1 Prof Hettie Schönfeldt School of Natural and Agricultural Sciences.

1

Prof Hettie SchönfeldtSchool of Natural and Agricultural

Sciences

2

Current Issues

1. Little & declining knowledge of the positive role of red meat in nutrition and health

2. Environmental impact of the industry

3. Convenience, indulgence, traditional product

4. Value for money

Identified problems:– Lack of education & communication along the red meat

chain– Negative influence of media (nutrition, health &

environment) Brussels, 2009

3

Current Issues

Increased globalization of the red meat industry

&

New food trends are observed

Provides a challenge to red meat industry:1. Increased possibility of international collaboration &

alignment 2. Encourages change in all sectors – “from farm to plate”3. Opportunity to increase consumer knowledge and thus

consumption

Brussels, 2009

4

1. Increased possibility of international collaboration & alignment

● Globalization gained importance due to market liberalization & technology

● Severe consequences for market structures & strategies– From agriculture & food processing to food retail & service– Increased market concentration & density

> worldwide consumer preference – increase in large food companies> regional differentiation – increase in specialist products

● Meat consumption continually increasing– Increased impact on import / export + production

● The global system emphasizes:– Grain-fed cattle in feedlots– Special breeds that can graze more marginal & fragile habitats– Use of growth hormones and antibiotics– Environmental and social impact– Government subsidies & policy – International alignment in standards & policy

5

World Meat Production

0

20

40

60

80

100

120

Beef Ovine Pork Poultry

Mil

lio

n M

etri

c T

on

s (C

WE

)

19701980199020002010

Source: FAO

6

Major Meat Producers 2002

USAAust/NZChinaBrazilEUOther

USAEUChinaOther

USABrazilEUChinaOther

Aust/NZChinaOther AsiaEUAfricaOther

Beef

OvinePoultry

Pork

Source: USDA

7

World Meat Trade

Source: FAO

0

2

4

6

8

10

12

Beef Ovine Pork Poultry

Mil

lio

n M

etri

c T

on

s

19701980199020002010

8

The Impact of Trade Liberalization

(1,000 MT)

China PNTR (00)

Tokyo Round (78)

Japan Beef-Citrus Agreement (88)

Canadian Free Trade Agreement (89)

Korea Beef Agreement (93)

North American Free Trade Agreement (94)

Uruguay Round (95)

Japan SPS Agreement (84)

U.S. Beef Exports 1970-2000

9

World Trade in Meat as a Percent of Production

Source: FAO

0%

2%

4%

6%

8%

10%

12%

14%

Beef Ovine Pork Poultry

Per

cen

t o

f P

rod

uct

ion

Ex

po

rted

1970198019902000

10

Summary: Increased possibility of international collaboration & alignment

●The world market for meat products is growing

●Exporters have cooperated in opening markets for half a century

●Producers, exporters, importers and other role players should continue to cooperate in non-traditional ways to “raise all ships”

US Meat Export Federation

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2. Encouraged change in all sectors – “from farm to plate”

Consumers of today:

• Curious: searching authentic experiences more than products

• Realists: (very) careful to the quality/price relation of the acquired product/service

• Social: interested in relationships and situations that create “community”

• And then,…… informed (very),…… autonomous (they feel like deciding),…….. ethical….

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The South African consumer

●Population of 46 million people of which 79% are black Africans

●Classified according to LSM (Living standards measure) groups:– A marketing research tool to gain better understanding

of the socio-economic status of individual / group– SA is segmented into 10 LSM groups (10 being the

highest standard and 1 the lowest)– People are segmented according to their standard of

living>E.g. degree of urbanization, ownership of cars and major

appliances etc as variables

13

14

The South African consumer market:LSM classification

(Source: SAARF, 2004)

010002000300040005000LS

M 1

LSM

2

LSM

3

LSM

4

LSM

5

LSM

6

LSM

7

LSM

8

LSM

9

LSM

10

Popu

latio

n ('0

00)

