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The Innovators Global Network have organized a "smart food tour" of the UK, and the Netherlands in the autumn of 2003. The purpose of this trip is to examine key innovations in food quality and food safety standards in the EC.
The delegation will be comprised of senior executives from leading North American food-retailing, processing and production organizations. We have organized a series of meetings, tours and interactive sessions with leading European organizations that are at the cutting edge of developing food value chains. Also, you will meet with key government regulatory bodies who are responsible for food safety policies.
It is imperative that North Americans involved in the agri-food and food industry have a detailed understanding of the trends that are driving the European food market.
The Euro Smart Food Tour will focus on six key areas:
The European Smart Food Tour will provide you insights and contacts into one of the world's most important and sophisticated food markets.
Europe is generally considered to be at the forefront of food quality and food safety issues. They have lived through BSE (mad cow disease), salmonella-contaminated eggs, foot and mouth disease and the impact these diseases have on their food industries and economies.
The Europeans responded by putting 'best practices' in place to restore consumer confidence in their food supply.
Europe in many respects is setting global standards when it comes to food quality and food safety. Also, consumers from other countries are beginning to ask "If the Europeans are concerned about the safety of their food and GMOs then maybe we should be as well?"
They were the first in the world to call for a ban on GM foods and demand explicit food labeling. In response, the EU has recently enacted the toughest food labeling legislation in the world.
Europe's food industry is not only reactive - but proactive as well. Some of the origins of food value chains can be traced to retailers like the UK's grocery chain Sainsbury's and bakeries such as Warburtons. They recognize the importance of sharing information with their suppliers along the food chain in hopes of meeting the ever-increasing demands for higher food quality and safety being demanded by their customers.
You will arrive in London on Sunday, October 5 and be taken to your hotel. The afternoon will be free to get unpacked and rested up for the remainder of the week. There will be an informal gathering planned for Sunday evening to allow you an opportunity to get acquainted with the other smart tour travelers.
We will begin on Monday morning with the Euro Smart Food Tour briefing that will outline in detail the entire week of activities.
The first session will be an information sharing exercise looking at food issues and trends both from a European and North American perspective. A number of agencies and organizations we will be meeting throughout the week in the UK will be invited to attend.
Dr. David Hughes
Professor of Agribusiness and Food Marketing
Department of Agricultural Sciences - Wye, Imperial College
David Hughes has over twenty years experience in the fields of agribusiness management and food marketing. As Professor of Agribusiness and Food Marketing he has responsibility for directing undergraduate and postgraduate degree programs, managing the research program on the food industry, and liaison with senior representatives of the agribusiness and food industries in Europe. He undertakes seminars on strategic management issues in the global food market to senior management from major firms in Europe, SE Asia and Australia/NZ and advises several companies on export marketing strategies for penetrating markets for food products in Europe and North America.
Imperial College focuses on issues relating to food safety and quality assurance, food composition, food microbiology, genetic modification, agricultural and food policy, corporate social responsibility and supply chain management. [Additional information on Imperial College is provided in the back of this document]
Dr. Ulrich Kihm
President & CEO
Food Safety Solutions, Bern, Switzerland
Ulrich Kihm's career has been built from his wide diversity of professional skills and his profound knowledge of infectious diseases and zoonoses, combined with his more than fifteen years of experience in the field of animal health at the international level. For the past 10 years he has been the Chief Veterinary Officer of Switzerland, working to control BSE among other important diseases. Dr. Kihm recently chaired the International Expert Panel into BSE in Canada and how the respective government agencies responded to the crisis.
Dr Kihm also teaches Veterinary Public Health at the Veterinary Faculty of the University of Bern, Switzerland. He currently is the CEO of a private company SAFOSO Switzerland, Safe Food Solutions Inc.
Safe Foods Solution is a consulting company providing professional services in all aspects of food safety on a global level with a primary emphasis on foods of animal origins. The integration of processes from stable to table is the focus of their expertise as safe feed and healthy animals are the prerequisites for safe milk, meat, eggs, honey and other animal- derived products. Healthy animals - safe products - healthy people. SAFOSO utilize a world wide network of experts to address issues of animal health and food safety at each step in the food chain from stable to table.
