Northern Ireland Sainsbury`s Dunbia steering group

Dunbia
International markets
for beef and lamb
Dunbia Today …
• Europe’s largest Lamb processor
• Processing 2,000,000 lambs per year
• The UK’s second largest Beef processor
• Processing 400,000 cattle per year
• The UK’s fourth largest Pork processor
• Processing 850,000 pigs per year
Dunbia Production Sites
Dunbia (Elgin)
(beef & lamb & pork)
Dunbia (Ballymena)
(Pork)
Dunbia (Dungannon)
(beef, lamb, pork & retail packing)
Dunbia (Ayr)
(beef & lamb & pork packing)
Dunbia (Sawley)
(beef)
Dunbia (Preston)
(beef, lamb & retail
packing)
Dunbia (Slane)
(beef)
Dunbia (Mansfield)
(Pork)
Dunbia (Kilbeggan)
(beef boning)
Dunbia (Nantmel)
(lamb)
Dunbia (Felin Fach)
(beef packing)
Dunbia (Llanybydder)
(lamb & retail packing)
Growth in world meat consumption
Share of meat consumption growth, 2010 – 2020 (%)
Source:
Long
study
Source:GIRA
OECD
andterm
FAOmeat
Secretariats
5
Increase in meat demand, by region to 2020
Source: OECD and FAO Secretariats
6
Income vs meat supply
Source: FAO 2012
Meat supply and consumption
Source: FAO 2012
Source: FAO 2012
Global Bovine Density
World beef exporters
International beef trade
Source: GIRA
12
International sheepmeat trade
Source: GIRA
13
What drives purchasing?
• Consumers purchase according to
want and need
• Five areas are considered above all
else
1.
Value (what I pay for what I get)
2.
Product quality (eating quality, appearance)
3.
Product attributes (healthiness, life, safety,
welfare, traceability, environment)
4.
Convenience (packaging, ease of cooking, ease
of storage etc.)
5.
Provenance (where is it from, what breed, what
story)
What customers expect
1. The food is safe
•
Free of harmful bacteria?
•
Healthy for me to eat?
2. The food eats as I expect it to
•
Relatively tender, pleasant taste
3. The animals which provided the food were treated well
•
What is the standard which is expected?
•
Free range, inside/outside?
What customers want
1. The food is good value
2. The eating quality is consistent
– I know what I’m getting
3. The meat is tender
4. The meat tastes excellent
5. Eating this is good for me
6. High animal welfare
7. Regionality
Customers differ
1. Customers pay more for home
produced product
2. Low cost is more important for
markets where there is no
attachment to the source
3. Reputation is important –
particularly in areas which
have experienced food scares
4. Reputation has to be built
slowly
Carcass balance
• Carcass trade much less
significant than previously
• Trade in primals, moving to
retail packed products
• Carcass imbalance reduces
carcass value
• A successful business will
combine UK and export sales
18
Building international reputation
•
What are the key attributes required?
•
Depends on the market
1. Disease free?
2. Quality?
3. Animal type?
4. Price
5. Safety?
Building international reputation
•
UK
•
•
Europe
•
•
Lower prices paid, no export difficulties,
weaker reputation of UK product in Europe
Asia
•
•
•
•
•
Highest prices paid, provenance valued by
consumer
Market for lower value products
Potential for higher value over time
Market access very difficult
Brand is very important
North America
•
•
Potential for export relatively limited for
some time
Market access and repeat business difficult
Fitting ourselves for the market
•
Homework on market is
essential
•
•
Volume is critical
•
•
You must understand your market
Gives access and a degree of control
If you can’t be big, what are
the alternatives?
•
•
Niche
Access to smaller, higher paying
markets
Ireland
Origin green
•
•
•
•
•
•
Reputation for clean, green,
high quality product
Utilising a reputation which is
already a known component
Picking key points to raise
integrity and enhance sales
potential
Industry wide campaign
Not easy, but necessary
Government backed
Other countries
•
Uruguay – green, traditional
cattle
•
Brazil – quantity, price,
consistency
•
Australia – quantity, price,
consistency, high quality for high
paying markets
Market access
• China
– Brand (safety as key driver)
– Price
– Certification – approval for full
process flow
• North America
– Product type
– Price
– Integrity (meeting key
standards)
24
Market access
• Government involvement often
essential in gaining market access
• Market development work essential
– levy bodies and commercial
companies
• Joint marketing often helpful
25
Markets change
• Demand for different products
changes over time
• Demand for product attributes
change
• Far East
– Now rejecting plant offers because
they have choice
– There is oversupply, particularly in
beef and so they select the plants
they want to buy from
– Standards must be high
26
Market volatility
•
•
•
•
•
Export markets can be volatile
Price rises and falls
Demand on and off
Borders can close overnight
Alternative markets need to be
found immediately
• A business should have a base
of long term, stable contracts.
27
Risk
• Export markets can be
high risk
• Lack of availability of
credit assurance
• Anybody can sell
• Can you get paid?
• Choosing the customer is
essential
28
Scale
• UK is a small player
• Variability is a problem
• UK – 38,000 cattle per
week
• Ireland – 34,000 cattle per
week
• Tyson (USA) – 45,000 per
week
• JBS (Brazil) – 51,000
• Per day
29
So what do we do?
• Recognise that UK is our main market and our most
high paying for many products – we have a market
that others are fighting for.
• Identify other markets which can add value to our
product
• Identify what we can do that others can't
• Do whatever we do well
• Recognise that reputation is everything
• Build strong stories and strong relationships
30
Thank you
31