35 % of LSM 6 to 10 are black35 % of LSM 6 to 10 are black

15

0.0

5.0

10.0

15.0

20.0

1 2 3 4 5 6 7 8 9 10

SU-LSM group

% o

f S

A p

opula

tion

0

5

10

15

20

Avera

ge m

onth

ly in

com

e

(R'0

00)

% of SA population Average monthly income (R'000)

The SU-LSM segments: Proportion of SA population and average monthly income

(SAARF, 2005)

1616

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

LSM 1-3 LSM 4-5 LSM 6-8 LSM 9-10

%

2001

2002

2003

2004

2005

2006

2007

2008

- 45%

+14%+ 40%

+36%

Dynamics in the SA consumer market

- 45%

(-29%)+ 14%

(+ 6%)

+ 40%

(+ 26%)

+ 36%

(+ 28%)

Comparing 2001 to 2008Comparing 2001 to 2007Vermeulen,

2005

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20011995 1998

Household growth exceeds population growth

Year

+16% growth in population

8,3198,3198,47

8

8,478

9,5519,55110,143

Source: SAARF AMPS

10,50010,500

2005

26% IncreaseHouseholdNumbers

(2.18m HH)

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Meat consumption patterns

●Meat is a favourite and popular food in the diet

●However, the popularity of red meat is globally declining in favour of white meat and other non‑meat proteins

●SA Consumption (per capita)Red meat decreased and white meat increased

(Abstract of Agricultural Statistics, 2008)

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Meat consumption patterns

●Price difference contributes to this phenomenon

●Perceived health risk associated with the consumption of products considered to be high in total and saturated fat

●Detrimental effects on health such as increasing cholesterol levels and increasing health risk

●Concern about the link between high saturated animal fat intake and CVD as well as certain types of cancers

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Global consumption of meat (developed vs. developing countries) (Valin, 2000)

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Estimated total annual cash expenditure on major meat products per household per LSM group (2005)

0.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

LSM1 LSM2 LSM3 LSM4 LSM5 LSM6 LSM7 LSM8 LSM9 LSM10

%

%

Beef Mutton/Lamb Pork PoultryVermeulen, 2005

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In South AfricaDecrease in the

consumption of animal fats

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The South African red meat consumer

Changes over time–Increasing living standards–Increase in household numbers, but decrease in people per household

–Increased prevalence of food trends>General trend towards white meat>Decreased intake of animal fats

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People buy meal solutions, not parts of dead animals

Reasons for food/meal choice:● “it’s a family favourite” } Indulgence

● “a treat/indulgence”

● “it’s good for you” } Health

● “I’m on a diet”

● “It’s quick to prepare/no hassle” } Convenience

● “easy to wash up”

● “Environmentally friendly” } Going green

● “Natural”

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International consumer food trends

These trends overlap:

Health

Convenience Ethics / environment

Indulgence /pleasure

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Consumer food trends

Trend 1: Health

Reflected in…• Natural• Functional promises (natural & ‘plus’ claims)• ‘Minus’ claims

Prominent dimensions:• General wellbeing• Dieting• Bioavailability • Specific health issues• Supplements

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Trend 2: Convenience

•Time-pressed consumers•Usually combined with health and/or indulgence

Reflected in …• Product innovation• Packaging innovation• Distribution innovation

Prominent dimensions:• Ready-meals• Fragmented eating • Children nutrition

Consumer food trends

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Trend 3: Indulgence

•Excitement, diversity, sophistication

Prominent dimensions:

• Product presentation• Taste, flavour• Culture foods• Ethnic foods

Reflected in …• Product & packaging• Labeling• Novel ingredients –wild and underutilized foods• Novel combinations• Texture• ‘Culture’ foods

Consumer food trends

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Trend 4: Going ‘green’

• Environmental sustainability• Social sustainability• Less important globally• For example:

