Transcript Document

BRITISH POULTRY COUNCIL
The Voice of the British Poultry Meat Sector
John Reed – Chairman
April 23, 2013
ABOUT BPC
 Voluntary trade association representing British poultry companies
and 90% of the British poultry meat industry
 Chickens, turkeys, ducks and geese
 Member of AVEC (Europe) and IPC (global)
 Covers the entire poultry meat chain – primary breeding, hatching,
rearing, slaughtering, primary and further processing
 Works closely with associated trade bodies (NFU, BEIC, Red Tractor,
BRC…)
BPC MEMBERS
SPECIES (MILLIONS
BPC (2012)
OF BIRDS/YEAR)
CHICK PLACEMENTS (MILLIONS)
DEFRA (2013)
POULTRYMEAT CONSUMPTION
BPC (2013)
CONSUMPTION IN THE UK (TONNES/YEAR)
DEFRA (2011)
LEADING BROILERS PRODUCERS
IN
EUROPE
MARKET OVERVIEW
THE MACRO ENVIRONMENT
Total Grocery 12 w/e YoY% Change
-5
0
5
10
15
20
25
30
35
Aldi
Lidl
Iceland
Waitrose
Other Multiples
Sainsbury's
Symbols & Independents
Total Grocers
3.7
Total Asda
Tesco
The Co-operative
Morrisons
Source: Kantar Worldpanel, 12w/e 17th February 2013
The Squeezed Middle
 Less disposable income & increased pressure from the rising cost of living
 This has resulted in a marked change in shopper behaviour which looks set to stay- the rise of
the Discounters and the squeezed middle is just one impact
 Consumers are clearly managing the impact of inflation by maintaining tighter control over
their budgets, seeking out the best deals and selective down trading- by either visiting cheaper
supermarkets or buying cheaper products. i.e. private label instead of branded.
 Shoppers reduce the size of their main weekly shop and visit the supermarket more
frequently throughout the week, smaller top up shops, reducing waste and allowing for tighter
control over their budgets.
 This has had a knock on effect on promotional mechanics- Price reduction is now favoured
over Y for £X and multibuy deals
HOW HAS THIS IMPACTED FRESH CHICKEN?
Beef
£6.68 / kg
Chicken
£4.22 / kg
Lamb
£8.67 / kg
Pork
£5.08 / kg
In the same way that savvy shoppers have been trading down into cheaper supermarkets and less expensive products we
have also seen switching into chicken from other proteins. This is as a result of both price and perceived health benefits.
Source: Kantar Worldpanel, 52w/e 17th February 2013
HOWEVER
WHILST CHICKEN IS CHEAPEST OVERALL…
As the most popular cut of chicken, breast meat is expensive when compared to other popular cuts of
protein
£11.72
Fresh Salmon Fillets Ave RSP
£5.18
Fresh Pork Chops Ave RSP
£10.46
Fresh Lamb Chops Ave RSP
£4.97
Fresh Minced Beef Ave RSP
£7.09
Fresh Turkey Breast Fillets Ave RSP
Fresh Chicken Breast Fillets Ave RSP
£0.00
£7.69
£2.00
£4.00
£6.00
£8.00
£10.00
£12.00
£14.00
As a result we have seen
a shift in the interaction
between tiers and
individual cuts within
Fresh Primary Chicken.
Consumers have been
switching spend from
Organic and Free Range
chicken into Standard
and Value.
Whilst breast meat sales remain strong there is a clear decline in penetration as shoppers switch into dark
meat (+9.8% Value YoY) in favour of its lower price. Whole Birds are also popular for their lower £/Kg,
leftovers can also be used to produce second meals or sandwiches.
Source: Kantar Worldpanel, 52w/e 17th February 2013
Fresh Primary Chicken YoY% Change
Source: Kantar Worldpanel, 12w/e 17th February 2013
The rise of the Discounters
has also been very evident
in Fresh Chicken and they
have been stealing spend
from the Top 4….
The retailers have placed real emphasis on their quality credentials whilst maintaining low prices. They
also generally opt for TPR mechanics over Y for £X and multibuy.
WHAT IMPACT WILL THE HORSE MEAT SCANDAL HAVE ON FRESH
CHICKEN?

Expect to see increased switching from Red Meat into Chicken- particularly whole muscle

No evidence to suggest that there has been any impact on individual retailers but will consumers
become less trusting of those involved?

In the 12 weeks ending 17th February 2013 there was a 43% value reduction in frozen burger sales
and a 13% value decline in frozen ready meals

Increase in the number of shoppers visiting butchers to purchase their fresh meat- It is likely that
the scandal may impact value tiered products with consumers becoming unsure about the quality
and source.

Tesco’s Value Fresh Chicken lines have decreased in value by 11% in the last 4 weeks YoY (w/e 17th
February 2013)

The NFU has launched a ‘Buy British’ campaign encouraging shoppers to look out for the Red
Tractor logo

Tesco have also announced that from July they will be sourcing all of their Fresh Chicken from
British farms- as part of this they will also be committing to a 2 year contract with their producers.
INDUSTRY ADVANTAGE
 Vertically integrated
 Short supply chain
 Concentrated into a few large companies
 High level of control throughout the chain
 Customer driven – no UK or EU subsidies
 Small carbon footprint
INDUSTRY PRIORITIES
INDUSTRY PRIORITIES
Animal health
Affordability
Environment
Recruitment
Animal welfare
Profitability
Food safety
Food security
Human health & safety
Sustainable intensification
FOOD SAFETY AND HYGIENE
 Campylobacter
∞ Leader of Joint Working Group with the FSA, NFU, BRC and Defra
∞ Scientific research, biosecurity measures, on-going trials at farm
and plant level
 Meat inspection regime
∞ Joint work with the FSA to replace visual inspections by
microbiological testing
RESPONSIBLE ANIMAL HUSBANDRY
 Antibiotic stewardship
∞ Continuous review of usage in poultry flocks
∞ Voluntary ban on the use of cephalosporins in poultry
production
 Welfare at slaughter
∞ Implementation of the EU legislation on the Protection of
Animals at the Time of Killing
 UK Poultry Health & Welfare Group
∞ BPC, BEIC, GFA, NFU, BVPA
CAREERS & SKILLS
Goals
- Attract, recruit, train, develop and retain quality people for the sector - Demonstrate professionalism and skills ∞ Annual scholarships in partnership with Harper Adams College
∞ Poultry apprenticeship
∞ British Poultry Training Programme / Poultry Passport
∞ Awareness & education program in schools
ECONOMIC & SOCIAL CONTRIBUTION
 35,000 direct employees + 35,000 indirect employees
 2,500+ farms and 30 food production sites across the UK
 Contribution to the economy:
∞ farmgate value £2.25bn
∞ retailer level £4.5bn
∞ food service sector £2.5bn
 On-going work to facilitate exports of breeding stock &
poultry meat
SUSTAINABLE FOOD SECURITY
 Responsible sourcing of feed ingredients such as soy or
wheat
 Environment-friendly policies and standards
 Large scale farming to meet the demands of a growing
population
THANK YOU FOR YOUR ATTENTION