Volatile pricing puts off meat-eaters
Unsustainable farmgate prices for beef and lamb could lead to a decline in consumption, according to a new report
Unsustainable farmgate prices for beef and lamb could lead to consumer dissatisfaction and ultimately a decline in consumption, according to a new report commissioned by the English Beef and Lamb Executive (EBLEX).
Volatile retail prices are likely to become more common because the security blanket of the EU's Common Agricultural Policy (CAP), which protected beef and lamb supply chains, has been removed with the ending of production subsidies.
The report was produced for EBLEX by independent consultants Promar International says there are significant levels of consumer dissatisfaction associated with highly volatile prices, which is bad news for business brand value and equity.
The research notes there has always been a group of loyal consumers of home produced beef and lamb, but increasing concerns regarding the environment and climate change are now driving significant growth in consumer preferences for locally produced food.
This growth is expected to continue and should effectively add to the numbers of loyal consumers in the future.
Under these conditions the challenge for England's beef and lamb supply chains is to adapt to life without subsidies and build sustainable relationships.
Outlining a number of possible strategies, the report notes that in highly competitive markets such as the UK one of these is to use differentiation to create demand for products. For the red meat sector, differentiation on the basis of eating quality has been an important growth area.
Successful product differentiation not only provides opportunities for growth, but can also provide a degree of protection from volatile prices.
John Cross EBLEX chairman said: "It is clear that the most successful businesses have a number of strategies to manage volatility and provide their customers with the products and services they want.
"However it is time our largest supply chains fully made the transition to the post-CAP world by looking to deliver truly sustainable farmgate prices. Not only does it make sound business sense, it makes sense for our landscape, our society and our consumers."