NZ honey supplier inks big UK deal

The New Zealand Honey Company is seeking new capital and has announced a supply contract with the Asda supermarket chain. Chief executive Chris McElroy checks some bio-active beech forest honeydew honey at the Dunedin factory, while factory manager Greg McElroy looks on. Photo by Linda Robertson.

Asda last month started selling honey supplied by Dunedin's New Zealand Honey Company in 220 of its UK stores, a move which will increase turnover by 20% and should also open doors to other UK supermarkets.

NZ Honey Company chief executive Chris McElroy said if sales remained strong, the company's products could be on the shelves of 400 Asda supermarkets by later this year and the door could open to other UK supermarkets.

Mr McElroy, who previously worked for Fonterra in the UK, said while Asda liked the product, access was helped by the quality reputation of New Zealand food.

"They've been buying quality New Zealand lamb, butter and wine for a long time.

"Well-marketed and branded New Zealand honey seems to be fitting that slot as well."

New Zealand Honey Company also sets its products apart by having an antioxidant or bio-active rating and produces several flavours including rata, kamahi, wild forest and white clover.

Traditionally, most New Zealand honey was sold under a retailer's own label, and Mr McElroy said this meant of the 98% of that honey which ended up in consumer packs around the world, just 10% of those packs were owned by New Zealand beekeepers.

His company wanted to change that by allowing beekeepers to retain an interest in their product from the hive to the retailer.

The New Zealand Honey Company was seeking up to $3 million in new capital to fund expansion in to new markets and Mr McElroy hoped to attract money from beekeepers as well as private investors.

The company was profitable, he said, and had a proven business model.

"The positive thing is the New Zealand Honey Company is not talking about what it's going to do - we're achieving results," he said.

Beekeeper investors would be integrating their honey-production business with a marketing company, securing a price and market for their honey, helping stabilise the industry and participating in profit sharing, while the New Zealand Honey Company would be securing honey supplies.

The company is currently owned by four shareholders, of whom Hawea beekeeper Peter Ward is the dominant shareholder.

The offer opens on Monday and all shares will have equal rights.

Last year, the New Zealand Honey Company won the Deloitte Fast 50 competition with a 995% increase in sales in the year to August 2009.