NZ egg and poultry suppliers talk to FMCG about recent developments in the industry.

Consumers value eggs and poultry products as an affordable, nutritious source of protein. Many also take animal welfare issues into consideration, which has resulted in more and more free range offerings.

New Zealanders consume some 1.6 million dozen eggs per week*; this is the equivalent of 87 million dozen per annum.

In the last 12 months supermarkets sold 40.7 million dozen eggs. This equates to around 47% of egg sales. A large number of eggs are still sold in other retail outlets such as fruit and vege outlets and farmers markets.

“Egg sales through supermarkets now total $161 million, making eggs one of the largest supermarket categories in revenue terms – even more important in profit terms given the good margins they generate,” says Hamish Sutherland, Zeagold Foods’ general manager – Sales & Marketing.

He adds: “The overall market within supermarkets is growing at +0.8% in volume (dozens) and +6.7% in value ($) over the last 12 months**. Within the market, specialty eggs continue to grow at a faster volume than standard eggs. Growth in free range eggs is being offset by a slight decline in cage eggs.

“Despite the growth in speciality eggs, cage eggs still make up by far the majority of eggs sold with 77.4% of the volume. While they are growing at a faster rate, free range and barn account for only 14.9% and 5.1% respectively of volume share in the total egg category. Other specialty eggs, such as organic eggs, account for the balance of the market,” says Sutherland.

*Source: Egg Producer’s Federation

** Aztec MAT to 17 June 2012

Zeagold Foods

“Zeagold Foods is New Zealand’s leading producer of quality eggs and egg products ranging from shell eggs to processed eggs – pasteurised or cooked,” says Sutherland. He adds: “To produce quality products, we must begin with quality eggs. Egg quality is dependent on two variables – the health of the laying flock and the feed makeup and quality.

“Our company is vertically integrated to ensure control of the complete process from the production of feed and the rearing of day old chicks, right through to the manufacture of the finished egg product. This results in the healthiest laying flocks, the highest quality feed and the most stringent quality assurance systems and processes. Because we have absolute control of these variables, Zeagold Foods can optimise the quality of the eggs and egg products produced.

“Zeagold Foods continues to lead with a portfolio of quality and well-known egg brands including Farmer Brown range of cage eggs and Woodland free range eggs,” says Sutherland.

“Testament to the strength of these brands is their continued market leadership in their relevant segments (Aztec MAT to 17 June 2012). In the last 12 months the Farmer Brown brand has gone from strength to strength achieving both volume (+16.1%) and value (+21.7%) growth, ahead of the cage egg segment.”

He adds: “Research has confirmed that 50% of egg buyers choose dozen packs each shopping visit. Consequently dozen packs have now overtaken the traditional 30-cell tray sales, and have grown strongly in volume by (+21%) over the last year. Farmer Brown Size 7 dozen packs, is currently ranked number 1, in terms of unit sales in cage eggs and has grown by +45.4% in the last 12 months (Aztec mat 17 June 2012).

“The Woodland free range brand continues to lead the strong growing, premium free range segment,” says Sutherland. Zeagold is currently increasing its capacity to meet this rising demand for the Woodland brand on its Glenpark free range farm (pictured at top LH). Towards the end of 2012 another 16,000 birds will be introduced and housed in the latest top-of-the-line imported European sheds and equipment. “Zeagold is not only driving quality but is also at the forefront of the industry in driving animal welfare practices,” says Sutherland.

“We would expect to see continued growth in the specialty eggs segment at the expense of cage eggs as consciousness of animal welfare continues. However there will continue to be a place for cage eggs due to the exceptional value that this relatively low cost staple provides to budget minded households,” he says.

The new Codes of Welfare for Laying Hens are due to be issued by the Minister of Primary Industries this year. This will affect all types of housing methods – cage, barn and free range.

Eco Egg Co

Founded in 1992 the Eco Egg Co is one of the oldest dedicated free range and organic egg companies in New Zealand. The operation is based on the founder’s original production principles – the way he had produced free range eggs from backyard chickens over many years. These principles have not changed for the last 20 years. Today a network of individually contracted small scale producers nationwide forms the production base for the company’s cottage-type specialty eggs. These family farms are independently audited annually against the company’s strict production principles.

Eco Egg products are supplied to most retail outlets all across New Zealand, with over 250 supermarkets stocking the company’s eggs nationwide. An increasing number of eggs are now also exported to Asia with weekly orders being shipped by air freight to these markets.

