The BSE crisis, the strong pound and over-supply are combining to create a recipe of disaster for the UK’s 14bn meat industry. An extra ingredient is the rivalry between beef, lamb, pork and poultry producers.
Gwyn Howells, marketing director of the Meat & Livestock Commission, the statutory body which promotes sales of beef, lamb and pork, will have his work cut out when he is promoted to director general in April (MW November 12).
Industry insiders rate Howells for his marketing skills acquired at Reebok, Courage and Gallaher, but say he will have to become a political animal to deal with the competing demands of red meat producers.
Pig farmers have in the past criticised the MLC, some even threatening to set up their own break away body.
Howells says of the challenges facing him and the Commission: “First of all there is a significant over-supply in Europe of product, particularly pig meat, which is partially to do with no longer being able to export to Russia.”
The answer, he claims, is to substitute UK imports with British meat and to develop new products designed with consumer lifestyles in mind.
But with an industry hit by plunging prices, some farmers are questioning the manner in which the MLC is funded. Nearly two-thirds of the MLC’s income is derived from a levy charged on each animal which goes to slaughter. About three-quarters of the levy comes from the farmer and the other quarter from the processor.
Robert Forster, chief executive of the National Beef Association, says: “Farmers are aware that less and less goes on production-led projects. If there is going to be heavy emphasis on promotion, should there not be a greater contribution from processors and retailers?”
But Howells says: “It’s wrong to underestimate the effect of in-store promotional activities and direct advertising undertaken by retailers.” He points out that farmers are consulted on levy rates and that the MLC conducts research into suitable products for consumers. Long-term rumblings of discontent from the pig industry are also an issue.
Grenville Welsh, chief executive of the British Pig Association, admits the pig industry had been dissatisfied with the MLC. It is now keeping a watch on the MLC, which has been restructured using industry members sitting on committees with decision-making powers. He says: “We don’t want to demolish it and replace it with something else that will not have levy powers.”
John Thorley, chief executive of the National Sheep Association, thinks the way forward is for all red meats is to stick together – especially in the face of competition from the poultry trade.
Howells also feels that more can be achieved through advertising and developing relationships with exporters and the retail and catering industries if the red meats stay in one body.
But there are obvious marketing conflicts. Pork producers have tried to capitalise on the BSE crisis by promoting the benefits of minced pork with an advertising campaign and the Pork Mince Quality Mark, both devised by the MLC.
Howells admits: “There’s conflict, but really the meats are complementary.”
While in charge of the MLC’s 28m marketing budget, Howells has overseen the development of new easy-to-cook cuts of lamb in an initiative called Quick Lamb, designed to appeal to young consumers with busy lives.
Even supermarkets are investing time and money to give consumers easy-to-cook meat. Safeway, for example, has launched a microwaveable pork loin steak.
John McKnight, deputy managing director of MLC’s main advertising agency BMP DDB, says: “The meat market has been under pressure for a long time and there are bigger factors at play – it’s not all to do with health.”
But Howells says that 1998 sales of red meat are projected to be the highest since 1991. He has already launched the Recipe for Love series of ads, created by BMP DDB and then devised the Quality Minced Beef Standard in June 1996 in order to boost consumer confidence.
And Howells expects the worldwide beef export ban to be lifted by next spring.
The MLC provides a crucial role in channelling retailers’ and consumers’ demands back to the farming community.
It will be up to Howells to gain the farmers’ confidence and get them to adapt to consumers’ eating habits. If he fails to persuade them to invest in product innovation then the future of their industry could well be in jeopardy.