OrganicFree rangeFair tradeFood miles Carbon footprintBiodiversity

Reflected in …• Local• Seasonal• Traditional• Credence values

Consumer food trends

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3

13

17

63

67

73

7

4

15

59

67

63

0 10 20 30 40 50 60 70

Environment

Culture

Fun / children

Health

Convenience

Indulgence

Share (%) of new food products reflecting specific trends (n=30/annum)

2007

2008

South African consumer trends(A new product perspective)

Global trends reflected in the local food market:

Vermeulen, 2005

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Encouraged change in all sectors – “from farm to plate”

Food Trends

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2. Encouraged change in all sectors - HEALTHHEALTH

●Image of meat as good for you (UK):

0

20

40

60

80

IMAGE - Good for youSampled on Main

Rolling 52 weekly data

j1792 x01l 112002 2003 2004 2005 2006 2007 2008 2009

PorkLamb

Beef

Chicken

33

Image of red meat (UK): Too fatty

0

20

40

60

80

IMAGE - Are too fattySampled on Main

Rolling 52 weekly data

j1792 x01l 152002 2003 2004 2005 2006 2007 2008 2009

Bacon

Red meat

Pork

Lamb

Beef

Chicken

34

Image of red meat (UK): Important as part of a healthy diet

0

20

40

60

80

100

IMAGE - Important in a healthy dietSampled on Main

Rolling 52 weekly data

j1792 x01l 162002 2003 2004 2005 2006 2007 2008 2009

Bacon

Red meat

PorkLamb

Beef

Chicken

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The image of red meat as “a healthy choice”

● Inline with food trend: HEALTH, need to change image of red meat as a “healthy choice as part of a balanced diet”

● In terms of the South Africa population:– Obesity:

>56.2% of the adult population overweight or obese (Demographic and Health Survey, 2003)

– Undernutrition>30.9 % preschool children stunted (Short for their age)

>50 % of children consume ≤ half the RDA for vit A, vit B2, B3, B6, folic acid, calcium, iron & zinc (NFCS, 1999)

>Poor Vit A status: 75% children & 25% women>Poor iron status: 16% children & 20% women> Inadequate zinc status: 45% of children

(NFCS, 2005)

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In terms of undernutrition: Red meat is a nutrient dense food

●Meat is an excellent source of protein containing all the essential amino acids

●Good source of many vitamins & mineralse.g. iron, zinc and the B-vitamins

●In leaner meat the nutrient content is higher, as fat dilutes the nutrients in the protein matrix

●With the high prevalence of nutritional deficiencies, the higher percentage of nutrients in lean red meat, increases the positive health image due to consumption

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Global decreases in fat content of meats observed over time

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Implication of reduction in fat content of red meat

The Heart Foundation and Cancer Foundation states that the fat content of food products consumed should be less than 10%

The implication: Many meats, according to

recent composition data, in fact lies within the recommended fat range

Due to breeding, slaughtering and preparation changes

SA lamb

SA beef – need for new data

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Encouraged change in all sectors - CONVENIENCECONVENIENCE

●Meat species is rarely the main driver of purchase (UK)

Which meat am I going to

buy?

What is the meal occasion?

(what’s my budget / how much time do I have)

Which cut?Which cut?

Which species?

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BETTER

GOOD

BEST

Basics

Had something done

Product is ‘Enhanced’

E.g. Boneless

E.g. Bone in Products

E.g. Marinated, Basted, Crusted, Extra Trim

ConvenienceConvenienceCurrent

SA industry

International +

encourages change in SA

41

Vacuum SkinPackagingVacuum SkinPackaging

CAP-MAPPackagingCAP-MAPPackaging

Half or Full SleevePackagingHalf or Full SleevePackaging

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Encouraged change in all sectors - INDULGENCEINDULGENCE

Increased consumer trend towards:

●Sense of simplicity– Back-to-basics is becoming an indulgence– Natural ingredients– Clean label foods– More natural ingredients– Continue to cook at home

●Authenticity & region specific– Not just enough to regionally position, but also based

on ingredients from that region

●Increased trend for new and exotic flavors

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● Hand Made

● Raw added value

● Stuffed & or Marinades

● Extra Matured

Indulgence Indulgence

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Extra Tender lamb

Exclusive to Superquinn

The cuts undergo a revolutionary method of maturing which achieves an increased level of tenderness and flavour…………for those seeking that little bit more – extra tender, extra taste, extra special.

