By Bruce Roscoe
Two honey strategy documents are before the industry. Apiculture New Zealand Inc. (ApiNZ) released the first effort in February. New Zealand Beekeeping Inc.'s (NZBI) contribution surfaced in October. Though at once a symbol of disunity, the competing strategies betray a shared sense of crisis.
The purveyors of the world's most expensive honey appear unable to turn a profit (read Comvita’s NZD77m loss in 2024), more has been produced than can possibly be sold in five or more years, and the anchors of the entire industry – the beekeepers – are signalling the bridge to be wound up.
Industry participants and observers will see much of value in both strategy documents (hereafter, documents)－ action plans for bee health; bolstered biosecurity; improved intra-industry communications; the expression of one voice to regulators; funding to chart a course through current turbulence and into a hopeful future; a single industry body that engenders cooperation over conflict and unites the warring factions; and more.
In the under-funded honey industry, community-oriented work typically is volunteered. Those who benefit are thankful for the effort and hours that have been contributed. Differences of opinion are met by conciliatory comments rather than combative criticism. It's understood that if 20 beekeepers occupy a room, 20 (or more!) differing opinions on a wide range of subjects are likely to be aired.
The Elephants and the Handprint
The ApiNZ document － "Thriving Together: Futureproofing New Zealand Apiculture 2024-2030" － does not reflect community effort. And what it omits to say or see is substantial. More than one elephant resides in the front room of this honey house. Before we visit the largest of the resident Proboscidea, let's pause to consider the authorship and funding of the strategy.
Although ApiNZ states that it originated the project, the UMF Honey Association's (UMFHA) handprint is large. The public-relations (PR) writing style of the UMFHA's website and the document is all but identical in large sections. And as Apiarist's Advocate reported in March, UMFHA chief executive Tony Wright, who serves also as an ApiNZ director, was "heavily involved" in determining the "final shape" the strategy would take.
The Ministry for Primary Industries (MPI) and industry participants have co-funded the ApiNZ document production and strategy implementation in two tranches. Under the formal name, "Securing a Resilient and Sustainable Future: Strategic Planning for the Sustainable Growth of the Honey Sector", NZD385,500 was earmarked for the project for the period March 2022-December 2023. MPI contributed NZD225,000 to which ApiNZ, Comvita Ltd, Mānuka Health New Zealand Ltd, and NZ Honey Industry Trust added in sum NZD158,500. The second tranche (for two years from May 2024) comprises a NZD309,000 commitment from MPI to which UMFHA as co-funding industry participant has added NZD181,000. The war chest (well, peace chest if the PR is to be believed) thus totals NZD875,500.
UMFHA's enthusiasm to co-fund an industry-wide plan that would benefit all honey types is revealing. In a column in the May edition of this journal, Wright said that during an overseas marketing trip he had found himself with a "broader job to do" which was to promote and defend the mānuka honey category "for the benefit of all New Zealanders". Underlying such altruistic sentiment this writer sees a deeply invested UMFHA interest in campaigning for the early founding of a well-funded new industry body. The greatest benefit to UMFHA would be the almost certain ability to transfer all costs associated with the effort to secure a certification trademark (hereafter, trademark) for mānuka honey.
Those costs extend well beyond the amounts incurred for filings in various intellectual property (IP) courts. An entire Māori infrastructure has been created on the assumption that the trademark would be granted at least in New Zealand. After deliberations that spanned nearly eight years, the Intellectual Property Office of New Zealand (NZIPO) rejected the trademark application filed by the Mānuka Honey Appellation Society (MHAS; a UMFHA-related body that shares the UMFHA address and CEO).
Yet the premature infrastructure － specifically the Mānuka Charitable Trust and its 100%-owned Te Pitau Ltd－ require continual funding. The cost of that funding (with the exception of a Provincial Growth Fund contribution in 2019) was and remains solely for the UMFHA / MHAS account.
