Dunbia International markets for beef and lamb - NFU

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 (Ayr)
                                                             (beef & lamb & pork packing)

 Dunbia (Dungannon)                                                    Dunbia (Sawley)
 (beef, lamb, pork & retail packing)                                   (beef)

                                                                      Dunbia (Preston)
                                                                      (beef, lamb & retail
                                                                      packing)
                   Dunbia (Slane)
                   (beef)
                                                                      Dunbia (Mansfield)
                                                                      (Pork)

            Dunbia (Kilbeggan)
            (beef boning)                                              Dunbia (Nantmel)
                                                                       (lamb)

                                       Dunbia (Felin Fach)
                                                                      Dunbia (Llanybydder)
                                       (beef packing)
                                                                      (lamb & retail packing)

Growth in world meat consumption

Share of meat consumption growth, 2010 – 2020 (%)

  Source:
   Source:GIRA
           OECDLong
                 andterm
                     FAOmeat study
                         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
    •    Highest prices paid, provenance valued by
         consumer
•   Europe
    •    Lower prices paid, no export difficulties,
         weaker reputation of UK product in Europe
•   Asia
    •    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
     •   You must understand your market

 •   Volume is critical
     •   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