Quality products in the European poultry market

Pascale Magdelaine

Vilnius, 3/10/ 2006

International and European background

US

18.7 MillionsT18.7 MillionsT

(+3% in 2005)(+3% in 2005)

UE 25

11 MillionsT 11 MillionsT (+0.5% in 2005)(+0.5% in 2005)

BRAZIL

8.6 MillionsT8.6 MillionsT

( +9% in 2005)( +9% in 2005)

Thaïland

1 MillionT 1 MillionT

(-35 % in 2004, (-35 % in 2004,

+ 5% in 2005)+ 5% in 2005)

Russian Federation

1.3 MillionT 1.3 MillionT

(+ 8% in 2005)(+ 8% in 2005)

World poultry production 80 MillionsTonnes in 2005

(+ 3 %/ year since 2000)

CHINA

13,4 MillionsT 13,4 MillionsT

( +1.5% in 2005)( +1.5% in 2005)

Source OFIVAL/ FAO/UE

Changes in world poultry trade

0

500

1000

1500

2000

2500

3000

3500

93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05

Exportations 1000T

BRAZIL

EU

US

CHINA

THAILAND

International trade 7.5 MillionT

Source OFIVAL

World poultry trade 2005/2006 New record for the brazilian poultry exports in 2005 Some difficulties in 2006: brazilian exports dropped about 12%

(7 months 06/05)– Whole chicken towards middle east (-33.5%)

– Cuts -8% ;

– + 50% for processed products

– Very low prices on the domestic brazilian market

Increase in US exports in 2005, stable in volume in 2006 but prices drop

Thailand : – Stop of the exports of raw poultry meat (390 MT en 2003)

– Strong increase for elaborated cooked products (100 MT in 2002, 236 MT in 2005, 350 MT expected in 2006)

Source : ITAVI from EU Commission and national statistics

EU 25 : 11MT produced in 2005 + 6%/2000

1000 T

-100

400

900

1400

1900

2400

FR UK ES DE IT NL UEBL PT DK 10 NEM Others

2000

2005

-800

-600

-400

-200

0

200

400

600

800

1 000

1 200

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

'000 T

in P

roduct

weig

ht

import Export Surplus

Extra EU poultry trade (1000 T)Export 05 - 4%

Import 05 +25%Source Commission

0

200

400

600

800

1000

1200

1400

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

TOTAL AVEC RESTITUTIONS

WTO agreement (Marrakech) impact

91%19%

Part of exports with refunds

Source Commission

Tonnes

Extra EU poultry trade (value)1000 €

Source Commission

-2500

-2000

-1500

-1000

-500

0

500

1000

1500

1990 1992 1994 1996 1998 2000 2002 2004

-1400

-1200

-1000

-800

-600

-400

-200

0

200

400

Exports Imports Commercial balance

European poultry consumption and domestic markets

N°1

N°2

N°3

Poultry rank

L’Agence française pour le développement international des entreprises février 2004

52%

17%

20%

21%

23%

24%

26%

35%

Poultry meat second in the European meat consumption

39% 35%

% of total meat

consumption

18%

18%

20%

35%

28%

European poultry consumption

3

3.5

4

4.5

5

5.5

6

6.5

7

7.5

8

5 10 15 20 25 30 35 40

consumption per person

Ln

(co

nso

to

tale

)

Norway

Switzerland

Sweden

Finland

Belgium

Austria

Danemark

Eire

Germany

ItalyPoland

Netherlands

Czech Rep.

Hungary

Slovenia

Portugal

Spain

United Kingdom

France

Lithuania

EU 15 EU 25

Domestic markets > 750 000 T

High individual consumption

level

Changes in consumption habits

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35

Belgium

United Kingdom

Germany

France

Food catering

Processing industry

%

New trends in European poultry market

More fresh products, even in the north European countries, where the frozen products are loosing weight (UK, Germany, Belgium).

More processed products :

0% 20% 40% 60% 80% 100%

Germany

UK

Italy

Netherlands

Belgium

France

Spain

Whole

Cuts

Processed products

More quality products

Increasing of specifications and collective approach to guarantee some qualitative caracteristics (sanitary quality, animal welfare, feed quality, rearing conditions, …)

Between 15 and 25 % of the chicken European under quality specifications

Various approach according to the countries– Label Rouge in France– Organic poultry – Free range in UK– “pollo corral” in Spain– Global approach in Netherlands (IKB) or Germany (QS)

French poultry market : various species and various quality

levels

French Context :26% of French chicken production benefit from an

official sign of quality (33% if excluding production for extra EU export)

Standard73%

Label Rouge17%

Certified8%

Others1%

Organic1%

ITAVI from SCEES

Cooked chicken

5%

Guineafowl4%

Duck8%

Prepared products

16%

Turkey22%

Whole chicken22%

Chicken cuts23%

The French market Various species…

Total chicken 50%

ITAVI from TNS SOFRES 2005

Cuts 80% Cuts 9%

Cuts 95%

…. and quality levels

Whole Label Rouge21%

Whole Certified4%

Whole others13%

Label Rouge cuts5%

Certified cuts6%

Others cuts28%

Processed products

23%

French Chicken Market

ITAVI from TNS SOFRES

Global French poultry market stableStrong increase for processed products

ITAVI from TNS SOFRES

Purchases in volume 2005/2003 % per year

-6 -4 -2 0 2 4 6 8

Prepared products

Duck

Turkey

Whole chicken

Chicken cuts

Total poultry meat and prepared products

French consumers demands according to different types of poultry products

Whole chicken Cuts Processed/ cooked products

Convenience - + ++

Price +/- ++ +

Sanitary quality and origin

++ + -

Taste ++(linked to the

rearing practices)

- +(recipe)

In conclusion, actual trends in European consumers demands

Sanitary security Convenience products More fresh products Good rearing conditions (animal health and welfare,

feed quality, ..) Guarantee on origin and traceability Good taste … and correct prices.

Thank for your attention