EXPORT OPPORTUNITIES FOR IRISH ORGANIC BEEF PRESENTED BY JOHN PURCELL GOOD HERDSMEN LTD.
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1 EXPORT OPPORTUNITIES FOR IRISH ORGANIC BEEF PRESENTED BY JOHN PURCELL GOOD HERDSMEN LTD.
2 INTRODUCTION: Good Herdsmen established in 1989 by Josef Finke. Opened Ireland s first independent organic meat processing factory in Good Herdsmen organically farm 780 acres in the Tipperary area. Winter feed on own farms plus B&B arrangements cattle per year. We supply to most of the Irish multiples their organic beef requirements. Established export markets in U.K., Sweden, Denmark and Germany. A.I.B.P. now a 50% shareholder in Good Herdsmen, John Purcell retaining the other 50%. A.I.B.P will continue to source its own organic livestock for their own existing customer base. Good Herdsmen will continue separately to supply its existing customers and further develop our customer base, particularly in the export market.
3 WHO ARE THE MAIN PLAYERS IN IRISH ORGANIC MEAT PRODUCTION? As the Irish organic market has continued to grow, increased professionalism in processing and distribution has begun to develop. The majority of organic meat is now distributed in a similar manner to conventional produce. The major organic beef processors that focus on exports are as follows; - Good Herdsmen ltd - A.I.B.P - Slaney Meats (Leitrim Co-op) The above companies supply Tesco (Ire), M.S.V.C, Lidl, Superquinn, Dunne s Stores & Marks & Spencer's with their organic meat requirements. These retailers represents 90% of the Irish grocery market.
4 MAIN PLAYERS CONT.. On the export front, ourselves and some of the other mentioned companies supply Tesco U.K, ASDA UK, Marks & Spencers UK, Wholefoods UK, wholesalers in Denmark, Holland, Germany, Italy, France & Sweden. Irish Organic Beef is now well positioned in Europe through the hard work of some of Irelands best meat companies. With the ongoing support of Bord Bia we hope to expand these markets especially in France & Germany. Ireland can also boast that there are several other excellent domestic farm sales establishments set up, namely Omega Beef, Coolanowle Organics & Drumeen Farm to mention a few.
5 CURRENT STATE OF THE MARKET It is well known that the European organic food sector has been having a hard time since the recession hit sales in 2008/09. Meat sales dipped 17% in this period. However there is strong evidence that all the major European retailers are still stocking organic meat as consumers are still willing to pay a premium for provenance and traceability. Organic meat sales have recovered and have actually increased their market share from 2007/2008 figures. This is good news as it s the first test that organic food sales had to go through since the 1990 s. They have held up well and proven yet again that organic is not a fad.
6 CURRENT STATE OF THE MARKET As more and more organic cull cows hit the European market and end up retail packed particularly in UK, Holland, Germany & France. We find consumers are not just content with the safe food labels. They now also demand quality. Ireland can fill this gap as demand increases for better eating quality coupled with traceability and organic certification. Good Herdsmen have recently introduced a premium beef product in Germany. It s selling at about 20% above locally produced cow beef and sales are increasing weekly. A contract with a major organic food processor in Germany is just about to be signed with Good Herdsmen. This contract will be for 150 tonnes of organic beef This is equivalent to an extra 700 cattle per year.
7 WHERE DO WE LOOK FOR NEW OPPORTUNITIES Domestic market fairly well-saturated, running at approx.75% of overall meat sales = European average 1%. Export market opportunities are huge, particularly in branded retail skin packed beef. If Ireland continue to export organic primal beef there are no certainties for the future. Must brand and add value to our export products. Organic meat processors must focus on branded organic meat exports to secure a future for Irish organic farmers. Organic meat processors don t need to look any further than mainland Europe to find secure markets. Good Herdsmen have already begun to develop this market with a 21 day self life branded organic retail meat product.
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9 IDENTIFYING THESE MARKETS (ORGANIC BEEF) No need to do extensive research Bord Bia have already done the hard work and analysis. Let s follow the conventional meat sectors successful lead into European markets. Over 462,000 tonnes of Irish conventional beef was sold onto European markets in 2009 = 2.2m cattle. Approx 5,500 organic cattle were slaughtered in Ireland last year. 3,000 of these were sold on the domestic market, the balance exported. If we aim to sell.5% of the conventional meat exported we would need an additional 8,500 cattle per year. I can t see any reason why we cannot process & distribute an additional 8,500 organic cattle per year on the European market.
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11 The Organic Beef Opportunity According to D.A.F.F statistics, there are currently approx 32,000 organic cattle in the system. Leave out the diary cows, calves & replacements the balance should be the beef herd: 0-6 months 2, months 5,000-1/3 suitable for 2011 slaughter 6,600 cattle available months 5,000 - Suitable for 2011 slaughter for slaughter months 1,000 Total 13,000 Good Herdsmen see no issues marketing this amount of cattle in With excellent prices currently being paid to suckler farmers for their young stock Good Herdsmen hopes it might encourage new farmers into this sector. If we benchmark the.5% rule of continental export sales Irish organic meat processors will need an extra 8,500 cattle to fulfil this forecast. In addition to the European market the emergence of a highly educated and financially stable upper and middle classes in countries like India, China, Russia and Turkey, leave huge opportunities for our quality Irish organic beef product.
12 Challenges / Concerns Ireland an export nation need to have our organic beef priced the same or below UK prices. Currently Irish organic beef is 8% more expensive than UK Must lower our cost base to stay competitive. Awaiting statistics from D.A.F.F. re. organic calf births in Suspect a drop of 20% from Worrying trend pressure on prices. Organic brand under threat from locally sourced free from free range, Fair Trade etc. Need to come together as an organic community one voice. Plans are underway to create an Irish Organic Trade Board I would recommend that we all support it we need a voice. Domestic organic herds are growing in France, Germany & Austria This will lessen demand in these countries for an imported product We must establish our brand Organic Ireland to ensure market share in the future. A better distribution of the organic kill is needed, too many cattle in Sept - Oct, poor supply from Feb June.
13 Initiatives Good Herdsmen have finally put together a database of every organic beef farmers in the country, this will give us better information to forward plan our marketing strategy. Good Herdsmen have secured business in Europe for the difficult organic F.Q. cuts. Investing 100k purchasing specialised processing equipment to produce this F.Q. product. Huge investment currently underway building additional wintering housing for 300 cattle should take pressure off during the winter months. Continue to exhibit our range of products at Bio Fach Germany, Sial France and at upcoming largest platform for meat showcase Anuga Germany in October. Recently opened Europes first dedicated organic cooked meat facility in Cahir. This will allow us to add more value to our round cuts. Good Herdsmen are investing in the future for the Irish organic beef industry. We offer European retailers & processors the best quality product using the most up to date modern packing solutions. Irish Organic Beef is our future too We believe your Organic Beef is in good hands
MARKET OPPORTUNITIES FOR IRISH ORGANIC MEAT PRESENTED BY JOHN PURCELL GOOD HERDSMEN LTD.
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