Danish Crown: Sales of organic meat are under pressure
Rising costs for, among other things, energy have hit consumers hard, and this has largely affected the sale of organic meat. Friland, which is Danish Crown's organic sales company, clearly notices this. In the first six months of the financial year 2022/23, turnover in Friland has fallen by 13 percent from 549 million DKK in 2021/22 to now DKK 478 million.
’’It is always unsatisfactory to lose ground, but taking the market into account we had actually feared an even worse development. Through a targeted effort, we have managed our way through, so that despite the challenges, ecology is as strong as possible,‘‘ says director of Friland, Claus Hein.
The trend can also be seen in the total sales of organic meat in Denmark in 2022, where figures from Statistics Denmark show that sales of organic beef, pork and chicken fell by 26, 27 and 20 percent respectively, compared to the previous year. The development has not changed in the first three months of 2023, and it is not a sustainable situation in the long run.
‘‘If we are to maintain a wide selection of organic products from Friland in most supermarkets, then we need the Danish consumers to support ecology. It is absolutely crucial that we get sales up, so that it becomes financially sustainable to have organic animal husbandry in Denmark again. Because we are approaching a point where many of our producers will choose whether they want to continue their organic production,‘‘ says Claus Hein.
Friland's average payment to the organic suppliers of pigs has fallen by three kroner from DKK 25.76 to DKK 22.40 per kilo in the first half of the financial year 2022/23 compared to the same period in 2021/22. This is a decrease of 13 percent. In the same period, the total average payment to the suppliers of organic beef has increased slightly from DKK 29.56 per kilo to DKK 30.39 per kilo due to a low supply of beef in Europe. Finally, the suppliers of conventional free-range pigs in the first half of 2022/23 have been settled DKK 15.12 per kilo compared to DKK 12.30 per kilo in the first six months of 2021/22, but despite the increase, the economy is also challenged for this group by producers.
‘‘It is the ambition that the settlement, which reflects the market, must be able to ensure that the farmer can make a living by producing for our concepts, but this has not been the case for more than a year now for the cooperative owners who supply pigs, because they have had very high costs for special feed and energy,‘‘ says Claus Hein.
Danish Crown, which owns Friland, continues to believe that ecology has its justification with the Danish consumer. But a continued development of the organic sector in Denmark requires, according to Group CEO of Danish Crown, Jais Valeur, that the Danes will support Friland's products, so that the production of organic pork and beef in Denmark can be maintained.
‘‘At Danish Crown, we believe in ecology, and we see Friland as one of the group's flagships. This is also the reason why, through Friland, we invest in branding and positioning ecology. In the long run, however, we are dependent on consumers choosing organic in the fridge if there is to continue to be a preponderance of Danish products on the market,‘‘ says Jais Valeur, Group CEO of Danish Crown.
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