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"Will the world be the same as we know it?"

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Retailers, meat processors and the foodservice sector to reshape after the covid-19 global pandemic.

Posted on Mar 23 ,12:19

"Will the world be the same as we know it?"

The global meat industry will have to face a new reality after the coronavirus pandemic. The markets will reshape to new habits of consumption, which will test the producers' ability to adapt. China, as an example, has moved to online deliveries fast, to respond to the consumer's need for protection in front of coronavirus outbreak.
Premium products delivered by processors in the foodservice area are already hit by the restrictionary measures imposed in some markets affected by the outbreak. Almost 150 countries around the globe have experienced the hardness brought by these "pandemic times". Many of them have imposed drastic measures to limit the spread of the virus and some sale channels have been closed. At the end of 2019, prior to covid-19 situation in China, Nan-Dirk Mulder, Rabobank’s expert for the animal protein sector has presented his forecast for poultry in the EU. According to him, the segment of premium products was about to grow in the EU market, with a higher ratio of growth in the emerging economies (see the map).

concept-market-in-europe

 

However, once the covid-19 pandemic has reached Europe that forecast has changed dramatically.
"We are talking about fast changes in consumers' habits of buying. Everything is directed to retail in most of countries. We are working on scenarios following the examples sen in the Italian and Spanish markets but we don't have a time horizon to predict when and how this is going to impact the food industry. Yes, currently we witness an increase in sales for big retailers in food due to the closure of foodservice. It's difficult to say, though, how the trend is going to impact our businesses. Sometimes I wonder if the world will be the same as we know it", says George Badescu, the head of Romanian retailers association, AMRCR.
There are solutions in the delivery sector that can mitigate some of the impacts for producers but a shock is to be felt, however. Some of the producers have already announced that they are focusing on production to respond to increased demand from their domestic markets and the postponing of new product launches in a turbulent market.

The new revised outlook from Rabobank talks about disrupted markets and medium to heavy impacts for retailers and producers as well. “In terms of markets, we expect more at-home poultry consumption and higher sales of non-perishable poultry products. Labor availability and logistics issues, such as those impacting distribution, will likely affect supply in the coming months. Coronavirus will also affect the global supply of poultry inputs (like feed additives and animal health products), due to disruptions at Chinese and other suppliers,” according to Nan-Dirk Mulder, Senior Global Specialist – Animal Protein.

The changing economic and market conditions brought by the coronavirus pandemic will have significant impacts on the global animal protein market in 2020. Global trade will face more volatility this year, with both destinations and origins affected, as well as pricing. Total volumes are likely to be affected temporarily, and trade should ultimately benefit from local supply issues related to coronavirus, ASF, and avian influenza (AI). The biggest coronavirus-related issues will be potential shocks in supply and demand driven by quarantine and logistics issues and temporary changes in consumer demand towards at-home consumption, non-perishable products, etc. As this could impact supply and demand, it has the potential to also impact global poultry markets and pricing.

Some of these changes are seen by butchers, who are forced to adapt to a new market reality. "Is time to to a stormy market. We are a slaughterhouse/grocery and a lot of our customers are in the foodservice. That turnover is 0 at the moment.
The turnover to our retail customers is very good, but prices are changing every day and some, like trimmings, more times a day and premium beef cuts are changing into inferior beef cuts. We are forced to look for a new type of consumer and to respond to his demands", stated Reijer Evers, owner and founder of VSSMeat, a butchershop company from Elspeet, the Netherlands, in an interview for EuroMeat News.

The EU has an average consumption of meat (82.6 kilos cwe) -see photos bellow- double from the rest of the globe (on average).

tabel

 

tabel 2

 

That is probably to change as the people are forced to live inside their houses due to lockdown restrictions. So, the real question is "what is to remain of that after the pandemic situation will pass?" Will our world will be the same? 

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