“The Eco Egg Co remains committed to the environment, the welfare of animals and the production of healthy and nutritious farm fresh foods free of artificial supplements,” says Mike Schellkes, managing director.

The Blue Tick

The SPCA Blue Tick is a certification programme run by the RNZSPCA and designed to certify animal products that are farmed to high welfare standards. The scheme started by certifying eggs in 2001 and then added pork products in 2009.

“In 2011 we added standards for meat, poultry and chicken and we will be launching turkeys at the end of this year,” says Juliette Banks, national accreditation & marketing manager.

“We have plans to add veal and salmon to our portfolio in 2013. We write the standards, publish them on our website and then our independent auditors audit the farms on a regular basis and we can spot audit at any time. Producers sign a legal contract with us to use the logo on their packaging and agree to farm to these standards.”

The Blue Tick logo offers consumers a guarantee that the product they are choosing has been farmed humanely and it also gives producers the recognition they deserve for farming the ‘right’ way. Farm animal welfare is an increasingly important issue for companies across all sectors of the food industry, driven by a range of factors including regulation, growing consumer concern, pressure from animal activists, media, investors and retailers.

For more information about the SPCA Blue Tick, visit rnzspca.org.nz or email julietteb@rnzspca.org.nz.

Independent Egg Producers

Independent Egg Producers Co-operative is a national egg supplier made up of several regionally-based owner/operator farms specialising in the production of quality, fresh eggs at a local and personalised level, says Susan Bamfield, general manager.

A central office handles national agreements, e-commerce and administration plus marketing and promotional activities. The Co-op specialises in supplying the supermarket trade and has invested heavily to ensure that all product complies with current legislation and food safety requirements, says Bamfield. Each of the farms operates under a registered Risk Management Programme. The company prioritises supermarket customers in all activities including frequent merchandising and offer of surplus product when available. The Co-op offers a complete range of eggs including cage, free-range, barn and organic.

“The company’s group brands comprise 19% and 23% market share of TKA by volume and value respectively (Aztec MAT to 1/07/12) and are also a key supplier of private label,” says Bamfield.

The key performing brands are Morning Harvest (cage eggs), New Day (free-range and barn product) and Sungold (free-range organic).

Bamfield says: “While the total egg category continues to show growth (+7% by value), cage eggs remain dominant, comprising 62% and 77% share by value and volume respectively. The ‘free range’ sector continues to show growth (+12% by value) and now makes up 25% share of total eggs by value (in TKA). The New Day brand is consistently a top performer in this sector.”

Consumers continue to recognise eggs as an affordable, nutritious alternative to more expensive proteins. Bamfield says: “The recent work undertaken by Eggs Incorporated (the generic marketing arm of the NZ egg industry) has reinforced this message, providing an eye-catching TV and on-line campaign focusing on the ‘scrummy’ and nutritional benefits of eating eggs. In addition, consumers are increasingly looking to source ‘local’ products to support local communities, and thus Morning Harvest and New Day eggs, produced and supplied regionally by dedicated, hard working and enthusiastic poultry farmers are well positioned to meet this demand.”

Henergy

Henergy is not only animal welfare conscious but also helping with wildlife restoration, says Trevor Friis, sales and distribution manager.

He explains: “As the country’s largest cage-free barn egg producer, Henergy is only too mindful of how important animal welfare issues are to a successful growing brand. By joining the SPCA Blue Tick scheme with one of the foremost organisations for animal welfare, certainty for consumers is provided so that they have the comfort they are purchasing a product true to label.”

Friis says: “Henergy believes that through ongoing education and promotion of schemes such as the SPCA Blue Tick, New Zealand will hopefully one day follow the example of Europe and California and ban traditional battery-cage farming.”

Henergy Eggs is also proudly supporting Pukaha Mount Bruce in its forest wildlife restoration project.

Henergy Cage-Free markets the Henergy, ‘Simply Cage-Free’ range of cage-free barn eggs and the ‘Purely Free-range’ range. In addition to their own brands, Foodstuff’s house brand Pam’s cage-free barn eggs complement the range. Friis says: “These brands are available nationally and can be found in over 70% of the two major supermarket groups. The Henergy brand has outperformed the total market with growth 2.9% by volume and 11.0% by value TKA compared with total eggs at 1.1% and 6.0% respectively (Aztec MAT to 27/4/12). During this period non-caged eggs volume has grown by 7.1% while caged eggs sales have declined by 0.5%.”

For consumers who prefer non-caged eggs, Henergy has a full range of packs and grades to cater for all options. A private label option for the budget conscious is available as well as a premium range with the Henergy brand.

