Entering new markets has been a challenge. When Happy Valley first began shipping honey to the US, authorities deemed the packaging to contain "offensive words". The costly mistake required the containers to be re-labelled.

"The key learning was that every market is different, and there is quite a lot of work that needs to be done before each shipment to understand each market," Harvey said. "There are agencies that offer a service where you can get everything checked out before exporting, but they're quite expensive and we took the risk by not using one, and we learned the hard way."

Happy Valley now uses agency ExportX to sell to the US, UK and Canada through Amazon.

"ExportX helped us with our price and our positioning. We can see who we are competing with in terms of [false] claims in the market, and it's helped us be more visible," Harvey said.

"The size of the US market and the high value of our product make the traditional distribution model hard to work for us. ExportX streamlines the distribution costs to the point where we've found it's actually affordable, and we can be competitive."

Unlimited magazine, published by Fairfax Media, is New Zealand's leading digital business magazine dedicated to entrepreneurs, start-ups, leaders and innovators.

- Unlimited

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