Dunbia. International markets for beef and lamb

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1 Dunbia International markets for beef and lamb

2 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

3 Dunbia Production Sites Dunbia (Ballymena) (Pork) Dunbia (Dungannon) (beef, lamb, pork & retail packing) Dunbia (Elgin) (beef & lamb & pork) Dunbia (Ayr) (beef & lamb & pork packing) Dunbia (Sawley) (beef) Dunbia (Slane) (beef) Dunbia (Kilbeggan) (beef boning) Dunbia (Felin Fach) (beef packing) Dunbia (Preston) (beef, lamb & retail packing) Dunbia (Mansfield) (Pork) Dunbia (Nantmel) (lamb) Dunbia (Llanybydder) (lamb & retail packing)

4 Growth in world meat consumption

5 Share of meat consumption growth, (%) Source: GIRA OECD Long and term FAO meat Secretariats study 5

6 Increase in meat demand, by region to 2020 Source: OECD and FAO Secretariats 6

7 Income vs meat supply Source: FAO 2012

8 Meat supply and consumption Source: FAO 2012

9 Source: FAO 2012

10 Global Bovine Density

11 World beef exporters

12 International beef trade Source: GIRA 12

13 International sheepmeat trade Source: GIRA 13

14 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)

15 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?

16 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

17 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

18 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

19 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?

20 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

21 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

22 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

23 Other countries Uruguay green, traditional cattle Brazil quantity, price, consistency Australia quantity, price, consistency, high quality for high paying markets

24 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

25 Market access Government involvement often essential in gaining market access Market development work essential levy bodies and commercial companies Joint marketing often helpful 25

26 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

27 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

28 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

29 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

30 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

31 Thank you 31