Bord Bia's Meat Marketing Seminar 2018 – Event Highlights

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Bord Bia's Meat Marketing Seminar 2018 – Event Highlights

 

Date:05/01/2018 

 

Bord Bia’s Meat Marketing Seminar today brought together over 150 major players in the Irish meat industry at government, producer and processor levels to receive updates on meat market developments and insights from Bord Bia.

Here are some of the stories of the day:

  • Meat Market Overview
  • New study reveals British consumer attitudes to buying Irish
  • Focus on beef in China
  • About the seminar
  • Sectoral Outlooks

Meat Market Overview

At the seminar, Bord Bia revealed that last year was the strongest year on record for meat exports against a difficult backdrop, with meat exports worth €3.8 billion and accounting for 30% of Irish food and drink exports. Beef exports grew by 5% to €2.5 billion; poultry exports rose by 3% to €295 million; pigmeat exports jumped 14% in value to €712 million, while lamb exports saw an increase of 12% to €274 million. There were strong performances in the UK and international markets, and generally robust performances across continental Europe. The UK figures are noteworthy given the slippage in Sterling since 2016, while international developments show the extent of the opportunities out there.

Speaking at the seminar, Bord Bia’s CEO, Tara McCarthy said, “Developments such as increased market access this year, set alongside trade figures, can leave us in no doubt about our meat industry’s ability to be competitive globally. Population growth, growing consumer affluence and greater demand for meat are creating a long-term opportunity for us, while Bord Bia’s commitments to quality, sustainability and consumer insight mean we’ve never been better placed to capitalise on them. Bord Bia is working strategically with the industry to anticipate and respond to the new market realities when faced with Brexit and other challenges.”

Bord Bia also announced that it is devising a marketing strategy for the meat Industry. This strategy is being developed in the context of a number of key factors and challenges which are and will impact on the industry over the next period. These include the impact of Brexit, international trade deals, access to new markets, environmental challenges and changing consumer attitudes and trends. The aim of the strategy is to provide strategic guidance to the Irish meat industry for the next five years. A strategy steering group representing key industry stakeholder and agencies has been established which will input into the strategy as it evolves for beef, lamb, pigmeat and poultry.

New Bord Bia study reveals British consumer attitudes to buying Irish

Bord Bia, in conjunction with research partner Kantar, recently carried out a study with over 1,300 British shoppers, who were asked about their attitudes to provenance and awareness of producers in various markets. Topline results are as follows:

  • Almost half of all British shoppers actively look to buy British and Irish food, showing a desire to choose Irish produce where possible
  • Irish food considered local by 39% of British shoppers, showing a clear link between the two countries differentiation with mainland Europe.
  • For fresh meat, this rises significantly to 60%, showing how strong the image is for British shoppers of Ireland as a key beef producer.
  • Meat provenance is more important than other food types for British shoppers, especially beef, where 80% say it is important for them.
  • Some 73% of British shoppers are aware of Ireland as a beef producer, up by 2% on last year
  • The likelihood of shoppers to purchase Irish beef has increased significantly from last year, from 76% to 81%.
  • Ireland is the second most top of mind pork producing nation behind only England and far ahead of any mainland European nation
  • While three quarters of British shoppers have a positive intention to buy Irish lamb, just as much as New Zealand

Focus on Beef in China

As Ireland moves closer to being the first major EU country to secure market access to China for beef, the importance and potential of the market was highlighted by Conor O’Sullivan, Bord Bia’s Trade Marketing Specialist in Shanghai. He said that, with rising incomes and urbanisation, Chinese consumers’ appetite for beef is growing faster than any other animal protein. The average Chinese person is consuming close to 6kg per year and it is foreseeable that consumption will rise to match those levels over the coming decades. For every additional kilogram the average Chinese eats, beef demand will grow by nearly 1.4 million tonnes. China's domestic production will not be able to keep pace. Since 2012, China's official volume of beef imports has grown nearly tenfold, making it the second largest importer of beef in the world. Imports are approved from thirteen countries, with more expected this year. Ireland is likely to be among them.

