EXPORT OPPORTUNITIES FOR
IRISH ORGANIC BEEF
PRESENTED BY JOHN PURCELL
GOOD HERDSMEN LTD.
INTRODUCTION:
•Good Herdsmen established in 1989 by Josef Finke.
•Opened Ireland’s first independent organic meat processing factory in 2004.
•Good Herdsmen organically farm 780 acres in the Tipperary area.
•Winter feed on own farms plus B&B arrangements - 900 cattle per year.
•We supply to most of the Irish multiples their organic beef requirements.
•Established export markets in U.K., Sweden, Denmark and Germany.
•A.I.B.P. now a 50% shareholder in Good Herdsmen, John Purcell retaining
the other 50%.
•A.I.B.P will continue to source its own organic livestock for their own
existing customer base.
•Good Herdsmen will continue separately to supply its existing customers
and further develop our customer base, particularly in the export market.
WHO ARE THE MAIN PLAYERS IN IRISH ORGANIC MEAT
PRODUCTION?
•As the Irish organic market has continued to grow, increased
professionalism in processing and distribution has begun to develop.
•The majority of organic meat is now distributed in a similar manner to
conventional produce.
•The major organic beef processors that focus on exports are as follows;
- Good Herdsmen ltd
- A.I.B.P
- Slaney Meats (Leitrim Co-op)
•The above companies supply Tesco (Ire), M.S.V.C, Lidl, Superquinn,
Dunne’s Stores & Marks & Spencer's with their organic meat requirements.
These retailers represents 90% of the Irish grocery market.
MAIN PLAYERS CONT…..
• On the export front, ourselves and some of the other mentioned
companies supply Tesco U.K, ASDA UK, Marks & Spencers UK,
Wholefoods UK, wholesalers in Denmark, Holland, Germany, Italy,
France & Sweden.
• Irish Organic Beef is now well positioned in Europe through the hard
work of some of Irelands best meat companies. With the ongoing support
of Bord Bia we hope to expand these markets especially in France &
Germany.
• Ireland can also boast that there are several other excellent domestic farm
sales establishments set up, namely Omega Beef, Coolanowle Organics &
Drumeen Farm to mention a few.
CURRENT STATE OF THE MARKET
•It is well known that the European organic food sector has been having a
hard time since the recession hit sales in 2008/09. Meat sales dipped 17%
in this period.
•However there is strong evidence that all the major European retailers
are still stocking organic meat as consumers are still willing to pay a
premium for provenance and traceability.
•Organic meat sales have recovered and have actually increased their
market share from 2007/2008 figures. This is good news as it’s the first
“test” that organic food sales had to go through since the 1990’s. They
have held up well and proven yet again that organic is not a fad.
CURRENT STATE OF THE MARKET
• As more and more organic cull cows hit the European market and end
up retail packed particularly in UK, Holland, Germany & France. We
find consumers are not just content with the “safe food” labels. They
now also demand quality.
• Ireland can fill this gap as demand increases for better eating quality
coupled with traceability and organic certification.
• Good Herdsmen have recently introduced a premium beef product in
Germany. It’s selling at about 20% above locally produced cow beef
and sales are increasing weekly.
• A contract with a major organic food processor in Germany is just
about to be signed with Good Herdsmen. This contract will be for
150 tonnes of organic beef – This is equivalent to an extra 700 cattle
per year.
WHERE DO WE LOOK FOR NEW
OPPORTUNITIES
• Domestic market fairly well-saturated, running at approx .75% of
overall meat sales = European average 1%.
• Export market opportunities are huge, particularly in branded retail
skin packed beef.
• If Ireland continue to export organic primal beef – there are no
certainties for the future. Must brand and add value to our export
products.
• Organic meat processors must focus on branded organic meat
exports – to secure a future for Irish organic farmers.
• Organic meat processors don’t need to look any further than
mainland Europe to find secure markets.
• Good Herdsmen have already begun to develop this market with a 21
day self life branded organic retail meat product.
IDENTIFYING THESE MARKETS
(ORGANIC BEEF)
• No need to do extensive research – Bord Bia have already done the hard
work and analysis.
• Let’s follow the conventional meat sectors successful lead into European
markets.
• Over 462,000 tonnes of Irish conventional beef was sold onto European
markets in 2009 = 2.2m cattle.
• Approx 5,500 organic cattle were slaughtered in Ireland last year. 3,000 of
these were sold on the domestic market, the balance exported.
• If we aim to sell .5% of the conventional meat exported – we would need an
additional 8,500 cattle per year. I can’t see any reason why we cannot
process & distribute an additional 8,500 organic cattle per year on the
European market.
The Organic Beef Opportunity
•
According to D.A.F.F. 2009 statistics, there are currently approx 32,000 organic cattle in the
system. Leave out the diary cows, calves & replacements the balance should be the beef herd:
0-6 months 2,000
6-12 months 5,000 - 1/3 suitable for 2011 slaughter
6,600 cattle available
12-24 months 5,000 - Suitable for 2011 slaughter
for slaughter 2011
24-30 months 1,000
Total
13,000
•
Good Herdsmen see no issues marketing this amount of cattle in 2011.
•
With excellent prices currently being paid to suckler farmers for their young stock – Good Herdsmen
hopes it might encourage new farmers into this sector.
•
If we benchmark the .5% rule of continental export sales – Irish organic meat processors will need an
extra 8,500 cattle to fulfil this forecast.
•
In addition to the European market the emergence of a highly educated and financially stable upper and
middle classes in countries like India, China, Russia and Turkey, leave huge opportunities for our quality
Irish organic beef product.
Challenges / Concerns
• Ireland an export nation – need to have our organic beef priced the same or below
UK prices. Currently Irish organic beef is 8% more expensive than UK – Must
lower our cost base to stay competitive.
• Awaiting statistics from D.A.F.F. re. organic calf births in 2010. Suspect a drop of
20% from 2009. Worrying trend – pressure on prices.
• Organic brand under threat from – locally sourced – free from – free range, Fair
Trade etc. Need to come together as an organic community – one voice. Plans are
underway to create an Irish Organic Trade Board – I would recommend that we all
support it –we need a voice.
• Domestic organic herds are growing in France, Germany & Austria – This will
lessen demand in these countries for an imported product – We must establish our
brand “Organic Ireland” to ensure market share in the future.
• A better distribution of the organic kill is needed, too many cattle in Sept - Oct,
poor supply from Feb – June.
Initiatives
•
Good Herdsmen have finally put together a database of every organic beef farmers in the country, this will give us
better information to forward plan our marketing strategy.
•
Good Herdsmen have secured business in Europe for the difficult organic F.Q. cuts. Investing €100k purchasing
specialised processing equipment to produce this F.Q. product.
•
Huge investment currently underway – building additional wintering housing for 300 cattle – should take pressure
off during the winter months.
•
Continue to exhibit our range of products at Bio Fach Germany, Sial France and at upcoming largest platform for
meat showcase – Anuga Germany in October.
•
Recently opened Europes first dedicated organic cooked meat facility in Cahir. This will allow us to add more value
to our round cuts.
•
Good Herdsmen are investing in the
future for the Irish organic beef industry.
We offer European retailers & processors
the best quality product using the most up
to date modern packing solutions.
Irish Organic Beef is our future too
We believe your Organic Beef is in good hands