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Update from Rennie Davidson

Unfortunately, COVID-19 continues to significantly impact our food service sector across most markets.

On a positive note, we have seen some recovery domestically with Kiwis now getting out in force to support local restaurants and hotels.

With COVID-19 worsening, especially in the US, and new outbreaks in Australia and parts of Asia, the anticipated improvement in sales has been further delayed.

Despite this turmoil, Alliance’s sales team has continued to build relationships with chefs in our export markets, build the profile of our lamb and cement in demand for when things recover.

Meanwhile, our focus is on maximising revenue and cost reduction. As we plan for 2021, we are looking at where we can gain further cost efficiencies, reduce wastage, and increase revenues to deliver premiums.

The fundamental goal of being well rewarded for our efforts into the food service sector remains. The NZ market has shown how quickly a recovery can happen, however we are some time away from a recovery in our other markets.

See you all at the Muster later this month.

Farmer Liaison Group: Dave Harper

The Farmer Liaison Group has been meeting monthly and focusing on improving outcomes for farmers.

It is important there is full transparency across the supply chain and ensuring practices and processes are in place on-farm and in the processing plant to reduce wastage. A lot of work is also being done to fine-tune days on feed for the best results.

The future positioning of the Te Mana Lamb brand has also been progressed.

Members of the group - Guy Blundell, Dave Harper, Simon Saunders, Tom Sturgess, David Surveyor, Nigel Jones, Shane Kingston, Mile Teen, Rennie Davidson, Alan McDermott, Fraser Broom and Mark O'Connor have been keeping in touch with all parties involved. 

We can report that a lot of hard work has been done, and a lot has been achieved. We will be sharing the latest updates with you at The Muster.

Meanwhile, we are seeing a good level of liaison and communications with Alliance, the High Health Alliance and Headwaters.
 

Market News: Mike Teen

Australia/New Zealand
The domestic market is the shining light globally in terms of food service with the past month seeing sales levels at or above pre-COVID-19 levels across nearly all centres. Customers have returned to dining out in their droves, aided especially by the winter school holidays, and supporting local businesses strongly both in main centres and regions. Te Mana sales have been strong as people look to high quality products to treat themselves after the lockdown period and get a healthy mid-winter boost of nutrition.

Unfortunately, this has not been the case in Australia, where food service is still severely impacted by COVID-19 – even more so in the past few weeks as the pandemic surges again in the key states of Victoria and New South Wales. Queensland has had some restaurants open but has not yet seen the resurgence of demand that New Zealand is experiencing.

Asia
Demand for Te Mana in China is growing steadily, with a record sales month in June. Current distribution is limited to Shanghai and Beijing, however with strong sales, we are pushing our in-market distributors to extend to additional Tier 1 cities. The development and support of this Chinese distribution extension is a key initiative for the Asia sales team and wider business.

Our traditional key market of Hong Kong returned significantly with a record in-market sales volume in June despite the continuing social unrest. However, with the apparent outbreak of a ‘third’ COVID-19 wave, the market has rapidly closed down again in July. The same volatility is apparent in all other Asia markets such as Singapore, Taiwan and Thailand, with the combination of fluctuating lockdown positions and a large excess of premium red meat on the market severely challenging food service sales programmes.

North America
The North American food service market continues to suffer significantly from the continuing volatile domestic situation in the US due to COVID-19, protests and civil unrest of the Black Lives Matter movement. Both issues are severely impacting the Californian market with consumers reluctant to eat out and restaurants suffering significantly via continually changing trading regulations. In effect, the current US food service market has stalled for Te Mana sales. 

During this extreme period of volatility our team continues to cement relationships with key chefs and influencers, with social media promotion and engagement around Te Mana with the expectation that this continual profile build will cement in demand once the market returns to some level of normality. A key change to restaurants in the US, and reflected globally to some extent, is that when outlets are opening, they are doing so with highly abridged menus. With that in mind, the team are working hard on producing innovative offerings and cuts to secure Te Mana listings.

Given the situation in the US, the team has activated Canadian sales channels to continue to move Te Mana stocks.  While relatively successful with encouraging sales levels in June, it will take time to build further profile and demand in this market.

UK/Europe
The UK market re-opened food service on July 4, however all restaurants are only permitted 50% of their previous capacity. In reality however, this restriction actually means an effective capacity of much less than that as the social distancing requirements set mean that most establishments cannot operate at 50% levels. As in the US, the UK and European menus are highly restricted and modified compared to pre-COVID-19 times in an effort to reduce overhead and ingredient costs and the sales team are also seeking ways they can take advantage of this to secure Te Mana listings in key channels. From a regional perspective, Central London is almost a ‘dead zone’ for Te Mana Lamb-level restaurants, with a vast amount of city workers now working instead from home. However, this is driving demand out into the regions. This is an opportunity our local sales team is looking to capitalise on by extending our distributor network to provide increased coverage outside of the main centres. Likewise, COVID-19 has slowed sales on the continent, though things are slowly restarting.
 
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