Danish Crown: Ecology shows signs of progress
European consumers have once again acquired a taste for spending money on good animal welfare and organic meat. In the first six months of the financial year, Friland's revenue rises one percent to DKK 484 million. And if the turnover is adjusted for the decrease Friland has had in the supply of animals for slaughter, the company's turnover has actually increased by 10 per cent.
"We have succeeded in reversing the trend as inflation has fallen. We have increased our sales of organic products in both Denmark and on several of our export markets, so I would describe our result as okay, because we have been able to raise both the prices and our utilization rate", says CEO of Friland, Søren Tinggaard.
Friland's organic suppliers in particular have been challenged by several difficult years with very high production costs. It has also affected the deliveries of animals that the organic producers have sent to Friland. This means that Friland has received 13 percent fewer kilos of organic pig. The delivery of organic livestock falls by five percent in kilos, while in the first six months of the financial year, 10 percent more kilos have been delivered to the Friland concept.
"We are still challenged by the fact that several suppliers have stepped on the brakes and reduced production. The costs for feed in particular have been high in the past two years, and the prices we have been able to bring home from the markets where consumers have been affected by inflation, have not been quite high enough to create positive results with all suppliers. Therefore, we must raise earnings further, so that we can ensure that supplying animals to Friland is a sustainable business", says Søren Tinggaard.
In 2023, organic foods and especially organic meat were affected by declining demand from Danish consumers. In 2023, sales of organic meat in Denmark fell by 14 percent, according to figures from Statistics Denmark. However, that development seems to be on the way to correcting itself. Measured in terms of turnover, Friland's sales of organic pig and Friland pig to the Danish retail chains have increased by five percent compared to the same period in 2022/23.
"Demand for our concepts has been good and continues to increase in Northern Europe. We can see that consumers are coming back, but there is still a long way to go before ecology is back to the level we saw just three years ago", says Søren Tinggaard.
The Group CEO of Danish Crown, Jais Valeur, is satisfied that the development in Friland is once again moving forward.
"I am delighted that Danish consumers are again choosing products from Friland after a few difficult years. Our belief in ecology has not changed, and we fight together with our shareholders to give more impetus to the development of the market", says Jais Valeur.
The average settlement has increased from DKK 22.40 per kg to DKK 23.52 per kg for organic pigs in the first six months of the financial year compared to the same period last year. For organic cattle, the average settlement for the period was DKK 29.28 per kg compared to DKK 30.39 per kg. For suppliers of free-range pigs, the settlement was DKK 15.37 per kg compared to DKK 15.12 per kg in the same period the previous year.
"We have several customers who have entered into strategic partnerships with us, and we have demand from customers who want to enter into similar partnerships. This is really positive and gives us faith that we can lift Friland further over time", says Søren Tinggaard.
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