It sells for more than US$3,700 (S$4,862) a jar at Harrods in London, with the price pushed higher by the kind of superfood branding and celebrity endorsements that turn a simple kitchen staple into a luxury product. 

Demand for manuka honey, which is produced by bees that pollinate New Zealand’s native manuka bushes, surged during the pandemic as buyers around the world searched for elixirs to keep them healthy.

The high prices it commanded pushed Kiwis to try their hand at beekeeping as a side hustle.

But now, in a classic boom-and-bust tale, there is an oversupply of the once-rare product and beekeepers are struggling to cover soaring production costs as exports soften and prices plunge for all but the very best honey.

“The beekeepers are hurting a lot,” said Mr Patrick Dawkins, who keeps bees in Marlborough on New Zealand’s South Island and edits the trade journal Apiarist’s Advocate. 

“The guys that have been willing to stick it out are really struggling to make it economic and a lot are going out of business.”

It is a far cry from the boom years, which transformed the humble craft of beekeeping into a brutally competitive industry featuring organised crime syndicates stealing hives and fraudsters selling counterfeit products. 

“Every single little plot of land around here had hives on it,” said Mr Maru Hoani, a beekeeper from Hokianga at the top of New Zealand’s North Island. 

“A lot of the people weren’t really in it for the love of it, they were just doing it to make quick money.”

The 32-year-old has been involved in apiculture since he was 17, working for a commercial beekeeper before starting his own business.

For years, he watched prices for manuka honey go up and up. But, after peaking around NZ$64 (S$54) per kilogram, prices tumbled to about NZ$13 this season.

The income is not enough to cover his costs, which include tests to grade the honey, disease control and fees to landowners. Now, Mr Hoani says he is on the verge of exiting the industry.

Manuka madness

Dark and strong-flavoured, manuka honey hit the world market in the 1990s. It spread in popularity thanks to celebrity endorsers and its antibacterial properties.

Times were so good that in 2015, Mr Brett Hewlett, then chief executive officer of New Zealand-listed honey maker Comvita, told Bloomberg News the product was “quite literally liquid gold”.

Then came 2020. The first year of the pandemic saw a huge honey harvest of 27,000 metric tons, 42 per cent above average, as good growing conditions coincided with a peak in the number of beehives.

Export revenue hit a record for New Zealand honey products in 2021 at US$313 million. But honey’s long shelf life proved to be a weakness, as buyers rarely had to replenish their reserves.

New Zealand’s export revenue from honey fell 6 per cent to US$295 million in the year ended June 30, according to the Ministry for Primary Industries.

“We’ve had a correction and it has been painful, there is no doubt about that,” said Ms Karin Kos, CEO of Apiculture New Zealand.

“We’ve obviously got an oversupply of honey around the country. It’s not going to turn around immediately.”

Still, Ms Kos is optimistic about the industry’s future.

She said New Zealand’s recently signed Fair Trade Agreement with Britain should boost exports, while a deal with European Union could help too.

Domestically, the post-pandemic return of tourists to New Zealand should help demand, she added.

So far, the value of top-quality manuka honey appears to be holding up even as prices fall at the middle and lower end. 

The best product was fetching US$104 a kilogram in the year to June, up from US$78 a year earlier, according to data from the Ministry for Primary Industries. 

Still, those numbers can be misleading, Mr Dawkins said.

The industry is opaque, with sales happening on a contract-by-contract basis, so it is tough to know how many producers are getting top dollar for luxury-grade honey.

“There might be only a couple of tons of that in all of New Zealand,” he said. 

“The real story is about the hundreds of tons of almost-as-good stuff. Those guys aren’t getting anything like those numbers.” 

Not so easy

As a result of the downturn, beekeepers are leaving the industry, with the number of hives now down 20 per cent from the 2019 peak to 730,000.

Many of those giving up are newcomers who jumped in when the prices were high.

“They perhaps didn’t have a beekeeping background,” Ms Kos said.

“I think there’s a realisation that actually it requires a lot more expertise and knowledge than they have.”

The 230g jars of “rare harvest” honey that sell for US$3,755 in London are made by Mr Jim McMillan, founder of the True Honey, which specialises in the production of high-graded honey.

Mr McMillan helicopters beehives into remote bushland, which is inaccessible by motor vehicles and largely pollution-free. He said demand for his product is holding up. 

“It’s certainly not a cheap exercise or a simple exercise,” he said. BLOOMBERG