Danish Crown: Increased sales in a difficult market
Danes buy far more beef products with a Danish Crown logo on them. Danish Crown Beef has increased its sales of branded products - products with its own logos - by 150 percent in the first six months of the financial year compared to the same period last year.
"We have largely succeeded in gaining increased visibility in the cold counter. We are seeing a nice development, even though consumers have preferred our cheaper products for stews and burgers, while we have struggled to maintain the prices of the more expensive cuts such as tenderloin and beef fillet", says CEO of Danish Crown Beef, Finn Klostermann.
With increased sales of its own brands in the supermarkets, Danish Crown Beef continues to build on a good development, and the strategy of higher processing, which also aligns with the Danish Crown group's overall strategy, must be accelerated even more.
"There is demand for Danish meat and the good history of the products. We see that our unit owners are willing to invest in the green transition, and this will have a positive effect on the sale of beef. We must work purposefully to position ourselves in relation to imported meat on the Danish market. It requires additional marketing and innovation, but it is the way to create higher value for the products for the benefit of the farmer", says Finn Klostermann.
The development in the sale of products with a Danish Crown logo on them is very positive, says Group CEO of Danish Crown, Jais Valeur. He points out that this is a signal that the group strategy is working.
"A very nice piece of work is being done at Danish Crown Beef regarding branding and innovation. We continue to invest in that development, and we work hard to ensure that even more Danish consumers choose products from Danish Crown. Danish beef and veal in our brand is strong in the market, and we want to develop that position further", says Jais Valeur.
For the first six months of the financial year, Danish Crown Beef's revenue falls by six percent to DKK 2.95 billion, which is mainly due to lower selling prices for hides for leather production and lower selling prices for by-products. The lower turnover also means that the average settlement to the owners has fallen from DKK 31.7 per kg to DKK 27.9 per kg, which corresponds to 12 percent.
"We have been challenged by a weak leather market, which slowed down hard, especially within leather for the car market. At the same time, sales of by-products have been characterized by lower prices. We have also seen a different German market, where there is increased demand for German meat with a welfare history, and this has required investments, especially in the countryside, which the market is not fully ready to pay for, so it has also cost earnings", explains Finn Klostermann.
However, he sees an improvement in the market for skins in particular, which, like the by-products, is also on the way to a price increase.
"We must have raised the prices so that we can pay the farmer better. After a difficult winter, things are starting to brighten on several fronts. In the past month, we have delivered small increases in settlement, and we believe that we will see further improvements in the coming months as we raise the prices of all our product groups", says Finn Klostermann.
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