Accessing Real Time Data Anywhere in the World
Bill Miller
Chief Scientist
Telegnomic
Telegnomic Limited helps food processing enterprises access real-time data from physical assets virtually anywhere in the world - no matter how remote. The company's unique Asset Intelligence System (AIS) captures and transmits physical data from remote locations to a central resource. This information is made available to clients in a comprehensive range of formats developed for their unique requirements. The Telegnomic¨ Asset Intelligence Systemú delivers critical environmental and production information for food producers, to optimize business performance.
Examples of the usage of the Telegnomic¨ Asset Intelligence Systemú in this industry vertical include hog production, industrial plant waste water and odor monitoring, temperature and air quality in feed stores, general buildings and equipment performance/health, plus workflow management and workforce monitoring.
In March of 2003, Telegnomic signed a multi year partnership contract with Elite Swine Inc. (ESI). ESI, a subsidiary of Maple Leaf Foods Inc (MLF). ESI is the first of the MLF subsidiaries to implement the Telegnomic technology. Food retailers like Sainsbury's use technology developed by Telegnomic as well.
The Sustainable Agriculture Initiative was founded by Groupe Danone, Nestle and Unilever in 2002. This organization actively promotes international sustainable agriculture policies. We have invited this Geneva based organization to address the audience in order to find out why SAI Platform was created, and how it supports the development of and communicates worldwide about sustainable agriculture involving the different stakeholders of the food chain.
Rank Hovis produces more than one million tonnes of flour per year in 11 mills throughout the UK. Rank Hovis is the UK's leading Flour Miller. They have an extensive product portfolio including a comprehensive range of flours and mixes and supply bakers such as Warburton's.
They are owned by RHM, which is one of the largest food companies in the UK and Ireland. RHM produce some of the leading food brands like - Hovis, Mr. Kiplings, Shrewood's & Bisto. RHM also creates innovative food products for companies like Marks & Spencer and McDonald's
Warburton's is a century-old family firm and Britain's largest independent bakery, producing more than 3 million loaves of bread a week. Warburton's bread is known to be of high quality and is often twice the price of a regular loaf.
Warburton's has always used Canadian Western Red Spring (CWRS) wheat. Concerned over declining quality, Warburton's entered into an agreement with the Canadian Wheat Board to use identity-preserved contracts to source specific varieties of wheat. Manitoba farmers provide Warburton's with particular varieties of CWRS through production contracts.
It can be a puzzling challenge trying to build brand awareness for your food products, given today's complex and discriminating consumers. We will hear from a leading UK advertising and branding expert on how best to brand and position your products to consumers looking for both food quality and food safety.
Also, how to make a broad appeal for your food products across all media including traditional and new media. The Internet in the UK is increasingly becoming an important source of food information and purchases.
The British have long been regarded as having the best advertising agencies in the world. This session promises not only to be informative but entertaining as well.
Tuesday will be our "walk-about" day to visit some of the world's best food retailers. Many of the key food and marketing trends you heard about on Day One you will see up-close on Day Two. You will have an opportunity to see, touch, taste and smell the food and hear the sounds of some fabulous food markets and halls.
Marks & Spencer is one of the UK's leading retailers of clothing, foods, home-ware and financial services, serving 10 million customers a week in over 300 UK stores. The Company also trades in 30 countries worldwide, and has a Group turnover in excess of £8 billion.
Marks and Spencer may well be losing customers at a rapid pace in their clothing departments, but one area where they have it right is the food hall.
It may be a bit more expensive than many of the other supermarkets, but the quality is considered to be extremely high.
Chicken tikka masala has a truly postcolonial history, produced when one of the world's greatest cuisine found itself confronted by a British palette unused to anything spicier than table salt. Legend has it that a Bangladeshi chef made it up when a British customer demanded gravy with his chicken tikka. He took the dish back to the kitchen and added a tin of tomato soup, cream and some spices (masala).
Most recently, Former Foreign Secretary Robin Cook acclaimed chicken tikka masala as modern Britain's favourite dish. Marks & Spencer sells eight tonnes a week and 10 tonnes are produced a day for supermarkets by Noon Products in Southall. But like all things modern, the dish itself is almost unknown in India!
Waitrose combines the convenience of a supermarket with the expertise and service of a specialist shop. Fresh produce arrives daily from all over the world. Bread is baked throughout the day on the premises. They seek out fresh fruit and vegetables all year round. Their fresh poultry and meat selection aims to be of the highest quality.
