GIFT­ING THE BEAU­TI­FUL HONEY

PURE MANUKA HONEY, THE COM­PANY BE­HIND THE ‘ UL­TRA- PRE­MIUM’ THREE PEAKS BRAND, HAS CRE­ATED NOT JUST A NEW PROD­UCT CAT­E­GORY, BUT A SOLID SALES STRAT­EGY INTO CHINA.

NZ Business - - CON­TENTS - BY GLEN BAKER

Three Peaks honey rep­re­sents both a new prod­uct cat­e­gory and a solid sales strat­egy into China.

It’s well known that the Chi­nese are among the world’s most health con­scious con­sumers.

This is re­flected in China’s in­sa­tiable de­mand for health food – es­ti­mated to be worth a hearty US$29 bil­lion per year.

Ac­cord­ing to Chi­nask­inny.com, Chi­nese con­sumers are also trad­ing up to health­ier ver­sions of tra­di­tional food­stuffs. More than 30 per­cent are pre­pared to pay a pre­mium for bet­ter qual­ity and typ­i­cally health­ier food items such as dairy, meat and seafood.

Honey, more specif­i­cally Manuka honey with its medic­i­nal prop­er­ties, is one of the prod­ucts lead­ing this health drive – rep­re­sent­ing a mas­sive op­por­tu­nity for New Zealand’s pro­duc­ers.

De­spite Aus­tralian claims to the con­trary, Manuka honey is a uniquely New Zealand prod­uct and brand. The UMF (Unique Manuka Fac­tor) on each jar re­lates to the pro­por­tion of unique sig­na­ture com­pounds found within gen­uine Manuka honey – lep­tosperin, di­hy­drox­y­ace­tone (DHA) and methlgly­oxal (MGO).

This medic­i­nal tril­ogy helps make up the UMF, which has be­come the in­ter­na­tion­ally recog­nised qual­ity mark guar­an­tee­ing au­then­tic­ity and a global stan­dard in iden­ti­fy­ing and mea­sur­ing the highly prized, dis­tinc­tive char­ac­ter­is­tics of Manuka honey. The UMF scale typ­i­cally ranges from 4+ to 24+.

New Zealand’s to­tal honey ex­ports are cur­rently worth $242 mil­lion per year – of which Manuka makes up around 80 per­cent. The govern­ment’s tar­get is to reach $1.2 bil­lion by 2028.

How­ever, reaching such dizzy ex­port tar­gets is not pos­si­ble just by in­creas­ing pro­duc­tion and adding more ‘ me too’ com­mod­ity-level Manuka honey to the plethora of plas­tic jars that are al­ready out there. Be­sides, for that to hap­pen the honey bees need to be at their pro­duc­tive best – and lately that’s been a se­ri­ous is­sue.

The key, ac­cord­ing to Pure Manuka Honey, a wholly-owned sub­sidiary of the Perry In­ter­na­tional Trad­ing Group, is to stay away from that pricedriven su­per­mar­ket end of the mar­ket and cre­ate a whole new cat­e­gory of ‘ul­tra-pre­mium’ Manuka honey, pri­mar­ily tar­get­ing China’s cor­po­rate gift­ing mar­ket.

That’s ex­actly what the com­pany is do­ing un­der its dis­tinc­tive Three Peaks brand, launched in Septem­ber 2016.

Three Peaks refers to Mount Ruapehu, Ton­gariro and Ngau­ruhoe in the Ton­gariro Na­tional Park. The re­mote, rugged and in­trin­si­cally pure cen­tral North Is­land plateau and South Waikato re­gion is where Three Peaks har­vests its Manuka honey and man­ages its sus­tain­able api­ary model.

The Perry fam­ily is on a mis­sion to buy farms and re­gen­er­ate them back to na­tive bush, se­cur­ing high-yield­ing Manuka honey pro­duc­tion and con­tribut­ing to sus­tain­able land man­age­ment. This pro­vides a com­plete land-to-brand of­fer­ing for Three Peaks. They cur­rently have around 1400 hectares un­der their con­trol.

“Our op­er­a­tion is broader than look­ing af­ter the land for the bees’ sake,” ex­plains Peter Bot­ting, CEO of Perry In­ter­na­tional Trad­ing Group. “For us pro­duc­tiv­ity comes through a bet­ter eco-sys­tem, en­cour­ag­ing in­dige­nous species (in­clud­ing ki­wis), tree re­gen­er­a­tion, and elim­i­nat­ing pests,” he says. “It’s all about be­ing re­spon­si­ble cus­to­di­ans.”

So what ex­actly does ‘ul­tra-pre­mium’ mean in a mar­ket that has long been de­fined by just ‘pre­mium’ prod­ucts?

Bot­ting an­swers that ques­tion with a sam­ple of Three Peaks 20+UMF honey in a dis­tinc­tively ta­pered glass Ton­gariro Jar – de­signed in New Zealand and shaped to rep­re­sent a moun­tain and the en­vi­ron­ment from which its con­tents are sourced. I can see it would make a stun­ning gift. Bot­ting then pro­duces a com­plete pre­sen­ta­tion gift-box. Its lux­ury pack­ag­ing and at­ten­tion to de­tail – ex­plain­ing the Three Peaks ‘story’ – in­stantly con­firms the po­ten­tial, and bril­liance, of the brand’s ul­tra-

pre­mium mar­ket­ing strat­egy. As well as the wis­dom in choos­ing not to par­tic­i­pate in the lower value chain.

