The last decade has been no picnic for the British meat industry. But despite being brought to its knees by a string of food safety crises, a new mood of optimism prevails. The great and good of the UK red meat sector have just spent nine months working out how to breathe new life into this once distinguished industry, as Catherine Sleep reports.
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June 2001 saw the establishment of the Industry Forum for Red Meat, created to help improve the ability of the British red meat industry to satisfy consumer requirements at home and abroad. To do this, it first needs to improve its competitiveness and the quality of the products it offers, and thus its profitability.
The Forum was spearheaded by the Meat and Livestock Commission (MLC), the National Farmers’ Union (NFU), the Department for Environment, Food and Rural Affairs (DEFRA) and the Institute of Grocery Distribution (IGD). It brought together experts from inside and outside the sector, as well as working closely with consumers to find out what they wanted the industry to provide.
Last Tuesday [7 March 2002] the Forum made public its findings in a one-day conference held in London. Its chairman, Peter Barr, opened the session on an upbeat note, reminding onlookers that the UK meat industry is worth a cool £15bn (US$21.34bn) per annum, and that it accounts for some 22% of total food expenditure. While the problems facing the red meat industry are huge (Barr spoke of “costly regulation, a history of under-investment, inadequate transparency, low profitability, mutual distrust and growing import penetration”) so too is its potential for change. Following nine months of methodical research and soul-searching, Barr insisted, “we are ready to respond to the challenges of the Curry Report” he said.*
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By GlobalDataLord Larry Whitty, Minister for Food, Farming and the Waterways, followed this up with a keynote speech during which he confirmed that the Forum would publish a steering document before the end of March, with the aim of announcing the strategy to implement the recommendations from the aforementioned Curry Report in the early Autumn. Lord Whitty stressed that the relationship between government and industry must be one of collaboration; the government will not tell the industry how to farm or trade, but nor is it about to make huge pots of new funding available.
However, it is keen to offer technical advice and help with information, as well as providing as yet unquantified but probably modest sums of money for specific projects. The government, he made clear when talking to the press on the fringes of the event, will be a sponsor rather than a subsidiser of red meat industry recovery as it strives to overcome the chronic structural problems weighing it down.
Asked whether some kind of import control might not be the order of the day, Lord Whitty was quite clear that this was out of the question. The imports ‘threatening’ the UK meat industry are quite legitimate trade, and the ongoing process of market liberalisation cannot be reversed – nor should it be. Indeed, Richard MacDonald, director general of the NFU, agreed quite emphatically that “the marketplace is the only solution” to the woes of the industry. Improvements will come not from subsidies but from farmers getting involved with processing and further up the chain, stripping out costs and becoming more competitive in a free market.
However, one major barrier to a strong UK red meat trade may eventually fall away. Lord Whitty was asked whether the 30-month rule [the rule whereby animals over thirty months of age may not enter the human food chain] was here to stay, or whether testing might soon replace the blanket ban. He expressed optimism that the rule would no longer be in force in five years’ time, thereby allowing this older meat access to the market, with, as he claims, benefits such as improved flavour.
IGD chief executive Joanne Denny announced that a Food Chain Centre will be set up to focus on benchmarking, total quality assessment and value chain analysis, all with the aim of making the supply chain more efficient and better able to deliver goods to the requirements of consumers. The funding structure of this Centre is not yet clear, but it will be a collaborative effort by both industry and government, Lord Whitty confirmed.
As an example of how the supply chain needs to be simplified, Lord Whitty commented that some sheep are involved in as many as eight journeys through dealers and markets between their birthplace and the finishing farm. While some of this is traditional and difficult to change, eight sets of transport costs and changes of management is surely excessive, not to mention the environmental impact of this convoluted journey from birthplace to dinner plate. The Industry Forum is going to address this aspect of the supply chain to try and find ways to simplify it along the lines of, for example, the poultry chain.