Of vital importance to Waitrose is the provenance and traceability of the food that is on the shelves. Each of their buyers is an expert in his or her own field. Their job is to seek out the best sources of the best quality food and unusual ingredients that can't be found in other supermarkets. Much of their time is spent with the farmers, growers and suppliers, building relationships based on trust and respect. Wherever possible Waitrose buys British. Increasingly, they are also sourcing local produce from small growers and suppliers close to individual Waitrose stores.
J. Sainsbury's is one of the United Kingdom's largest supermarket chains, operating more then 400 stores with 130,000 employees. Sainsbury's has developed an excellent reputation over the years and has worked to provide their loyal shoppers with the widest selection of food and services possible.
In the 1990s, Sainsbury's began forming close value chain relationships with key suppliers of fresh produce, including beef, veal, lamb, pork, potatoes, onions and fresh fruit. Sainsbury's took a proactive role in linking primary food producers with processors and manufacturers.
Lord Sainsbury of Turville is Parliamentary Under-Secretary of State for Science and Innovation and is Chairman of J. Sainsbury's supermarkets
The Food Standards Agency is an independent food safety watchdog set up by an Act of Parliament in 2000 to protect the public's health and consumer interest in relation to food.
The Food Standard Agency's guiding principles are:
The Agency's key aims between 2001 and 2006 are to:
Although the FSA is a Government agency, it works at 'arm's length' from Government because it doesn't report to a specific minister and is free to publish any advice it issues.
The Agency is led by a Board that has been appointed to act in the public interest and not to represent particular sectors. Board members have a wide range of relevant skills and experience. They are accountable to Parliament through Health Ministers, and to the devolved administrations in Scotland, Wales and Northern Ireland for its activities within their areas.
DEFRA brings all aspects of the environment, rural, farming and food production policy together under one department. DEFRA has been in existence since 2000.
The health and welfare of animals is central to DEFRA's work of protecting and improving livestock and controlling and eradicating disease. Responsibility for handling BSE and Foot and Mouth disease falls under DEFRA's responsibility.
DEFRA is also responsible for the control of the deliberate release of genetically modified organisms (GMOs). In October, 2003 DFRA will be making a recommendation on whether GM crops should be allowed to be grown in the UK. DEFRA plays a role in EU and international policy on the environmental safety of GMOs.
We will spend an informative morning hearing how DEFRA and the UK dealt with BSE and Foot and Mouth disease and what plans they have for GM crops in the UK.
We will depart London for Amsterdam, The Netherlands on Wednesday.
There are currently no plans for Wednesday evening in Amsterdam.
We will travel to Wageningen University, which is one of the world's leading education and research centres in the plant, animal, environmental, agro-technological, food and social sciences.
You will visit Wageningen University Research Centre (Wageningen UR), which integrates the University with the DLO Netherlands Agricultural Research Department and the PO Netherlands Organization for Applied Research in Agriculture.
Research at Wageningen University is focused on four central themes:
RIKILT conducts research on behalf of the safety, health and quality of agricultural and horticultural products, both primary agricultural product and foods. An important aspect of RIKILT research concerns statutory tasks in the area of food safety.
Some of the core activities of RIKILT are:
A vast array of methods is needed to evaluate the quality and safety of foods. These methods are based on physical, analytical or biomolecular principles.
At RIKILT the chemical, biochemical and microbial quality of foods such as dairy products, fruits, vegetable and meat is ascertained.
Research on Genetic Modified (GM) food crops plays an important role within RIKILT.
KLICT is a government agency, which stimulates the development and application of knowledge in the area of chain and network science in The Netherlands. Within this process, it serves as a broker and a 'liaison office' between the business world, knowledge institutes, social organizations and the government.
KLICT focuses on the supermarket industry and the food industry; agribusiness; the transport, distribution, logistics sector and the ICT sector.
The ideas and initiatives for projects get form in strategic research projects, multi client projects and pilot projects, for which the business world, social organizations, knowledge institutions and government closely cooperate. The ultimate goal is to strengthen the competitive position of the Netherlands and, at the same time, reducing the social-economic bottlenecks such as accessibility, economic pressure, and lack of space.
Making use of its Interdepartmental Commission for Economic Structure (ICES), the Dutch government has earmarked financial support for these projects. This support will be combined with financial support from participating businesses, social organizations, knowledge institutes and the government at project level.
Cehave International (a division of the Cehave Landbouwbelang Group) is a leading co-operative organization in the agri- and food-business and based in The Netherlands. They own feed production facilities in the Netherlands, Belgium, Germany and Poland, and supply a large range of quality feed products. Cehave have 11,000 members and produce more than 2.5 million tons of feed per year.
