Consumers are choosing Friland again
When the wave of inflation rolled across Europe, many opted out of organic and other premium products. Now the private economy is increasing again, and this can be felt in Friland, which is Danish Crown's sales company for organic and meat from wild animals.
In the financial year 2023/24, revenue has increased five percent from DKK 919 to DKK 965 million, but at the same time fewer organic pigs and organic cattle were slaughtered than last year, so in reality this is an increase in turnover of 13 percent. In other words, this means that Friland will now largely no longer have to dispose of organic meat in the conventional market.
"It is fantastic to experience how consumers choose us again when they stand at the refrigerated counter. In just a few months, we have gone from fighting hard to sell as much as possible every week, to now having sold out several weeks ahead, so it has really been a year in which we have taken a big step in the right direction", says Søren Tinggaard, who is CEO of Friland.
In Denmark, four percent more organic pork was sold, even though eight percent fewer pigs were slaughtered. The sale of organic beef is largely unchanged, but here the supply of animals has decreased by as much as 12 percent. In addition, six percent more meat from free-range pigs has been sold, where there has been a growth in slaughtering of two percent.
At the same time, there has been an increase in the export of organic pork to Friland's customers across Europe, and Friland's German sales company has raised its earnings considerably.
"We continue to believe in an upward trend and thus rising prices, because right now we see a very weak appetite for expansion among the organic producers in Europe. At the same time, it is our assessment that we have strengthened our position in the market. We chose to stick to our range and prioritize serving our customers during the period when consumers showed restraint, and customers remember that now", says Søren Tinggaard.
For most of Friland's suppliers, the average settlement has increased compared to the previous year. For suppliers of organic pigs, the settlement has risen from DKK 23.69/kg to DKK 24.74, and for suppliers of free-range pigs there has been a rise from DKK 17.46/kg to DKK 17.55/kg for approved kilos. On the other hand, the suppliers of organic livestock have experienced a smaller drop from DKK 31.73/kg to DKK 31.65/kg.
Right now, Friland is working on expanding the customer base and getting even closer to the key customers based on a clearly defined goal of securing a settlement that both gives the suppliers a reasonable income and the opportunity to develop their organic production.
"It is important for me to emphasize that we continue to work on increasing the overall settlement. Because we fully agree that organic producers in particular need a period of stable earnings. In that context, a stronger Danish Crown, of which we are a part, will also improve our ability to increase payment to suppliers", says Søren Tinggaard.
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