April 23, 2010

Global meat and egg sectors to face more challenges

During the VIV Europe on April 20, Rabobank analysts, Dirk Jan Kennes and Albert Vernooij, identified the challenges that the global meat and egg sector face with the rapidly changing consumer attitude and behaviour towards food.

"Consumer demand for meat will become even more heterogeneous towards 2020," senior industry analyst Dirk Jan Kennes said. "Next to intrinsic product quality parameters (e.g. taste, pathogen free), animal welfare and environmental parameters become more important in consumers' buying behaviour, especially in developed countries."

Sustainability determines opportunities in developed countries, especially in the European markets where competition is intensifying as consumption stagnates and production increases. Sustainability involves animal-friendly accommodation, low-emission housing systems that fit in with the surroundings, manure disposal and regionally closed cycles. In the short run, opportunities lie mainly in Northern and Northwest Europe where the markets set strict requirements for sustainable meat production.

On the other hand, in emerging markets, demand of meat is driven by changing diet patterns due to growing world population, rising standards of living and urbanisation. This will heighten competition as demand is outstripping production in many of these countries given the scarcity of raw materials. This makes availability of sufficient raw materials crucial for the development of the meat industry in these countries.

China in particular is facing the dilemma of importing more raw materials to produce meat locally or to import the meat directly. Driven by the growing food industry and the fact that pigs are less sensitive to diet compositions, pork production is likely to stay in China. Poultry relies heavily on straight quality grains and oilseeds. Therefore, it can be expected that China accept poultry imports when negotiations ask for it.

"The shift to more sustainable production of eggs is increasing as the consumer demand for these products is growing in Europe", said industry analyst, Albert Vernooij. Retail is increasingly banning cage eggs in favour of free range eggs driven by both pressure from animal welfare organisations and the European cage ban on January 1, 2012. Globally, egg demand will continue its steady growth. Due to its low price compared with other proteins, eggs are the first protein for consumers moving from a grain-based to a protein-based diet.