Cehave International produces feed, concentrates and premixes in NEN-ISO approved factories. Integral Quality Control (IQC) of raw materials starts in the country of origin and only ends after delivery to the customers, assuring a constant quality.
Cehave have been awarded the "Sterlab" accreditation. Intensive research by Cehave in the area of foodstuffs, vitamins, probiotics, enzymes and undesirable substances in the final feed, leads to the production of high quality products in the chain from raw material to meat, eggs and milk.
The company evaluates new feed concepts on pigs, poultry, and beef cattle at its Laverdonk animal-experimental station. CCL Research is in the possession of a multi-disciplinary team of researchers and consultants, including veterinarians, biochemists, microbiologists, technologists, physiologists, zoo-technologists, and food dieticians. The staff specialize in animal nutrition, food safety, and meat quality; they collaborate in the promotion of the production of high-quality, safe, and nutritious food.
Rabobank is a market leader in the Netherlands, and a world leader in food and agri-financing. In the Netherlands, Rabobank offers a full range of products and services to the Corporate market. Internationally, Rabobank focuses on the food, beverage and agribusiness sectors offering specialized products and services from 102 offices in 26 different countries.
In every location, they have a network of prominent industry specialists, leading researchers and industry analysts. The combination of banking skills with highly specialized market knowledge provides clients with unprecedented financial expertise.
'Euro Retailer Produce Working Group', is a platform of leading retailers in Europe active in the retail business of the agricultural food industry.
GAP stands for 'Good Agricultural Practice', a minimum production standard for a good agricultural practice of horticultural products (e.g. fruits, vegetables, potatoes, salads, cut flowers, and nursery stock).
EUREP uses GAP as production standard for the certification of good agricultural practice in the agricultural and horticultural industry. At the moment the GAP standard is being applied in fresh fruits and vegetables. All kinds of agricultural products for human consumption can be certified with this standard. Special standards for flowers, animal production, grain, coffee, and feed are in development.
Eurepgap is based on the principles of risk prevention, risk analysis, sustainable agriculture by means of Integrated Pest Management (IPM) and Integrated Crop Management (ICM), using existing technologies for the continuous improvement of farming systems.
You will tour one of the most popular and leading food retailers in the Netherlands belonging to the Ahold chain. Albert Heijn is Ahold's flagship Dutch supermarket company. They have about 700 stores throughout Europe and sales in excess of 5.5 billion euro.
The chain is known to be sensitive to changing tastes and customer requirements. They have increased their selection of organic products and their own green-labeled brand yogurt is highly popular.
Albert Heijn operates four formats: the conventional Albert Heijn supermarket, the extra-large Albert Heijn XL supermarket, the AH to go convenience store and the internet-based home delivery service, Albert (www.albert.nl), which guarantees home delivery within 24 hours.
In January 2002, the new C-store format at Albert Heijn was introduced in busy shopping streets, hospitals and railway stations. The railway outlets are operated by Albert Heijn's largest franchise partner, Dutch National Railways.
The tour package includes your airline tickets. Departures will be out of most major Canadian/US cities offering KLM/Northwest airline service on Saturday, October 4, 2003. If you do not have KLM/Northwest service you will be responsible for reaching a nearby airport that does offer KLM/Northwest service.
You will fly to London, England arriving on Sunday, October 5 and remain there until Wednesday, October 8, and then be flown to Amsterdam. Departures back to North America will be out of Amsterdam's Schipol Airport on Saturday, October 11. You will arrive back home on October 11, 2003.
Your hotels are included in the package. You will be staying in 4 star hotels in both London and Amsterdam. The Royal Horseguard Hotel in London and The Meridian Hotel in Amsterdam. Breakfast is included with the package.
Your land transportation to all smart-tour scheduled functions and events is provided as well. You will also be taken to the airport for your departure flight home.
A CD-ROM including your photograph, biography, organizational profile and a link to your website will be produced by The Innovators Global Network and distributed to all the groups and individuals we will be meeting with in Europe. Photos and biographies need to be submitted by September 1, 2003 to be included on the CD-ROM.
CD-ROM of photos and informational record of the tour will be sent to you within 30 days of your return.
