China: Companies refute campaign criticism

Meat processors have strongly defended the Taste Pure Nature campaign following claims there is little awareness of New Zealand grass-fed beef and lamb in the Chinese market. Glenys Christian reports.

Meat companies have doubled down in their defence of Beef + Lamb’s Taste Pure Nature campaign in China.

They say it’s a crucial part of their being able to build awareness of grass-fed New Zealand red meat in that market.

ANZCO Foods general manager of sales Rick Walker said it was an investment by NZ farmers and processors.

“It is absolutely the right thing to do.”

Taste Pure Nature was very much part of the strategy to get NZ products to be seen as premium, which had been proven around the world.

He was responding to an opinion by Shanghai-based NZ marketer, Hunter McGregor (Country-Wide November, p22).

In it McGregor claimed there was little awareness of NZ grass-fed beef and lamb in the Chinese market, and it was sold at a discount to grain-fed products, including Angus grain-fed beef from Russia. He believed Taste Pure Nature would achieve very little as Chinese consumers no longer saw foreign-produced food as being superior to that produced locally.

But Walker said repeat promotions of chilled beef ANZCO Foods had run over the past 10 months with retailers in Beijing. It exceeded expectations both in sales and consumer feedback. It planned to refresh the promotion through two key retail chains every six months to draw in more customers. It had already benefited from Taste Pure Nature because a wider range of consumers were directed to where they could find the company-branded product.

Grain-fed beef was perceived to be premium as the United States and Australia were first into the Chinese market so had a head start. They’d also spent a lot of money on their product promotion. While five years ago the message was not to try to sell grass-fed beef and lamb in the US, consumer perceptions were altering as they increasingly saw sustainability of farming systems as an important factor.

“We are going to see the same thing in China.”

They were starting the educational process and by connecting with consumers they would go and try grass-fed.

Over the past 18 months the company’s Chinese sales had increased.

Although it was expected there would be a spike in demand coming out of the first promotion, it was pleasing to see that the baseline was higher, meaning more customers were likely to try grass-fed meat for a second time.

Starting at the top

A recent promotion in the high end City’Super supermarket chain had concentrated on educating shoppers about cooking chilled French racks of lamb. Because the market was very small ANZCO Foods was starting its marketing at the very top end. And while such a cut might appeal to only a very small proportion of the population who wanted to learn how to prepare it, the hope was that by doing so they would gain an appreciation of lamb generally and want to continue to learn more about other cuts.

Walker said with beef most frozen exports had been sold into food service rather than chilled. Many Chinese were not confident or comfortable about being able to cook Western cuisine such as a rib-eye steak. Secondary cuts were more suited to local cuisine to be used in dishes such as hot pots.

While it is hard to put a timeline on how rapidly Chinese customers might follow those in the US in their appreciation of grass-fed red meat Walker said it was a very fast growing market.

“Our only limitation is that we don’t have enough plants licensed by the Chinese to supply what’s required.”

Silver Fern Farms’ (SFF) chief customer officer, Dave Courtney, said the company is working with Beef + Lamb and Taste Pure Nature reinforced what was good about the NZ product.

“They complement each other,” he said.

While the campaign built awareness of the grass-fed red meat category allowing potential customers to learn a little about it, companies could then follow up by offering their branded product.

“There’s no doubt there’s work to be done to build awareness of grass-fed,” he said.

“But we see great potential in building on that. All the signs are, this is the right way to go and we have to invest.”

In the US there was much faster growth now in grass-fed rather than grain-fed red meat as well as the emergence of a small local grass-fed industry.

SFF had a team of 20 based in the Chinese market so there was plenty of opportunity to build awareness of the New Zealand product. At present 85% of that sold in China was handled from this country and just 15% there. But from the middle of next year that would switch to 100% of business being conducted out of China. There were big advantages with being in the same time zone, having the same language and intimacy with the market.

Expanded product range

While SFF had started selling frozen beef through Goodfarmer outlets several years ago, that had now expanded to 15 different products such as lamb racks, shoulders, hot pot rolls and chilled beef. It had more recently begun selling through premium retailer, Hema, which is owned by AliBaba and combines four retail stores, restaurants and online distribution in the southeastern city of Shenzhen. It promises that once meat is ordered it will be delivered within 30 minutes to the waiting customer.

As well as using online channels Tik Tok and J.D.Com the company is also selling through 280 offline stores. And advertising on television screens in 5000 elevators in selected city areas allows it to target a potential audience of 5.8 million people.

It was involved with Taste Pure Nature in both online and in-store channels where messages were aligned quite clearly, he said.

“There’s real value in the relationship because we can drive it together. And the grass-fed story underlines everything we’re talking about.”

Alliance Group sales general manager Shane Kingston said as NZ’s largest lamb processor and exporter it had been operating in China for more than 20 years, alongside its partner Grand Farm, and had an intimate knowledge of the market.

The campaign is helping to underpin the company’s marketing programmes in China and enhancing the positioning of their product portfolio so they can capture more value for NZ farmers.

Its marketing campaign with Taste Pure Nature began in China in September with feedback from partners, customers and consumers being positive.

“Our initial focus has been in premium outlets in Hangzhou, Beijing, Tianjin and Grand Farm’s flagship store in Shanghai,” he said.

“Our lamb product range has included flap cubes, barbeque ribs, lamb skewers, shoulder racks, Silere lamb skewers and legs.”

In conjunction with the launch of its Pure South produce in these supermarkets, Alliance partnered with Beef + Lamb New Zealand to introduce Taste Pure Nature themes in-store. This included extensive point-of-sale material on the freezers, floor and tasting booths, and creating clear Taste Pure Nature zones.

“Promotional staff were also trained on key attributes such as grass-fed, taste and nutrient-density.”

Greenlea Premier Meats managing director Tony Egan, who is also a Beef + Lamb director, said McGregor raised some valid points.

“But anything that increases the awareness of New Zealand’s grass-fed beef and lamb is good.”

Taste Pure Nature had been the catalyst for Greenlea’s collaboration with SFF and ANZCO in a supermarket chain promotion of their products in Chengdu, which was helping to develop the market.

He said they have some good stories to tell.

“We’re doing that more and taking our products to a more sophisticated level.

While meat companies needed to take responsibility for themselves, wider promotions also had a role to play in reinforcing marketing messages.

“A rising tide lifts all boats.”

Targeting 1% of a billion

Walker said the Taste Pure Nature campaign was exceptionally important.

“There aren’t many markets like China left and we have the opportunity to educate consumers from the ground up.”

Despite the strong affiliation of NZ’s image with quality dairy products there was poor understanding of what the country was doing in beef production.

“We aren’t trying to target one billion people,” he said.

“One percent of the population is a big enough market for us.”

Taste Pure Nature had a full suite of communication tools available to meat companies such as in-store tastings and videos. Chefs and influencers were used as well on social media site WeChat. And out of store advertising such as advertising on elevator doors in apartment blocks and commercial offices was being used within a two to five kilometre radius of where the NZ product could be tasted.

While ANZCO Foods had cancelled a planned promotion in 2020, this year it was finding China an easier market than the United Kingdom or Europe when it came to supply chain challenges.