Price rules again

The meat industry trade media (afz - allgemeine fleischer zeitung and FLEISCHWIRTSCHAFT) of the dfv Mediengruppe, in cooperation with the management consultancy Ebner Stolz, surveyed companies from the top 100 in the meat and sausage industry. Exactly 47% of them have more than 1,500 employees and generate sales of more than € 500 million, while 53% of the companies surveyed are smaller and generate less sales. "The meat and sausage industry is an important economic sector in Germany, but its importance should be given greater visibility. That's why we jointly launched Branchenecho, to raise the profile of the industry, document its development and showcase performance," says Christian Schnücke, overall publishing director of agricultural, baking and meat media at dfv Mediengruppe. An international competitive situation in flux, increasingly uncertain political conditions and changing consumer behavior - these are the issues currently confronting the meat sector. 84% of entrepreneurs expect demand for meat and sausage to decline further in view of price increases. The majority anticipate a drop of between five and ten percent, with one in five even expecting a drop of more than ten percent. In contrast, it was mainly the smaller companies that were able to increase sales volumes in recent years. Overall, 37% of respondents report an increase in volumes compared to 2019. 42% are satisfied with their business development. "The winners of the last two years are the medium-sized companies, while the losers of the market development are mainly the large companies with concentrated locations," says Klaus-Martin Fischer, partner at Ebner Stolz. "The formerly leading companies in the industry are now suffering from volume shrinkage. Where they previously had the major competitive advantages in cost efficiency, companies with highly concentrated sites are now experiencing significant competitive disadvantages." 58% of respondents say they are not satisfied with economic performance, and 42%report a decline in volume. "One reason for the decline in volume is due to the few companies in the industry that were heavily focused on exports," says Fischer, describing the cause. "Thus, 32% of respondents also say that international competition is the biggest challenge." The respondents consider regionality (84%) to be the strongest future trend. At 68%, the demand from higher animal husbandry methodslands in third place behind that for inexpensive products (79%). Against the backdrop of the Ukraine war and increased inflation, however, this could prove to be a short-term effect. In the long term, a boost is expected above all for sustainable packaging and products with an increased degree of convenience. In general, the study authors see regional value chains on the rise. Two-thirds of the companies are currently looking for alliances: 52% are open to vertical integration, 16% to horizontal integration. As far as transformation toward future viability is concerned, 58% of the companies surveyed believe the industry is still at the beginning of the process, while 37% are already in the midst of change. Consolidation will continue to increase, the management consultants estimate, and anticipate increasing cutthroat competition for slaughter hooks and sausage lines. The industry sees the massive expansion of automation (94%) as the most important challenge, as staff shortages and rising personnel costs are one of the biggest problems for 63%. In the future, the industry panel will be conducted every six months and provide reliable information on the status quo.