Total cost for this package will be $CD 7,500.00 ($US 6,200 - price may vary depending on point of departure). The Innovators Global Network member's price: $CD 7,300.00. Availability and prices subject to change after August 15, 2003
Some of North America's leading corporations and institutions have gone on one or more Smart Tour organized by The Innovators Global Network. We have listed below some organizations below who you are likely to be familiar with.
Corporate Affairs International (CAI) |
Dalhousie University |
EDS Canada |
Ensis Management |
Genome Canada |
Genome BC |
Global-TV |
Hydro Quebec |
IBM Canada |
Manitoba Industry, Trade and Mines |
Manitoba Film & Sound |
Manitoba Hydro |
Meta Group |
O & Y Enterprises |
Paragon Consultants |
Promoting Calgary Inc. |
Saskatoon Regional Economic Development Association |
Sherbrooke University |
St. Boniface Hospital Research Centre |
TRLabs |
University of Manitoba |
University of Saskatchewan |
In the UK it is generally illegal to sell meat from cattle over the age of 30 months (OTM) for human consumption. BSE has not been found in the UK in cattle younger than 30 months since 1996. In other EU countries, cattle over 30 months must test negative for BSE before being sold for human consumption.
It is illegal for cattle to be fed material that contains meat and bone meal, which is thought to have caused the spread of BSE in the 1980s. Also, by law, the parts of cattle most likely to contain BSE must be removed. These parts are known as Specified Risk Material (SRM). Harmonized controls apply in all other European Union (EU) countries.
These controls are based on current scientific knowledge and are designed to reduce the risk to consumers to an extremely low level. The risk from BSE cannot, however, be removed completely.
The Food Standards Agency's Meat Hygiene Service and local authorities enforce the controls on SRM. The State Veterinary Service enforces the controls on animal feed.
The incidence of BSE in British cattle has fallen steadily since 1996, which lead the UK Food Standards Agency to start reviewing the OTM rule in 2002.
In March 2003, a "core stakeholder group" of scientists, consumers and farmers recommended that the OTM rule be dropped, either completely or for those cattle born after 1996.
This recommendation was based on the best estimate calculated by "independent experts" that switching to testing at slaughter would lead to only 0.04 additional deaths over the next 60 years. Using the most pessimistic assumptions, the figure rose to 1.6 deaths. The stakeholder group also noted that dropping the OTM rule would reduce costs by 93 per cent.
The independent experts have now been revealed as Neil Ferguson and Christl Donnelly of Imperial College London. The Food Standards Agency have given until July to hear any appeals to the recommendations of the "core stakeholder group". After that the FSA will make its proposals to government.
Europe's new GMO rules are among the toughest, if not the toughest, in the world. One key controversial aspect of the new law is the that all GM goods be labeled - even highly processed products like oils in which genetic modification cannot be detected because the DNA or protein has been destroyed.
In a suit brought to the WTO in May 2003, the US government alleges that the EU's five-year moratorium on the approval of new genetically-modified (GM) foods violates the rules of the WTO.
While there is no official ban on GMO's, a de facto ban is widely recognized. Europe does buy some biotech crops such as soybeans. But until last year, the EU hadn't approved a single new GM product since 1998. Since then, only two applications for new products have passed.
In contrast, soybeans, corn, and cotton genetically modified to withstand herbicides make up a significant portion of the U.S. food supply. In the United States 75 percent of soybeans, 71 percent of cotton, and 34 percent of corn are genetically modified, according to the Department of Agriculture. In 1998, the United States exported $63 million worth of corn to Europe. Last year, the exports were down to $12.5 million; U.S. farmers are estimated to lose US$300 million each year due to the ban.
If GMO products are to be made accessible in the European Union, it is important to restore public and market confidence. Consumers want an effective choice between GMO and non-GMO products. Labeling and traceability of GMO products will enable them to choose.
Britain will decide in October whether GM crops should be produced commercially. But Michael Meacher, who was removed as Environment Minister, has urged Prime Minister Tony Blair to delay issuing licenses pending further tests, including human trials.
Although Mr. Meacher emphasized he is not against bio-technology, his cautious stance reflects that of the EU which has risked a trade war with the US by blocking the import of GM products into Europe. The White House made clear that President Bush regards the issue as a litmus test for improved US-Europe relations, which remain bruised by the Iraq war. "It's a priority. It's something we take seriously," a White House spokesman said.
In a recent EU survey of some 16,000 consumers, it was revealed that most Europeans, with an opinion about biotechnology, support it. Almost half (44%) said they are optimistic about the long-term affects of biotechnology, while less than one-fifth (17%) were pessimistic. One-quarter (25%) were undecided about the long-term affects of biotechnology.