Ingham

Ingham retail sales manager Jerem Wylie told FMCG: “Ingham provides a leading range of products under its core Ingham brand, covering fresh, frozen, value enhanced and packaged frozen categories, across its Red Box, Red Bag, Quick Cook, Value Selections, as well as its Waitoa Free Range product brands. Early this year, Ingham launched two new flavours of the unique ‘Butterfly Chicken’ product – Lime & Chili and Herb & Garlic – as well as new packaging designed to capture consumers’ attention. Our Butterfly Chicken range has progressed particularly well, and was extremely well received with consumers. Category sales grew significantly over all three SKUs according to Aztec data,” he says.

He adds: “Our new Ingham packaged frozen Red Box and Bag packaging has given the range a real presence in the freezer and has been well received by consumers.

“As part of our continued innovation efforts we are adding new deli and Fresh products and we are eagerly looking forward to launching some new and exciting additions to our Red Bag and packaged frozen ranges which will hit the shelves in the next few months.

“Consumer trends across all categories tend to be moving toward fresh product, however in terms of key market segments, the household shopper audience still seeks the convenience of good, innovative packaged frozen products,” says Wylie.

Ingham has lined up two standout additions to its red bag range of packaged frozen products – Salt & Vinegar Goujons and Beer Batter Flavoured Wedges, set to launch in September. Made with 100% New Zealand breast meat, these crispy bite sized snacks, packed in convenient 800g Red Bags, offer exciting new flavour options for New Zealand consumers.

Wylie says the two products reflect Ingham’s approach to product innovation in the packaged frozen category.

“In terms of key market segments, they will appeal to the household shopper seeking the convenience of good quality, innovative and convenient packaged frozen products. The Salt & Vinegar Goujons and Beer Batter Flavoured Wedges are a great addition to the range.”

Canter Valley

Kathy Guard, marketing manager Canter Valley says: “We have seen growth in the customer demand for fresh poultry products from the butchery. The cooking and chef programmes on television are heightening the home cooks’ product awareness and also in some cases teaching them to use new products. Apart from duck breast and leg portions we have experienced high demand for the rendered duck fat product, which has a high flash point and fantastic flavour, ideal for roasting potatoes or other vegetables. The Canter Valley duck fat comes in a convenient re-sealable 500 gram pouch.

“Turkey mince has been a successful new product for us over the last year, a low fat high protein mince at a good price. We had very good customer feedback. It is healthy, versatile, tastes great and is really good value. Other Turkey products now readily available in selected supermarkets include turkey drums, nibbles, drummettes, breast and thigh.

“Canter Valley now also produces a free range turkey option. This is in response to feedback from our customers. We are currently the only FREPNZ accredited free range Turkey producer in New Zealand. Canter Valley is the only brand we are currently selling in the supermarkets,” she says.

Tegel

“Committed to providing versatile meal solutions for every New Zealander, Tegel is New Zealand’s market-leading, fully integrated poultry producer and offers a broad range of poultry products from fresh and frozen whole birds and portions to value-added main meal items,” says Brenda Galbraith, marketing manager.

“Two new delicious flavours, Parmigiana Schnitzel and Apricot and Cream Cheese Stuffed Breast, were added to the already popular Tegel Cuisine range in September 2011, with mainstream appeal for the target market. Total Cuisine performance has shown 26.1% growth in volume and 27% in value vs YA TKA. Tegel currently holds 58.5% MAT value share of the Value Added Adult FP Segment (Aztec Scan Sales, MAT 03/06/12 vs YA).”

She adds: “In April 2012, Tegel added to its Lean & Lite range, with the introduction of tray pack chicken mince and stir fry, providing the shopper with New Zealand’s favourite protein in a format that ticks all the boxes; convenient, healthy and good value. Made from 100% skinless boneless breast, both cuts have the Tegel Lean & Lite branding with the Heart Foundation Tick of Approval.”

Galbraith says: “Rangitikei is a recognisable brand growing in both volume (38% MAT) and value (28% MAT) in the fresh chicken market, producing uniquely corn-fed free range chicken (Aztec Scan Sales, MAT 01/07/12). The feed, made predominantly of corn, gives Rangitikei chicken a delicious buttery flavour and juicy tender texture. This year has seen Rangitikei lead the way in chicken production, gaining the independently audited SPCA Blue Tick of approval, giving consumers a humanely produced choice in the chicken cabinet.”

New products added to the Rangitikei range include chicken mince and stir-fry.