The Quarterly Honey Market Chat is a space for ‘honey buyers’ to connect and inform honey producers – the beekeepers. Here’s what James Annabell, John Smart and Logan Bowyer have to say about the markets as we head into a new production season…
Egmont Honey – James Annabell – Chief Executive
In my last update, in June, I forecast some large export orders to come for Egmont Honey and since then we have been working on some major new supply agreements. So, heading into a new season, our demand for certain types of honey will once again be stable.
An exciting new relationship for us is with Costco in China, whom we sent our first consignment to in August. They are a big retailer in a big country – so the potential to grow export volumes there is very real. The same goes for the United Arab Emirates market where our mānuka honey will soon grace the shelves of their largest pharmaceutical chain, Life Pharmacy, who have just celebrated the opening of their 400th store.
We have growing confidence in the UK market too, where our major retail partner, Holland and Barrett, has just extended our range of products, from 7 to now 9, over their full 800 stores.
All-in-all, it gives us great confidence in the demand for New Zealand honey under the Egmont label. That’s a good thing, but I’m sure what you really want to know is, what will the price to the beekeeper look like?
As it sits, we still have a large stockpile of MGO500-700/UMF 15+ in both our Egmont storage and in the New Zealand market place. In the short-term we will have more demand for lower grade manuka and bush/pasture honey and so pricing should remain, at least, stable there. This past season we received good supply of clover and darker pasture honey out of the South Island, where North Otago beekeeper Shane Rawson has been sourcing honey on our behalf. It has been great to establish new relationships and we will be back again for more in 2024.
While it may currently be tough going, especially for higher-end mānuka producers, my recommendation to beekeepers considering shutting down operations is, don’t sell off everything. If you really need to shut down your business, is it possible to just put it into hibernation? Give yourself a road back. For Egmont Honey, we have no desire to significantly grow our own hive base. We strongly believe in the value of forming long term partnerships with a circle of great beekeepers. I can see the other end of these tougher times. We are only one more bad production season away from clearing the backlog.
Best of luck for the coming season. As always, the phone is on, you are always welcome to give myself, Nick Walker (procurement) or Shane Rawson a yell any time.
Airborne Honey – John Smart – General Manager Sales
I’ve spent the last couple of months fielding calls from beekeepers asking for a price for their honey. It’s been a very unusual year beginning with the atrocious weather in the North Island fuelling speculation that honey was going to be in short supply, followed by what a appears to be a good honey crop in the South Island, depending on who you talk to. For Airborne Honey, our sales are up and demand is strong, however we are working hard for sales amidst hot competition for consumers’ attention, from both other honey brands and other spreads. With this in mind, the latest year to date (July ‘23) export data shows honey value down 14.5% and volume down 7.30%.
The good news is domestic consumption is up 6% and the value is up 13%, as at July 23. The shift in the honey category in New Zealand and offshore supermarkets is toward multifloral mānuka. Consumers are switching from polyfloral and clover blend honey to mānuka blends. This is driven by the very competitive retail prices for mānuka and the perception the honey is healthier than non-mānuka honey. The other trend in the market is honey being sold in a more convenient, useable format.
With this information in mind, the advice I am giving to our beekeepers is continuing to be a demon on costs while maximising production based on the most cost-effective honey crops. In other words, focus on volume rather than value, but not at the expense of quality. We are seeing increased numbers of samples with high HMF levels and more concerning high HMF honey being packed and sold in retail packs, including honey labelled as ‘raw & unfiltered’. I am aware of two private organisations monitoring HMF levels in honey. Both beekeepers and packers have a duty to protect consumers and our industry from unscrupulous actors. It’s worth remembering the HMF in fresh honey is almost always below 3mg per KG. The CODEX standard for HMF is 40mg per KG. The closer the honey is to 3mg/kg in the retail pack the better.
So, what’s the price for honey? This is something we are monitoring, with what appears to be reasonable stocks of unsold honey and the financial strain many beekeepers are experiencing, we need to ensure the price we offer is in line with market prices being offered to retailers. From a honey packer’s perspective, we need stability in the market and want to avoid a decline in retail price, otherwise we have no choice but to respond, resulting in lower honey prices.
Mānuka Orchard – Logan Bowyer – Owner
First the good news – the bulk market enquiries for mānuka honey are strong in the lowest and highest grades at the moment, with consistent, good pricing. In the middle MGO ranges pricing continues to be wide and varying depending on the buyer, the urgency of the deal, and required level of compliancy.
Fully tested and ‘A-grade’ honey continues to get the best offerings. For older, non-compliant honey, blending is the best option to enable a better value sale and beekeepers sitting on this stock should seriously consider it.
All other honeys (i.e compliant non-mānuka varieties) are in short supply at the moment with stable, sustainable pricing being offered.
Beekeeper’s questions to us this month have been focused around what honey they should aim to produce this season. On average New Zealand exports about 10,000 tonnes of honey annually and it is my belief we will only need to produce about 30-40% of that this coming season, because the mānuka stocks are so high. A reduction in mānuka honey production, because of poor weather/flowering, beekeepers targeting different crops, or just less hives, will help reduce the existing volume of mānuka in stock.
For bulk producers, the focus should be on 300MGO honey. No-mānuka honey should be targeted if you have a sustainable price indication and volume required from a buyer beforehand.
With reduced hive numbers this season and – potentially – many beekeepers choosing not to target mānuka, it remains to be seen if reduced hive pressure increases the kgs per hive. Of course, the weather is always outside our control and who knows what will happen there.
Looking longer term, if we are using 40kgs of honey per hive as a target at production and if export sales are consistent at 10,000T nationally p/year, then 300,000 to 400,000 hives (12,000-16,000T production) is a sustainable national target going forward once domestic sales are factored in. From that point, we can then grow sustainable sales channels to increase hive numbers again as an industry, if required.
What every honey investor needs now is a fair price for their honey in order to level the industry at a sustainable place, so we don’t go below the line of stability of supply. As we are finding now, it’s not just about producing mānuka honey, but about ensuring we have the right balance of ‘mature’ and ‘fresh’ honey to supply the markets. If we overcorrect, and stability of supply is not ensured, the result could be worse than the current state, for all involved.
For further advice, get in touch: Logan 027 667 7588 / thehive@manukaorchard.com
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