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Special Edition

MARKET-FOCUSED ALLIANCES FOR THE AUSTRALIAN DEER INDUSTRY

This is a special edition of the ‘Deer Industry R & D Newsletter’ looking at Market-Focused Alliances for the Australian Deer Industry, the newest initiative from the Rural Industries Research and Development Corporation’s (RIRDC) Deer Industry R & D Advisory Committee and industry members.

WHAT IS THE VENISON ALLIANCE PROJECT?
The Venison Alliance Project is a funding support initiative that aims to provide a trigger for the establishment and further development of supply chain and cooperative structures within the deer industry. Th ese structures, comprising any combination of producers plus processors, ‘value adders’, or marketers, will provide the basis for commercial alliances of a formal or informal nature to improve surety of direction, supply and markets.

A SHORT HISTORY OF THE PROJECT
In March 2006, invitations were sent to almost 200 persons in the deer industry (producers, abattoir operators, processors, transporters and marketers) regarding a proposed workshop to discuss the Alliance proposal.

Deer farmers, deer processors, wholesalers, and transporters attended the workshop which was held at the Airport Motel and Convention Centre in Melbourne .

Feedback that R & D Advisory Committee members received from participants was positive and participants noted that they appreciated the opportunity to become more actively involved. Th e participants endorsed the direction for a Venison Alliance Project as discussed at the meeting, providing the mechanism for release of support funding and progression of the application process.

Th e trigger for this Alliance workshop was a previous Rural Industries Research and Development Corporation (RIRDC) report entitled ‘An industry endorsed strategic plan for the Australian venison industry’, (by Cox, Watson and McRae (2005) and a subsequent market research report.

Five key problems were identifi ed in 2005 for the Australian venison industry. Th ese included:

1. Declining economic viability of the Australian venison industry in the domestic market;
2. Lack of consumer awareness of venison in the domestic market across all sectors;
3. Under utilised value of the whole deer carcase;
4. Lack of suitable product specifi cations and feedback to enhance demand throughout the whole venison supply chain;
5. Competition from New Zealand.

1. The establishment of market-focused supply chain alliances (priority given to this strategy);
2. A range of generic industry strategies;
3. Changes to the industry’s research and development priorities and delivery methods.

WHAT WERE THE OBJECTIVES OF THE WORKSHOP AND WHAT HAPPENED THERE?
The objectives of the workshop were to: 

• explain the venison supply chain alliance assistance program that RIRDC is currently establishing, to those industry participants who are considering forming such alliances;
• explain specifi c procedures by which alliance partners can obtain RIRDC funding for such “producer initiated R&D”; and
• obtain preliminary commitment from potential alliance participants to establish their market focussed alliances with an agreed code of conduct and to proceed with the development of a Commercial Venison Alliance Business Plan.

WHAT IS BEING OFFERED THROUGH THE ALLIANCE PROJECT?
RIRDC is off ering layers of funding to support the development of market focussed alliances.

These include:

• funding for a Kick Start Workshop;
• funding for development of a Business Plan for the Alliance; and
• funding for ongoing Alliance Development initiatives of a technical, marketing, organisational or business management nature.

Businesses that are bankrupt or are currently under fi nancial investigation must not enter into an alliance arrangement in this program. Th ere is no limit on the size or number of businesses entering into alliance arrangements.

WHAT’S IN IT FOR YOU?
A Venison Alliance is, in eff ect, a form of supply chain alliance. Many organisations and businesses use supply chain optimisation as a means of gaining signifi cant competitive advantages – both at the level they are working eg. production, or within the whole chain eg. to gain a larger slice of the market, or to target niche markets.

The supply chain in the deer industry would normally provide a sequence of steps (often done in diff erent fi rms and/or locations) needed to produce a fi nal product from primary materials, starting with processing of raw materials, continuing with production of a basic product, and ending with fi nal assembly or processing and distribution.

If your business does not currently have business linkages with other businesses to supply, process, package, or market your product, you will gain by being part of a larger business entity that can negotiate better deals through larger volumes, work together to improve overall standards, create regional or alliance branding based on supply links, reduce exposure in business negotiations, and learn from the experiences of others.

If your business does have business linkages with other businesses, this project provides the opportunity to expand your business network, develop supply and processing certainty and e. ciencies, and reduce exposure in business negotiations.

