More chilled meat heading to China

Lewis was in Zhengzhou, China, to celebrate the milestone.

The consignment was part of a trade trial which enables product to be chilled and aged during the 21-day voyage, so it is in prime condition on arrival.

“The speed at which the meat industry has taken up this opportunity is very impressive, considering the Government access agreement was only announced by the Ministry of Primary Industries at the end of March,” says Lewis.

AFFCO’s first 20-foot container of beef will be distributed by Kangyuan to food service and retail outlets throughout the Henan Province in east-central China.

The company’s China sales manager, Clint Bailey, says the shipment has been backed up by significant volumes of sheep meat and beef.

Bailey is surprised at how quickly the Chinese market has adapted for the chilled consignments, and says AFFCO is working with several key customers whom they believe have the cold facilities and infrastructure to deal with large shipped volumes.

“It has blown my mind how well equipped these guys are; they have got up to speed much quicker than anticipated.”

The meat processor had been working with its Chinese partners in the lead-up to the pilot shipment so they could make the most of the trial window. Preparations included visits from Chinese butchers to AFFCO plants to determine the best way to cut the meat to extract the most value for that market.

“We’ve found that for sheep meat in particular, chilled ‘western’ cuts are not the way to go. It’s got to be cut Chinese style to get the most from the carcass.”

To resolve this AFFCO is shipping chilled mutton carcases whole, which will be cut to specification at their destination. Whole carcases are worth almost twice as much to the Chinese as traditional western cuts, which are often underutilised in their market.

“Sending something in carcase form might seem counterintuitive to a value-add offering, but value needs to be assessed through the eyes of the customers and their willingness to pay for it.

“With chilled imports to China now an option, sending a high-quality whole carcase to the right customer means select Chinese consumers can purchase New Zealand product on a ‘cut-to-order’ basis.”

Bailey says the company’s breadth of customer base in China means they can carefully select the appropriate channel to capture the highest value for chilled NZ meat into that market.

“It’s a great example of how AFFCO is adding value from the bottom up, to all our meat products and every part of the carcase – not just from the top down as at the European high end.

“Traditionally mutton has been worth about a third of lamb, so initiatives like this offer us the opportunity to close the gap between those pricings.”

Bailey says another upside to the chilled programme is that it will help maintain frozen volume pricing. With up to 20% of the frozen volume taken away in chilled form, there will be less pressure to move supply.