Page 8 - Australian Pork Newspaper

Trends to convert into opportunities to grow
OVER the course of the past month we have been looking at the mar- ket for meat internation- ally and in the longer term.
Clearly there are chal- lenges around the world in trade certainty and it seems likely the spread of African swine fever in Europe and Asia will have significant impacts on short-term trade and perhaps longer-term con- sumption.
However, there are also changes occurring both in the Australian meat market and how the pork industry approaches the market.
First, whilst the indus- try was oversupplied in 2017 and 2018, our mar- keting activity has been
Marketing Matters
targeting the people who buy most meat.
People aged over 35 years old buy 92 percent of meat volume, so that is where we have focused.
However, as we move out of the oversupply sit- uation, we need to move our targeting towards a younger demographic in order to make sure we have the consumers of the
future cooking and enjoy- ing Australian pork.
This is occurring in a number of ways includ- ing using the Taste rec- ipe website (taste.com. au), leveraging pork rec- ipes via the Australian Pork Limited Facebook and Instagram, as well as by providing share- able content to butchers, chefs and volume food-
service operators. Second, there is a grow-
ing proportion of con- sumers who for a variety of reasons want to limit their meat consumption.
These people do not think meat is a villain – often they really enjoy it – it’s just for some reason they think they eat a little too much of it.
This group appears to include three sub-groups. The first is a proactive group who have clear be- liefs about what is good for them as individuals and promote their life-
style choices to others. The second group is re- active and have had some type of life event that has affected their eating hab-
its.
For example, they may
have had a health scare and had their doctor rec- ommend eating more of one thing and less of an- other.
The third group wants to be able to say they are doing what either the proactives or reactives are doing, but are not really that interested in changing what they are eating.
The challenge with these consumers is they are limiting their meat consumption, have quite diverse motives to change their behaviour and are difficult to reach with marketing, as they tend not to consume a lot of media.
Third, the trend towards vegetable-based proteins (the Beyond Burger and
so on) seems to have sig- nificant implications.
Not only can we see around the world that there are significant and growing ranges of products but many of the companies operating in this area are funded by people who are prepared to fund losses for long periods and operate to timeframes that are much shorter than agricultural industries have historic- ally operated at.
Finally, despite these changes, it appears meat
consumption will contin- ue to grow globally.
This is being driven as the desire for meat grows, particularly by people in South-East Asia, which presents a significant op- portunity for Australian product.
Clearly all these chang- es offer both opportuni- ties and threats, and we as an industry will need to find ways to benefit as we move towards re- writing the industry strat- egy for 2020-2025 in the coming year or so.
by PETER HAYDON General Manager Marketing
China’s COFCO
Meat reports loss
as swine fever
hits pig prices
CHINA’S COFCO Meat Holdings Ltd has posted a loss of about $US90 million for 2018 after slump- ing hog prices hit its pig farming business.
Speaking to Reu- ters, the company, a subsidiary of Chinese state-owned grains-to- property conglomerate COFCO that produces pigs for sale as well as churning out its own meat, said the nation’s hog supplies would likely be tight in 2019 and 2020 in the wake of the disease.
Tighter supply would likely boost pig prices. The firm said it saw a net loss of $US93.58 million for 2018, down from a profit of $US67
million the year before. China has recorded 114 outbreaks of high- ly contagious African swine fever since the disease was first de- tected last August, though many in the industry believe it is worse than officially
reported.
Restrictions on trans-
porting pigs from re- gion to region meant some areas initially had an oversupply of the animals, which in turn dragged on nationwide hog and pork prices.
But widespread cull- ing means supply has been tightening this year.
COFCO Meat said it planned to expand hog production while upgrading biosecurity measures to combat swine fever, adding that larger companies were better placed to take such steps.
The firm slaughtered 2.55 million pigs in 2018, up 14.5 percent from the previous year, partly offsetting the impact from low hog prices.
It will also speed up construction of slaughtering facilities in northern China and promote branded pork.
“Despite low pig prices in 2018, high- end pork prices re- mained strong,” the company said in a stock exchange filing.
Meanwhile, the firm said its “pork imports division and fresh pork department will co- ordinate and grab op- portunities brought by African swine fever”.
The firm’s revenue for 2018 was about $US1.068 billion, up 3 percent from $US1.037 billion in 2017, largely thanks to its growing beef import business.
COFCO Meat sold 38,000 tonnes of im- ported beef in 2018, up 81.7 percent from the year before, amid surging demand for foods such as steak and hamburgers.
Page 8 – Australian Pork Newspaper, April 2019
www.porknews.com.au