18 July 1994 NZ Must Heed Changes in International Sheepmeat Markets

New Zealand's sheepmeat export industry must heed dynamic changes taking place within international markets, says a Lincoln University discussion paper.

Published by Lincoln University's Agribusiness and Economics Research Unit, the paper written by Rodolfo Nayga and Daniel Waggoner, both of Massey University, reviews a wide range of issues affecting meat markets in general and sheepmeat exports specifically.

Diversification of products due to changes in dietary preferences through to more ethnic diversity within countries has meant that sheepmeat is competing with a widening variety of meat and other food products for consumers' disposable income.

Successful competition for consumers' disposable income will be achieved through greater consumer-led product differentiation and the enhancement of New Zealand's competitive advantage in the sheepmeat sector plus greater cost efficiencies and greater offshore margin capture, says the paper.

The need to overcome actual and potential obstacles is one of the key points made by the researchers. The most troublesome of these include:

• Legal barriers such as health and sanitary laws that act as non-tariff trade barriers.
• Social factors and cultural differences that affect meat consumption patterns in foreign markets.
• The relative distance of New Zealand from many of the faster growing export markets for meat.
• Protectionist policies by importing countries and entities that either restrict total imports or reduce the New Zealand share of total imports.

Changes in people's lifestyles have had a dramatic effect on New Zealand's sheepmeat exports. The report indicates three main demographic and socio­ economic points that have had a direct effect on export quantities:

• The increased number of married women working outside the home, which has heightened demand for convenience foods and services such as extended shopping hours and home delivery.
• An aging population, especially in industrialised nations, which affects the type of foodstuffs demanded.
• Greater world travel and ethnic diversity, which increases demands for a wider variety of foodstuffs.

Taken together these compel the sheepmeat industry to "cross the threshold of contemporary food marketing", says the paper. A more targeted marketing strategy providing for specific wants and needs of the consumer, will be crucial to the successful international marketing of New Zealand's sheepmeat. As far as New Zealand's nearby Asian markets are concerned, the paper looks at Hong Kong, Taiwan, China, Korea and Japan. Overall it sees these markets as opportunities for increasing sheepmeat exports.

In Japan, for example, rice consumption is declining while meat consumption is on an upward trend. Restaurants in Japan have also begun using a greater variety of meat cuts, e.g. red meat menu items have increased from approximately one item (usually steak) per restaurant to about ten items.

At present the Middle East bloc accounts for close to one quarter of the world's import of sheepmeat. With approximately 45°/o of its population of about 309 million under 14 years age, and the population still growing, this region presents significant opportunities for New Zealand's sheepmeat exports, states the paper.

The authors say that in the case of Egypt, as its tourist market expands there will be opportunities for New Zealand to increase its market share of meat products, including sheepmeat.

Overall internationally, given appropriate market development efforts, New Zealand can look forward to an increase in high quality sheepmeat exports, but while many areas of the world hold potential, markets must be continually explored, developed, serviced and enhanced to gain the maximum share for this country's products, says the paper.

The full discussion paper, entitled "Competing in the Global Marketplace: Issues, Trends and Challenges Facing New Zealand's Sheepmeat Industry", is available from the Agribusiness and Economics Research Unit, PO Box 84, Lincoln University, Canterbury.

Jason Mortland, Lincoln University. New Zealand.

Ian Collins, Journalist, Lincoln University, New Zealand.