Europeans distinguish between medical and agri-food applications when it comes to biotechnology. The majority answering the survey supported the medical benefits of biotechnology, but not GM foods. They question the benefit of GM food to them personally and have concerns about potential health risk from consuming food that has been genetically modified.
Even if GM foods lowered their food costs or reduced the amount of herbicides and pesticides used in agricultural production still doesn't change their acceptance of GMOs.
Support for GM crops is lukewarm at best in Europe. Some countries support GM crops such as Spain, Portugal, Ireland and Finland. Those opposing GM crops are France, Italy, Greece, Denmark, Austria and Luxembourg.
Key reasons influencing European attitudes towards GM foods:
Food safety scares, "They (politicians and government officials) let mad cow disease happen. How can we know the new GM foods are safe?"
Involuntary nature of change, "Why weren't we told we we're eating these things?"
Cultural differences, "We like our foods just the way they are!"
Economic incentives, European farm subsidies are the highest in the world.
A new battle is emerging on the horizon regarding GMOs in Europe. President George W. Bush in a recent speech at BIO 2003 in Washington DC took the European Union to task for prolonging starvation in Africa by refusing to allow the import of genetically modified foods.
President Bush said that the ban "was unfounded and unscientific".
It prevents African farmers from importing the food technology, which could help to make crops resistant to disease while boosting yield, for fear that the produce would be cut out of overseas markets. "For the sake of a continent threatened by famine, I urge the European governments to end their opposition to bio-technology," he said.
Europe's opposition to GM foods has undermined confidence in the products in the developing world, particularly Africa. However, India has undertaken experiments with genetically modified cotton, and this month decided to feed "nutritionally enhanced" GM potatoes to children.
He urged Brussels to lift the ban and said it was the special responsibility of developed nations "to combat hunger and disease in desperate lands".
Global sales of organic food & drink increased by 10.1 percent to USD $23 billion in 2002.
Much of the current growth is being observed in North America where the US market is expanding at a fast rate. American consumers are increasingly demanding natural and healthy products and this is stimulating organic food sales. The organic fresh fruit & vegetables sector accounts for most sales in the American organic food industry.
Europe for most of the last decade had the largest market for organic food & drink however it has been overtaken by North America. Market growth slowed to 7.8 percent in 2002. The German market was hit by the Nitrofen food scandal and growth rates in countries like the UK are slowing. Organic food sales continue to rise at a healthy rate in countries like Italy and Switzerland. Slowing growth rates are causing the organic meat & dairy sectors to suffer from over-capacity in some countries.
McDonald's is the latest multinational to jump onto the organic bandwagon.
In February 2003 the international fast-food chain announced it would be selling organic milk in all its British restaurants.
Consumers in the UK are increasingly shying away from fast food and opting for healthier alternatives like fresh sandwiches.
McDonald's is aiming to buck this trend by using healthier ingredients. It has introduced lower-fat sauces, diet drinks, sweeteners and promotional salads. The switch to organic milk is part of its strategy to give the fast-food chain a healthier and more environmentally-friendly image.
Competition is stepping up in the European organic meat industry as a number of country markets suffer from over capacity in 2003.
Organic meat supplies were falling short of demand for a number of years and this encouraged many meat producers in Europe to convert to organic production methods. This is causing large organic meat volumes to come into a market that is showing slowing growth rates. European sales of organic meat products market were increasing at over 20% per annum since 1998 however market growth is projected to slow to 9.5% this year.
In spite of revenues falling by almost a quarter in 2002, the German market remains the largest in Europe. Organic meat sales fell sharply in the middle of last year due to a food scandal involving organic grains. Consumer confidence in organic meat products is returning and positive growth is being observed again this year.
The Italian and British markets reported the highest growth in recent years. There has been a large rise in organic meat production in the UK and this is causing retailers to substitute imports with domestic products. The Italian market remains under-supplied and organic meat imports continue from a number of countries.
The most important sales channel for organic meat products are the supermarkets, which had 51% market share in 2002. Although most sales are from the supermarkets, the specialist retailers remain important sales channels in many countries. Organic food shops and butchers account for most organic meat sales in the German and Italian markets.