WHAT ARE THE KEY DATES FOR STAGE  1 APPLICATIONS?

March 2006	* Information brochures and newsletter ? nalized. * Assessment Committee established. * Information disseminated to Deer Industry via newsletter.
April 2006	* Information added to RIRDC website. * Applications for Kick Start Workshop close on 28 April 2006.
Late May 2006	* Applications assessed and applicants notified of outcome. * Kick Start Workshops funded.
June 2006	* Kick Start Workshops held.

WILL THERE BE MORE THAN ONE OPPORTUNITY TO APPLY?
At this stage, only one round of funding is planned, however further funding will be dependent upon the uptake in the initial round and the availability of external funds. Funding for the three stages of the fi rst round is expected to be spread over the next 2 to 3 years.

WHAT IS INCLUDED IN THE KICK START WORKSHOPS?
Kick Start Workshops are meant to provide the basis for a group of potential Alliance partners to get together to fine tune their business strategies and operational models.

As Stage 1 of the project, each Alliance’s Kick Start Workshop:

• will be professionally facilitated;
• will enable participants to look the options regarding the ways they could commit to linking individual relationships with commercial business strategies;
• will be funded to run over an afternoon/ evening / following day period;
• will ensure the establishment of a Code of Conduct and confirmation of commitment from potential participants; and
• may include visits to production, processing and customer purchase sites important to the potential alliance.

HOW DO WE APPLY FOR KICK START WORKSHOP FUNDING?
Applicant groups will work through the Venison Alliance Information Pack which will be sent to all persons on the existing mailing list and other interested persons. This Information Pack will include documents that applicant groups can use to provide their expression of interest in creating the alliance through attending the workshop.

WHAT WILL BE FUNDED IN STAGE 1 (KICK STAGE WORKSHOPS)?
RIRDC will fund the hire of a suitable venue and a workshop facilitator and will provide funding to support the costs of producers attending the workshop ie.

• accommodation at up to $60 per attendee;
• lunch, morning and afternoon teas up to a total of $1000;
• one dinner up to a total of $50 per attendee;
• facilitator costs for preparing the application (up to $2500) and facilitation (up to $1500);
• subsidies for the cost of travel for the consultant and the Alliance Contact Person.

If members of the group are required to travel more than 250kms to attend a meeting, RIRDC will pay up to $150 towards the cost of travel for one person per business entity payable upon presentation of receipts and proof of elegibility (member of a group and signatory to the expression of interest form) as provided by the contact person. The location of the venue and the originating point for persons requesting travel assistance should be included on the application form.

HOW CAN WE FIND AN APPROPRIATE BUSINESS CONSULTANT?
We do not have a register of business consultants as it would not be ethical for the Australian Government to recommend particular businesses. However, the Yellow Pages provides lists of business consultants under the heading ‘Small Business Advisory Services’.

SHOULD WE USE THE SAME CONSULTANT TO WRITE THE APPLICATION AND PRODUCE THE BUSINESS PLAN?
While you can use different consultants to prepare your application and the business plan, it was suggested by particpants at the workshop that economies would be more likely if the same consultant prepared both documents and thus didn’t require briefing prior to the preparation of the business plan. It is strongly recommended that the consultant to be used for the Stage 2 Business Plan development attends the Kick Start Workshop.

CAN A BUSINESS BE PART OF MORE THAN ONE ALLIANCE?
Membership of more than one alliance can give rise to conflicts of interest and is therefore not recommended. Whilst not prohibited, having participants with interests in other alliances may be a negative factor in the steering committee’s assessment of an alliance’s viability and prospects when considering funding applications.

WHAT IS INVOLVED IN STAGE 2 OF THE PROJECT?
Stage 2 includes the development of a Commercial Alliance Business Plan for endorsement by the alliance members and the Program Steering Committee. While some progress towards the development of a plan will have occurred in the Kick Start Workshop, this stage includes professional assistance and advice along with further investment of alliance members time and skills. At this stage, alliance members will need to be able to show the market opportunity for their alliance product together with the need to build market focused capability to deliver the value promised at acceptable profi t and risk. A template will be provided on the RIRDC website as a guide, however other formats containing this information or more will be considered.