The September 2020 edition of New Zealand Beekeeper described Te Pitau Ltd as the "operating" arm of Mānuka Charitable Trust – operating" in quotation marks because Te Pitau Ltd operates to no office or telephone number or email address, nor does it maintain a website. The website begun for Mānuka Charitable Trust in early 2021 remains "under construction" today and can be seen at www.mct.nz.
The ApiNZ document references taonga and "Mānuka Charitable Trust" five times each in sentences that read to this writer as obligatory statements of political correctness. For example, "With the support of the Mānuka Charitable Trust...Māori and industry will work in partnership to protect our Māori taonga…" The actual politics involved are more complicated than observers would imagine.
A Political Manoeuvre
In a complex political manoeuvre (read late whisky nights in Wellington), both Te Pitau Ltd and Mānuka Charitable Trust were registered in December 2019 and February 2020 to 15 Show Place, Addington, Christchurch. That is the address of Ngāi Tahu, the principal iwi of the South Island. Just six days after the Australian Mānuka Honey Association (AMHA) on 21 July 2018 had lodged opposition with IPONZ to the trademark, Ngāi Tahu also opposed either the application or an early award of the application. AMHA's opposition succeeded; Ngāi Tahu's was withdrawn. UMFHA's early (and documented) intention to charge for use of the trademark, should such be awarded, had triggered Ngāi Tahu's opposition.
UMHFA has spent NZD3.3m on IP creation and protection in its March 2017-2024 years. The trademark case absorbed an undisclosed share of that amount, but the extent to which UMFHA and MHAS accounts may be commingled is unknown. Costs continue to mount. Funding Te Pitau and Mānuka Charitable Trust through "donations" stripped UMFHA's budget of NZD510,000 and NZD685,957 in the March 2023 and March 2024 years. (Unexplained "targeted funds" are included in the same category and may or may not relate to Te Pitau or Mānuka Charitable Trust.)
UMFHA has budgeted same-category spending of NZD500,000 in its current financial year. The March 2024 year "donation" accounted for as much as 39.0% of the association's total expenses.
The impetus behind the formation of a new industry body now focuses on a pinpoint. It is all but inconceivable that UMFHA dissolves itself at the time the new body is formed. For one thing, the large contingent of offshore licensees could not easily be rehoused. But UMFHA would fairly expect that such a body that represents the industry as a whole and is funded by a universal levy to assume the trademark and related infrastructure expenses. After all, we are now united. On team NZ, aren't we?
The mānuka trademark train, like a toy model on a circular track, cannot reach any destination. It will pull into a funding station at regular intervals and resume its start-to-start journey. That is how this writer felt after twice reading the rejections of the trademark application by NZIPO (22 May 2023; 171 pages; [2023] NZIPOTM19) and earlier by the UK Intellectual Property Office (13 Dec. 2021; 39 pages; 0-899-21).
The Lost Value
The surrender of added value through bulk exports seems of negligible concern to the strategy, yet this issue personifies the African savanna elephant, the largest of the species.
For all honey types exported in CY2019-CY2023 the lost value reached NZD178.7m, 3.6 times more than the NZD49.6m forfeited in CY2014-CY2018. The value lost in CY2020 alone reached NZD75.2m, or an average NZD8,580 each hour of each day. We can calculate the lost value by multiplying bulk honey export volume by the price differential between bulk and retail pack honey exports.
(Bulk exports typify the trading pattern between developed and developing countries. Value is maximized in the developed country through the creation of processing jobs at food factories, the use of compatriot suppliers for processing equipment and food containers, and business flow-on to companies on the periphery of the production.)
Few Words Allotted to Bulk Honey Issue
The NZBI document doesn’t so much as mention the term “bulk exports”. The ApiNZ document contains about 5,700 words. Of those, 14 are allotted to the subject of bulk exports － "bulk export levy model to ensure quality and value is (sic) retained in New Zealand". These words are found not in the text body, but in a summary table on page 13 (unnumbered).