The organic beef segment accounts for most revenues in the European organic meat products market. The BSE crisis and the relatively low price premium are factors behind the high popularity of organic beef with consumers. The high cost of organic grains is responsible for organic pork and organic poultry to have the highest price premium and this hinders consumer demand in some countries.
The European organic meat products market is highly concentrated with about 15 companies having a significant presence. Conventional meat companies are dominating most country markets and they have entered the organic sector either via directly supplying organic meat products or via acquiring dedicated organic meat companies.
Although the large companies are expected to continue to dominate, there are opportunities for small-medium size suppliers and new entrants.
Growth in the Dutch organic food industry is slowing and this is causing supply-demand imbalances.
The amount of organic farmland increased by 9.7% to 43,000 hectares in 2002. The organic area is one of the lowest in Europe and the percentage of total farmland at 2.2% is much below the EU average of 3.2%.
The highest rise in organic farmland was observed between 1999 and 2001 when the land area expanded from 23,000 to 39,200 hectares. The slowdown in conversion rate has been partly due to a change in government policy.
The Dutch minister of agriculture ceased to provide subsidies to farmers converting to organic agriculture in 2002 as it wanted the industry to be market-driven and not production-led. The Dutch government was concerned that the increase in organic food production would not be matched by consumer demand.
The government has directed payments towards market development initiatives. It is sponsoring marketing campaigns that encourage consumers to buy organic foods, and it has set up a Task Force for Organic Market evelopment. One of the purposes of this task force is to develop strong supply chains from farmers to retailers.
Organic food sales are also increasing at a slowing rate in the Netherlands. The market was worth USD 360 million in 2002, representing 1.4% of food sales. The government has set a target of organic food sales reaching 5% of food sales by 2005 and a target for organic farmland to reach 10% of all farmland by 2010. Both these targets appear over-ambitious.
The organic food industry in the Netherlands is one of a growing number in Europe that is facing supply-demand imbalances. Organic dairy farmers comprise almost a half of all organic farmers and overproduction is causing significant volumes to be sold as non-organic milk.
Much of the increase in organic farmland in 2002 was due to a large rise in organic hog farmers. Production of organic pork is projected to quadruple between 2002 and 2004. The increase in supplies will not be matched by demand and it is envisaged that up to half of the organic pork produced could go into the conventional pork market.
The outlook for the Dutch organic food industry is not all grim however. Retail competition is stepping up and this is driving market growth. The restructuring of the Laurus Group is broadening the number of retail channels for organic products, and organic food shops are fighting more fiercely with the supermarkets for market share. Organic food sales will continue to rise in an industry that is becoming mature and highly competitive.
Consumer demand for non-dairy drinks is flourishing in Europe. Revenues are projected to expand by 22.1 percent to EUR 228 million in 2002 with the highest growth being observed in the British and German markets.
The British non-dairy drinks market has become the largest in Europe this year. Growth rates in excess of 30 percent per annum since the late 1990s have made British consumers the largest spenders on non-dairy drinks in Europe. The French market was initially the largest however market growth rates have slowed as consumer demand has stabilized.
The German non-dairy drinks market is projected to show the highest growth in the coming years. Revenues are expected to increase by 35 percent in 2002 and high growth is to continue in the near term as consumer interest in non-dairy products rises. The Italian market reported the highest growth in recent years with volumes expanding over ten-fold since 2000. A major driver in the Italian and German markets is increasing retail penetration with non-dairy drinks becoming widely available in mainstream retailers.
The European non-dairy drinks market is expected to show compound annual growth rate of 13.2 percent and revenues are forecast to top EUR 400 million in 2007.
Initially consumers suffering from allergies mainly bought non-dairy drinks as a dairy milk substitute. There was also high interest from some consumers who wanted to reduce or avoid livestock products.
Consumer appeal has widened considerably in recent years due to lifestyle changes and as the health & nutrition benefits of non-dairy products have come to light. Soya-based products in particular have benefited from scientific research linking soya consumption to low levels of cholesterol and reduced incidence of ailments like breast cancer and osteoporosis.
Soya drinks dominate the European non-dairy drinks market. Companies are focusing on product development to expand the category - new products launched in the last year include chilled soya milk and soya smoothies.
The supermarkets are providing more shelf-space to non-dairy drinks. Traditionally most sales have been from specialist retailers like health food shops however the market share of the supermarkets exceeded that of the specialists for the first time in 2002. Soya drinks are most evident in the multiples with rice drinks the second most common. Oat drinks and nut drinks are rarely found in the supermarkets.