“We set out to pro­duce this beau­ti­ful, valu­able prod­uct to the high­est stan­dard we pos­si­bly can. Then we present it to the mar­ket in a for­mat that re­flects the Three Peaks val­ues,” he says. “Au­then­tic­ity and qual­ity are our high­est pri­or­ity.”

It may be an ex­pen­sive road to nav­i­gate in terms of pro­duc­tion, and re­quires both willpower and fi­nan­cial for­ti­tude but the re­wards are well worth it, Bot­ting adds. Three Peaks has been well re­ceived by tourists at New Zealand’s high-end re­tail­ers and lux­ury ho­tels, as well as in China and Ja­pan’s lux­ury con­sumer mar­ket.

“Over­seas cus­tomers con­duct their own ‘coun­try of ori­gin’ re­search to sat­isfy them­selves that you’re a trusted brand in your own coun­try,” he says.

IT’S ABOUT EX­PORT

Se­cur­ing their first sub­stan­tial ex­port or­der to tap into China’s gift­ing chan­nels was a ma­jor mile­stone for the Three Peaks brand.

“In China cor­po­rate and per­sonal gift­ing are two very strong themes that are cycli­cal through the year. While the au­thor­i­ties there have clamped down on cer­tain lux­ury gift items such as cham­pagne, Manuka honey fits beau­ti­fully with the well­ness story. It also works ex­tremely well with the cat­e­gori­sa­tion of the UMF hi­er­ar­chy,” ex­plains Bot­ting.

So the more im­por­tant the re­cip­i­ent, the higher the UMF in the gifted honey.

The UMF grad­ing sys­tem is fast be­com­ing ac­cepted across bor­ders. Ev­ery batch of Three Peaks prod­uct is cer­ti­fied by the UMF Honey As­so­ci­a­tion to be au­then­tic and true to the UMF la­bel value, he adds. “Which re­quires all our honey to be in­de­pen­dently tested by An­a­lyt­ica Lab­o­ra­to­ries.”

Go­ing for­ward, Three Peaks is also tar­get­ing Tai­wan, Sin­ga­pore, Hong Kong, Ja­pan and ul­ti­mately the US.

In China it has a busi­ness unit op­er­ated by Chi­nese na­tion­als out of Bei­jing, and Bot­ting be­lieves, although ex­pen­sive, it’s key to the brand’s ex­port strat­egy: an off­line dis­tri­bu­tion model util­is­ing a spe­cial­ist mas­ter in-mar­ket dis­trib­u­tor, while main­tain­ing tight con­trol over the on­line (e-com­merce) rights.

It’s no secret that there has been a slow­down in sales across the Manuka honey sec­tor in re­cent times – caused pri­mar­ily by Chi­nese au­thor­i­ties tough­en­ing up food im­port reg­u­la­tions in an ef­fort to boost qual­ity, and ap­ply­ing taxes to the ‘daigou’ chan­nel, which op­er­ates in the

We set out to pro­duce this beau­ti­ful, valu­able prod­uct to the high­est stan­dard we pos­si­bly can. Then we present it to the mar­ket in a for­mat that re­flects the Three Peaks val­ues.”

grey mar­ket (es­sen­tially Chi­nese based in New Zealand buy­ing small amounts of whole­sale prod­uct and send­ing it via post to China con­sumers).

While ac­knowl­edg­ing that the Three Peaks brand, like all prod­ucts in New Zealand, re­lies on daigou op­er­a­tors to boost sales, Bot­ting firmly be­lieves his brand’s dis­tri­bu­tion strat­egy is rock solid. Three Peaks takes ad­van­tage of China’s Free Trade Zones to trade through the coun­try’s pop­u­lar e-com­merce plat­forms.

“It’s easy to con­trol and doesn’t re­quire us to be a wholly for­eign-owned en­ter­prise (WFOE) in China’s do­mes­tic mar­ket,” he says. “We con­trol the sup­ply-chain and de­liv­ery to the cus­tomer, as well as the pric­ing model on the e-com­merce plat­forms.”

Go­ing for­ward, the brand’s China strat­egy in­cludes part­ner­ing with a lead­ing me­dia en­ter­tain­ment com­pany to bring Chi­nese celebri­ties to New Zealand to help launch and dis­trib­ute a spe­cific ‘sin­gle-use’ prod­uct into main­land China. The celebri­ties will enjoy New Zealand’s at­trac­tions, tour Ton­gariro Na­tional Park, be ed­u­cated on the Manuka honey in­dus­try, and broad­cast live to their fol­low­ers on so­cial me­dia.

“So not only are we re­defin­ing pack­ag­ing and the way Manuka honey is positioned and pre­sented to the mar­ket, we’re seek­ing to rein­vent the old mod­els of ex­port,” says Bot­ting.

“Our big­gest chal­lenge is to cre­ate a sta­ble her­itage brand and move fast enough to keep up [with the mar­ket].

PETER BOT­TING

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