Bord Bia sees the opportunity and gap for Irish beef in restaurant chains and ecommerce channels as opposed to retail and foodservice which are highly fragmented with equally complex supply chains. Ecommerce companies are beginning to dominate retail and have "fresh" produce in their sights. The emergence of restaurant chains is allowing a move to centralised purchasing and kitchens. Supply chains are becoming simpler, and the opportunity for marketing stronger. Bord Bia is targeting key ecommerce and foodservice accounts in China, working with their supply chain partners to develop a clear and controlled route for Irish beef all the way to the consumer.

Bord Bia is currently promoting EU beef and lamb across China, Japan and Hong Kong in a campaign valued at €3.75 million. The EU beef and lamb campaign allows Bord Bia to promote Irish and EU beef and lamb in these expanding markets at a very opportune time. Bord Bia`s role as leader of the campaign ensures that it is best placed to demonstrate how Irish farmers and processors are delivering on the growing consumer demand for sustainably produced products.

About the Seminar

The event, held today in Killashee House Hotel in Naas, Co. Kildare, provided meat exporters with an overview of market prospects, opportunities and issues facing the sector in the year ahead. Bord Bia’s Meat Sector Managers for beef, lamb, pork and poultry offered market reviews while Bord Bia’s Markets Division presented where the opportunities exist for meat exports following the organisation’s market prioritisation project. Bord Bia also delivered an update on its meat marketing strategy and an analysis of the research and insight projects being undertaken. The Department of Agriculture, Food and the Marine outlined European and International policy developments facing the meat sector and how they are being addressed while Rupert Claxton from GIRA, the International research consultancy specialising in the meat sector, analysed developments in the global market.

Sectoral Outlooks

Beef Market

In 2017, Irish cattle supplies rose by more than 105,000 head or 6.5%. The impact of higher cattle supplies was partly offset by a decline in carcase weights, resulting in a total increase in exports of 4% to 556,000 tonnes. With relatively tight global beef supplies and strong consumer demand, Irish beef exports were largely shielded from the currency effects resulting from Brexit.

Looking ahead to 2018, national slaughterings will increase further, given the growth that is evident in male cattle and beef bred females within the 12-24 month age category. Growing global consumption of beef will be met by a 3% increase in global exports, with production and exports recovering in key exporting countries such as the US, Australia and Brazil. Irish beef exports will focus on diversifying markets, demanding high quality beef, especially in Europe and Asia.

Pigmeat Market

In 2017, Irish pig supplies at meat export plants rose by over 1% to almost 3.3 million head compared to prior year levels. Ongoing low feed costs coupled with stronger producer prices throughout most of the year resulted in higher carcase weights, and left overall pigmeat production around 4% higher at 294,000 tonnes.

Looking ahead to prospects for 2018, Irish pig supplies are expected to stabilise even though there has been some decline in the breeding herd during 2016, as continuous advancement in productivity is expected to offset this trend. The overall market outlook points to increased supplies across the EU and the US reflecting some recovery in producer confidence on the back of improved margins last year. Market prospects will largely hinge on the ability of Asian countries to handle this increase in supplies, with China the number one global importer expected to match 2017 import levels reflecting rising consumption levels combined with slow production growth due to government legislation around the pig industry relocating to minimise the impact of pollution in large cities.

Poultry Market

The number of poultry birds processed in Ireland hit record levels at 96 million head during 2017 reflecting increasing preference for Irish product at foodservice level combined with steady demand at Irish retail level. According to the USDA, global broiler meat production is expected to grow by 1% in 2018 to 91.3 million tonnes, reflecting some increase across key regions such as the United States, Brazil, India and the EU. Increased output from the US and Brazil is being driven by strong export growth due to key competitors being negatively impacted by Avian Influenza.

Sheepmeat Market

2017 was another positive year for the Irish sheepmeat sector as exports are estimated to have reached 56,000 tonnes, a 14% increase on the previous year. Despite the weakness in sterling, the value of exports grew by 12% to reach €274 million. The market diversification evident over recent years was largely maintained with over 45% of shipments destined for markets other than France and the UK in 2017.

Total sheep meat throughputs reached a ten year high, as sheep numbers surpassed 2.9 million head. At €4.80/kg, average producer prices were marginally back by 5c/kg on 2016 largely due to an overhang of hoggets. Nevertheless, average prices for New Season Lambs (May to December) reached a record high of €4.84, equivalent to a 23c/kg above the equivalent period in 2016.