Brits still keen meat-eaters – but importers benefit most
Consumers were very much the focus of the day. Public confidence in British red meat must be re-established if shoppers are to have an incentive to choose home-reared products over imported, often cheaper meats. Dr Kevin Hawkins, director of communications at Safeway Stores and a key player in the Industry Forum, had some good news for delegates from the red meat industry.
Hawkins said that vegetarianism is not growing from its current level of 6%, but that the challenge was to drive frequency of consumption. Moreover, consumers are increasingly devoting their food spending to foodservice – this is currently 25% of food expenditure, but experts see it rising to 40% by 2010 and 50% by 2018. This again raises the issue of import penetration; much of the foodservice sector uses a heavy percentage of imported meat.
The Forum devoted considerable resources to finding out what consumers want from red meat. Scientific conclusions were difficult to draw, as consumer reaction was often expressed in vague terms, but the Forum felt consumer expectation of red meat boiled down to three main concerns.
Firstly, shoppers wanted to know that the animals had been fed properly, and that no growth promoters had been used. They also expressed concern over whether they had been kept in humane surroundings. Lastly, consumers were concerned that regular inspections by an independent party had been carried out. Hawkins commented that the consumers surveyed didn’t want to know the details of the production and slaughtering process, they just wanted to have confidence that it had been safe and clean, and that “a bloke in a white coat” had made sure high standards were maintained.
Caution on organics – regional branding also a profitable niche
Inevitably, the issue of organics was raised, and Hawkins commented that the premium price payable was holding back growth of the sector, as was the fact that the intense controversy over GM food has receded in the last couple of years.
Tim Bennett, deputy president of the NFU, voiced concern that too many farmers might convert to the organic sector, thereby creating oversupply and destroying a profitable niche market. He therefore urged farmers considering incurring the costs of conversion to organic production methods to think carefully about the long-term prospects of the sector.
Representing Quality Meat Scotland, the industry-funded body charged with developing quality assurance standards and promoting Scottish red meat, managing director Alasdair Muir shared some buoyant words of wisdom from north of the border. The group is working hard to create a consumer brand that distinguishes Scottish meat to create differentiation in a commodity marketplace.
Arguably, from the outset, Scotch beef had the advantage of a better reputation than English beef, but consumers are in constant need of reassurance, and the group is working hard to meet this need. It has developed a series of easy-to-identify “Scotch assured” logos that can be used by feed manufactures, farms, hauliers, auction marts and butchers, ensuring that the entire chain is branded. A somewhat raunchy advertising campaign aired recently, with the result that sales increased 15%. There is little to stop other regional groups using a similar strategy to increase awareness, or breeders of speciality meats, for example.
Performance must be measured – and the data used
How are we going to know that measures taken to improve the performance of the red meat industry are taking effect? Steve Ellwood, head of agriculture at HSBC Bank plc, said the Industry Forum has spent a lot of time looking at benchmarking, and found that it is currently the exception at all stages of the chain. Where benchmarking is already carried out, it is usually done so in-house and on an ad hoc basis. His team piloted a benchmarking strategy with companies throughout the chain, and received largely positive feedback.
While companies involved initially allowed the team in “as a favour” and had concerns over confidentiality, most gave positive feedback, saying the project had helped them agree and implement common objectives. Some even said they had asked their parent companies to undertake a group-wide benchmarking project, having seen the benefits in their own subsidiary. The Industry Forum is keen to roll out its benchmarking scheme and probe analysis on a larger scale, and has applied to the Department of Trade and Industry for further support.
Given the conservative nature of the UK red meat sector, the positive feedback and open-mindedness the Industry Forum reported is a clear sign of readiness to change. All links in the red meat supply chain are keen to take the action needed to meet consumer requirements and so secure a fair price for a job well done. Numerous difficulties remain, but the willingness to make tough decisions to overcome them is evident.
By Catherine Sleep, just-food.com managing editor
*Policy Commission on Food and Farming, led by Sir Donald Curry
Note: To see the Forum’s initial ten recommendations for red meat, click here.