Evaluation carried out and concluded that day 10 optimum in terms of tenderness without adversely affecting product quality

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Encouraged change in all sectors - GOING GREENGOING GREEN

People are increasingly becoming nostalgic about simpler times & remain environmentally conscious

●Sustainable gather-systems– Locally sourced– More sustainable– Fairly traded– Carbon footprints

●“Free from”

●Naturally produced

●Hormone free – linked to health trend

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●Consumers are confused about who and what to believe regarding food choices IFIC Foundation, 2004

●Media – mixed messages

●General belief among consumers that: ●Red meat contributes towards obesity and other

lifestyle diseases●Red meats are hard to prepare & inconvenient●The red meat industry is not environmentally friendly

3. Opportunity to increase consumer 3. Opportunity to increase consumer knowledge and thus consumption knowledge and thus consumption

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I turned Vegan May 7, 2007! It wasn't difficult to give up animal products. Yes ~ that's all meat, milk, eggs, cheese, yogurt, ice cream, soup broths, etc.

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Increased need for industry involvement

Industry involvement:

●Decrease in fat percentage of red meat over time

●Limited change in terms of convenience, indulgence and “going green”

●Need for more directed marketing

49

50

To Have a Product

51

To Have a Story to tell

52

To have a proper communication strategy

53

Reach consumers in a way that is meaningful

to them

54

Marketing of red meatIncreasing Consumer Preference

>Through successful communication strategies

>Increase perception of red meat in line with the main food trends HealthConvenience Indulgence “Going green” (naturally produced / hormone free etc.)

>Working with others in the supply chain to maintain and grow consumer demand

55

Example: Presentation& PackagingExample: Presentation& Packaging

•Meets Legal Requirements•Attractive•Hygienic •Low Cost •Re Cycle•Simple & easy to Shop

Health

Going green

Indulgence

Convenience

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Photo Illustration

Product Name

GDA’s

Country of Origin

Freezable

Cooking Time

Retailer Branding

‘Only Contains’ Statement

Pack Price & Packers code

Staff StorageInstruction

Customer StorageInstruction

Customer Use byInstruction

E.G LabellingE.G LabellingHealthHealth

IndulgenceIndulgence

ConvenienceConvenience

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Challenges for the future

1. Sustaining production + supply – improving efficiency Need for international collaboration for R&D

2. Red meat production, the environment & climate change

3. Consumer Expectations Leaner & more healthy meat Need to focus on new customers and marketing segments (younger

generation & Muslim society)

4. Innovation is essential Need to capitalise on trends

Boneless products Products which fit convenience trends Moving away from traditional cuts to easy to prepare cuts with more enjoyment

and health

Need for education

Brussels, 2009

58

1. Science

2. Opinion leaders

4. Health professionals

5. Consumers

Scie

nce

Driv

enBehaviour change

3. Industry

59

Recommendations● Create a positive environment for international and local co-

operation

● Confront environmental issues – Research, development, changes & communication

● Highlight advantages of red meat consumption– Nutrition and health– Human satisfaction– Part of a modern, pleasant, convenient and mixed diet

● Differentiate, create and add value for growth in market

● Move to younger generation target market

● Reinvigorate domestic market – Rise in retail standards– R&D and communication of the findings – Specialized generic consumer marketing for behavior change

60

Thank you

Prof Hettie Schönfeldt

[email protected]