Success of value-added products pays off for farmers
Farmers are $4 million richer through delivering more high value meat to Silver Fern Farms.
The company has passed the 1 million mark for livestock supplied into its value-added supply programmes in a 12 month period.
Chief executive Dean Hamilton said the milestone was positive for Silver Fern Farms suppliers.
"As part of our Plate to Pasture strategy, we are focused on successfully building branded, differentiated products and then linking these consumer programmes directly with livestock supply programmes – creating that market-based linkage from consumer to farmer," he said.
"Passing 1 million stock units into value-added programmes is an important milestone recognising the unique scale that has been achieved in these contracted supply programmes across beef, lamb and venison. This represents a greater than 30 percent growth on last year," he says.
General manager of sales, Grant Howie, said demand for value-added ranges had been strong.
"Programmes like our Silver Fern Farms Reserve Beef have linked farmers to the needs of consumers through the feedback and market derived premiums they receive through the Beef Eating Quality (EQ) grading process," he said.
"Demand in China in particular is growing very fast. Our Venison Global Retail programme and our North American Anti-Biotic Free lamb programme have given farmers in those programmes a path to market that taps into discerning consumers, and provides our farmer partners with value-added returns.
"In the past 12 months we have paid out $4m in additional premiums above operating prices to suppliers in our contracted value-add programmes."
Hamilton said Silver Fern Farms intended to continue to grow its value-added sales, and with that their differentiated supply programmes.
"Premium consumers around the world are increasingly discerning and we know they will pay a higher price for natural food where the attributes can be guaranteed by a New Zealand brand they can trust. We have a number of new initiatives planned over coming months that will drive further growth in our programmes."
The company was also making investments in traceability to link consumers of its premium retail products back to the farm.
Hamilton said the investment would support the growth of the company's Silver Fern Farms branded products.
"We want to deliver transparency in the food chain for our consumers who are increasingly interested in knowing where their food has come from and that their food has been produced safely, with care and in a sustainable way.
"The investment is across our chain of care, and in linking those elements together."
Retail packaging that was being progressively rolled out in both domestic and international markets would have two new traceability features.
A unique, fraud-proof, QR code on every pack would allow the consumer to scan the code to verify that it is an 100 per cent authentic Silver Fern Farms product.
It would also show which region in New Zealand the product came from, link the consumer to supplier stories and recipes for the product.
"Secondly, we have been working with New Zealand origin verification company Oritain for more than three years to develop a scientific traceability system for our products to provide proof of origin certification for our consumers," Hamilton said.
"Through linking with Oritain our new retail packaging will be able to provide absolute confirmation to the consumer that the product is true to our "100 per cent made of New Zealand" commitment.
"We're excited by these new and innovative consumer-facing traceability developments and the further trust this will build with consumers and Silver Fern Farms."
Howie said investing in robust systems through the supply chain was becoming crucial for food producers.
"Ultimately we would like to provide traceability from the consumer to the individual farm. We're investing now to create that opportunity in the future."
"We can certainly see a time when premium consumers will want to know how that farm is sustainably operated, what care has been provided to the animals, and the environmental aspects of the farm. The vehicle for that information we believe will very likely be FarmIQ – the online central information hub we developed in a Primary Growth Partnership with the Government and Landcorp.
"The use of the FarmIQ platform is growing strongly amongst New Zealand farmers, with over 1,400 farms now using it. Silver Fern Farms has invested over $5m in the last seven years in developing the software, and we're pleased to see the broad industry uptake.
"Allowing a consumer of our Silver Fern Farms product to "look into" information from a farm that grew the product will provide that next level of food trust and authenticity with our brand."