The ApiNZ strategy's companion Question and Answer note advises: "Any imposition of a regulated levy will require a vote from those who would be asked to pay it". As applied to the issue of bulk exports, this appears disingenuous and borders on the unserious. All know that bulk exporters would not agree to a levy. But there are at least three other ways in which the lost value could be reclaimed in an amount in the low millions of dollars that could be used to fund product education and the development of new markets for retail pack exports. The Scotch Whisky Association's method for one category of non-premium product has much to teach.
It seems unlikely that the authors of the ApiNZ strategy, who include and represent honey exporters, unintentionally omitted the issue of bulk exports. It is instructive, too, to note that the trademark applications used the words "mānuka honey produced in New Zealand". That wording accommodates bulk exports and the oxygenation of offshore mānuka brands that compete against retail pack product exported from New Zealand. When queried in March 2021 on the wording "mānuka honey produced" rather than "retail pack mānuka honey produced", John Rawcliffe, then UMFHA administrator, replied:
"...there are a number of producers that sell bulk honey as a cash flow backup, to get Industry buy in (which is a must for this to work) produced in NZ was the only option to start with".
The trademark cases were good ones to lose. They were circular and self-defeating. Can we imagine Scotch whisky distillers, Champagne Houses, or Japanese sake brewers surrendering added value and quality control by permitting the bottling of their products offshore under alien labels? The question is rhetorical. It is already understood that the whisky, champagne, or sake would be protected as precious taonga.
A Different Planet
Graphs in ApiNZ's document are unnumbered and the data in them unsourced. No estimates are sourced. CAGR does not abbreviate "cumulative average growth rate" － the correct term is "compound annual growth rate".
The NZD1b revenue growth target for 2030 is variously conflated as a "NZ honey" and a "mānuka honey" goal. If all honey types was meant, meeting that goal would require an additional NZD100m in annual honey export revenues (on which planet?) over the CY2023 total of NZD395.6m. Readers may feel entitled to credible assumptions and calculations.
A revenue-doubling goal appears simplistic, even naive. There may be a trickle down to beekeepers, but trickle-down economics has been widely discredited as the well-funded are inclined to spend on themselves. In any event, the industry in the 10 years to CY2023 did double export revenue to NZD395.6m. How did that work out? A more meaningful goal is to raise the share of offshore retail prices that is returned to New Zealand.
Pipe Dreams
Neither importers nor wholesalers would recognise sense or reason in the ApiNZ pipe dream that "...securing mānuka honey as being uniquely from New Zealand will create a bigger stage for other unique honeys". The opposite is more the case.
Upmarket retail knows that at least three grades of mānuka honey must be stocked. Buyers also know that they cannot rely on one supplier for uninterrupted supply. So, the product of two or more brands is stocked. As a result, at least six mānuka honey products are seen on shelves. If buyers wish to add more, they are likely to choose a lower price point "multifloral" mānuka.
Unlike the case of a market such as New Zealand that is closed to foreign honeys, upmarket retail in Japan, for example, often stocks honeys imported from countries as diverse as Argentina, Australia, Bulgaria, Canada, China, France, Germany, Hungary, Italy, Myanma, Mexico, Romania, Spain, and the United States, not to mention a selection of locally produced honeys. Amid such choice and competition, buyers only rarely consider New Zealand honey types other than mānuka.
Story-telling Is for Children
The ApiNZ strategy is silent on "product knowledge" while extolling the New Zealand honey or mānuka "story" in headings and text 15 times. Story-telling is for children.
In this writer's advisory association with honey importing and wholesaling I have read many inquiries for trade. When such are tested with a request for explanation of each numerical value on the candidate honey product label, often trotted out in response are the tired lines, "It's pure" or "It's natural" or "It's from New Zealand" or, in one collector's item case, "We don't need to know that". Yet the marketers of successful and protected brands that achieve a global presence will understand all that is understandable about their products rather than default to a country of origin "story".