HOW CAN WE GET FUNDING FOR STAGE 2?
Support for this stage of the process will be dependent upon a successful outcome from the Kick Start Workshop. Alliances will be able to apply for funds for engagement of an experienced professional consultant for business plan development and for funds to progress meetings of the alliance. Th is will include funds for hire of a suitable venue and a workshop facilitator to assist with the endorsement and review of activities, as well as assistance to support alliance members participation costs. Support will be determined on a case by case basis and is designed to ensure that participants partly contribute to the expenses.

WHAT ACTIVITIES ARE COVERED BY STAGE 3 FUNDING?
This funding will support ongoing initiatives that are important to provide the conditions necessary for ongoing alliance growth under the business plan and to resolve commercially signifi cant problems or challenges impeding the alliances’ success under the endorsed business plan. Th ese problems could be of a technical, marketing organisational or business management nature. Funding will be provided for any alliance identifi ed priority where the alliance can demonstrate to the Steering Committee that the issue to be addressed is either limiting growth of the alliance or interfering with the implementation of the business plan AND it is reasonable to expect that the alliance development strategy will contribute signifi cantly to resolving this problem.

Funding for stage 3 assistance will be possible once the group is fully established and operating under an endorsed business plan.

Projects will be assessed according to current scale, growth potential, economic viability, potential market outcomes and relevance to addressing a critical success factor.

WHAT FUNDING IS AVAILABLE FOR STAGE 3 ACTIVITIES?
Funding of up to $100,000 will be provided for each alliance development initiative. A precondition for stage 3 funding will be documentation of mechanisms for determining how project funds are expended, timing for delivery of progress reports, and monitoring of alliance success factors.

WHO CAN I CONTACT FOR MORE INFORMATION AND COPIES OF THE PAPERS DISTRIBUTED AT THE MEETING?
For more information on this process, please contact:
Dr Laurie Denholm Research Manager
Rural Industires Research & Development Corporation
Ph: (02) 6365 5482 (home)
Fax: (02) 6365 5560
Mob: 0418 641 957
Email: denholml@bigpond.com

OR

Ms Annette Sugden
Senior Reseearch Manager
Rural Industries Research & Development Corporation
Ph: (02) 6271 6497
Fax: (02) 6272 5877
Email: annette.sugden@rirdc.gov.au

In fact, John DeLaine, current director of the business, says he literally ‘cut his teeth’ in the business, working alongside his father since the first carcass was sold in 1978. Now, with his wife, son and daughter working alongside him and with one locally-based employee, John sees establishment of business alliances as a critical part of the success of his future and his local community.

John and his team have already established several of the key links in his supply chain, all part he says of ensuring a quality assurance process that is critical to the ongoing competitiveness of the business. John:

• has recently established interstate supply links;
• takes control of transport systems to ensure his stock are not stressed;
• operates his own boning room;
• has ISO9002 accreditation for production and transport of meat and meat products; and
• has established sales points in restaurants, markets and wholesalers – both in South Australia and interstate.

“Loyalty, quality and consistent product are integral to achieving a successful alliance along with a clear picture of where you’re heading”, he said. “We’ve all seen massive changes in the industry over the past twenty years with the rise and fall of hobby farmers, changes in the value of venison and velvet, and the closure of critical abattoirs.

Today its all about targeting – defining what our market wants, delivering a high quality, reliable product, and making sure your supply chain can support it. Already I’ve been talking to others in allied industries so we can take advantage of this opportunity presented by the RIRDC Deer Research and Development Program to build our alliances, both formal and informal, in a more proactive way”.

Deer R&D Advisory Committee

Chairperson Ms Nola Anderson	(03) 5626 7013
Committee Members Mr Ian Dowsett Mr Alf Leysen Assoc Prof Robert Mulley Dr Paul Presidente	(02) 6368 3612 (02) 4570 1307 (03) 9217 4393 (02) 6271 6497
Senior Research Manager Ms Annette Sugden	(03) 5965 2106
Research Manager Dr Laurence Denholm	(02) 6365 5482
RIRDC Office Level 2, 15 National Circuit BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604	(02) 6272 4819 (02) 6272 5877 (fax) Email: rirdc@rirdc.gov.au

 

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Last Update March 2006