Only one respondent has been able to answer the question, "Are the nutritional information panel (NIP) data generic or the result of analysis of the specific floral source of the honey? If generic, what is the source of the data?
Only one packer has understood why a fat amount printed in an NIP should be greater than zero.
Beware the "New Zealand Story". It seems universally to substitute for product knowledge and packing expertise. It did not assist the roundly defeated trademark applications. It did not protect against widespread glyphosate contamination of multiple honey types. It does not answer questions asked by importers, wholesalers, or consumers in export markets. It could disastrously link to an expose of the quality of river water that bees drink. Only the NZBI document addresses product knowledge, advising in summary "Highlight the goodness of honey with vitamins, minerals, and enzymes..."
Mānuka as a Cyclical Commodity
NZBI frets that without a "pipeline of new honeys and honey research", New Zealand honey "will revert to a commodity product". It has already become such. The industry is in a phase of "ex-growth". Honey export volumes and values have declined in consecutive years since the CY2020 peak. The Japan unit of Comvita Ltd is not alone in discounting mānuka products by as much as 50%. Considering that the trade will not reduce to zero, at some point the downturn will bottom out and upswing follow to birth the first cycle.
No Commitment to Fair Trade
Both ApiNZ and NZBI are silent on the importance of adhering to fair trade practices. A commitment to such could begin with a promise not to brand build on the back of unpaid and child labour (see Employment Court ruling [2022]NZEmpC77EMPC363/2021). This elephant should be acknowledged. NZBI's website at least notes the "need to encourage good ethics and practices in Beekeeping and in the marketing of bee related products", while both ApiNZ and NZBI logos adorn the New Zealand Honeybee Care Code – but this supports “bee welfare” and not human.
'Formulaic' Consultation
UMFHA 's website states: "Today we represent beekeepers, processors and marketers..." ApiNZ says: "We are a voluntary membership organization representing New Zealand beekeepers". NZBI: "Our desire is to be the voice of NZ Beekeeping". Those beekeepers who remain must feel the love of over-representation
NZBI, whose document reads as heartfelt, fears that a new, export-focused body will muffle beekeepers. Observers must await details of the proposed body before deriding the effort to establish it. But we are not frogs in wells whose sky view is limited to the diameter of the well. Dairy farmers and kiwifruit orchardists seem to make reasonable-to-good livings. Both have robust producer-only associations with strength of voice to keep exporters on their toes. The website of New Zealand Kiwifruit Growers Inc. is a guide.
Neither ApiNZ nor UMFHA appears informed by examples of offshore beverage and food producer and seller associations that have achieved the goals set out in the ApiNZ document such, as IP protection which speaks to brand strength that defeats commoditisation.
The Champagne Houses, the Scotch Whisky Association, and the Idaho Potato Commission also have much to teach, as does, this writer believes, the system of cooperatives operated by Japan Agriculture. (The underlying philosophy of the Japanese association is that farmers' incomes should be comparable to the incomes of city folk.)
The problems that beset the honey industry appear deeply structural. A universal levy collected and disbursed by the same sector doyens operating now as then seems an unlikely solution. Though one should not prejudge the effort, the intention underpinning the public expression of the plans warrants scrutiny.
The ApiNZ document to this writer reads as a fait accompli － an example of formulaic "consultation" replete with the invitation to provide "feedback" extended months after a course has been charted and key framework details agreed. ApiNZ's extravagant use of PR jargon － words such as "driver", "empower", "transparent" on repeat play － all but gives the show away.
Beware the Elephants
Elephants, the largest of the land mammals, possess exceptional intelligence and memory. They also epitomize the basic law of the wild that big things are dangerous. An indoors charge would destroy the honey house. It is vital to talk to them rather than, in myopic view, behave as though they are not there.
Bruce Roscoe is a Japan-based New Zealander providing honey importation and distribution consultancy. He is a former director of research for Deutsche Bank Securities Japan, with extensive experience as an equity research analyst and as correspondent for both leading New Zealand and global media publications.
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