A question of priorities
Quality Meat Scotland (QMS) has clearly identified France, the Benelux countries and Italy as the top priority markets in its bid to re-build Scotland's red meat exports.
The promotional body's export strategy for 2006/07 also attaches medium priority status to Germany and the Nordic countries, and earmarks the USA as a potential route for lamb sales. The document states: "A watching brief is recommended for USA (lamb), Middle East and Far East in particular for small volume, high-value beef sales into the top restaurant sector." And it suggests the targeting of volume opportunities in emerging countries, especially "those in which there is increased prosperity and therefore a move towards a higher plane of nutrition or where a population increase is forecast".
As revealed at the recent QMS conference in Dundee entitled "New markets, new challenges, new future", the organisation's agenda of activities proposed for 2006/07 includes: pan-European launches backed by PR campaigns in France, Italy, The Netherlands and Belgium; the re-launch of the Scotch Beef Club in Europe; a substantial presence at leading trade fairs, including SIAL in Paris this October and SIRHA in Lyon next January, as well as a major consumer presence at Salone del Gusto in Milan this November. In addition, top Italian food programme Mela Verde is working with QMS to film two episodes in Scotland later this year - one on beef and the other on lamb. The programme attracts some 6 million viewers every Sunday.
The QMS strategy document acknowledges that some fundamental changes have taken place in export markets during the decade in which the ban has been in place. It highlights in particular: an increase in "meat nationalism"; the introduction of national quality marks and retailer-specific quality marks; the high priority placed on identification and traceability; reduced emphasis on the carcase trade; a decline in the number of independent butchers; an upturn in out-of-home eating; and cheaper products - as well as cheaper labour - due to EU enlargement. The strength of sterling is also identified as a key difference compared to the mid 1990s although, speaking in Dundee, Scotland's environment and rural development minister Ross Finnie cast doubt on whether the exchange rate would prove to be a major disadvantage for exporters.
Among the potential threats to exporters outlined in the document, QMS highlights "intense competition" from within the Scottish trade on both price structure and product specification, and warns against "complacency over Scottish origin" with the comment: "Being Scotch may not be enough."
On a positive note, QMS argues that its exports push is likely to be aided by rising worldwide consumption of beef, the PGI status of both Scotch Beef and Scotch Lamb, and the fact that 95 per cent of Scottish beef production comes through a fully-integrated assurance scheme. And it adds: "The reputation of Scotch and Scotland has remained high and interest from former customers is encouraging. The image and reputation of Scotch beef, we believe, has remained relatively untarnished by the worst effects of BSE." Argentina's recent decision to cut supply to world markets extended Scotland's export opportunities, it was added at the Dundee conference.
QMS describes information as "the key to understanding markets" and insists it must be presented to industry "in a concise, usable and reliable manner" to enable companies to make informed decisions. Meanwhile, to help in identifying sales opportunities abroad, QMS will look to undertake inward/outward missions and learning journeys for Scottish processors and producers to arrive at a better understanding of a particular export market's requirements. "In view of the strong competition at the lower end of the beef market, and the commodity, price-based nature of the sector, it will be essential to secure the high ground first," argues the strategy document.
In terms of proposed PR and communications activities, the QMS strategy underlines the value of the Scotch Beef Club and attendance of major food fairs, which provide exporters with "an opportunity to interface directly with consumers". The promotional body is also planning to set up a multi-lingual website to communicate with the trade and consumers in the priority target markets of France, Italy, Belgium and The Netherlands.
QMS business development manager Huub Schoemaker explained to the Dundee conference that, despite the 10-year hiatus in export sales, Scotch beef had not been forgotten on mainland Europe, partly because QMS had striven to ensure that contacts with leading customers were maintained. Mr Schoemaker is a key weapon in QMS' attempts to re-build export markets from within: he is one of two business development managers appointed by the Edinburgh-based organisation to help grow Scottish red meat sales in Benelux and France. Their appointment was supported by part funding from the Scottish Executive and Scottish Enterprise.
According to Mr Schoemaker, the major differences in product preferences among EU member states represented a source of opportunity for exporters. Focusing first on The Netherlands, he said QMS was "securing the high ground" by working principally with restaurants, prime retailers and independent butchers "who want to differentiate themselves". The speaker also argued that Scotch beef consumer pre-packs might offer significant sales opportunities in The Netherlands, not least because of the positive consumer image of the product and because of Scotland's proximity.
Promotional activities planned by QMS for the Dutch market include a launch event, presentations to retailers in April, and visits with chefs to this summer's Royal Highland Show. A similar agenda is envisaged for Belgium and Luxembourg, where preparations will also be made for the re-launch of the Scotch Beef Club. The speaker went on to describe the Scotch Beef Club as "a very, very powerful tool" in "capitalising on the strong image of Scotch beef and Scotland".
Statistics presented by Mr Schoemaker confirmed Italy as by far the largest beef and veal importer within the EU, with the country's overseas purchases outstripping its exports by around 250,000 tonnes in product weight terms. Prime targets for Scotland's prime beef exporters are Italy's independent butchers and small supermarket chains - many of whom place strong emphasis on PGI, noted Mr Schoemaker.
In summarising export prospects for Scotland's red meat, the speaker suggested: "The main competitor will be Ireland - it has taken the place that Scotland left." A premium in relation to Irish beef would be accepted by the marketplace, he added.
Another guest speaker in Dundee, Food from Britain's chief executive David McNair, also reinforced the theme that export markets have undergone substantial change since the beef ban was introduced a decade ago. Urging the red meat industry to re-define its customer, he noted in particular that consolidation of the retail sector had become far more pronounced in many Continental countries compared to the UK. In this context, he warned: "You're not going to escape the problems you've got in the UK."
Earlier, Mr Finnie argued that the Scotland's red meat industry would have to make "a fresh presentation" to potential consumers in Europe because millions of them had no previous experience of the product. "Our European customers have not stood still, consumer habits have not stood still," he said.
Overall, speakers at the QMS conference in Dundee were confident in Scotland's ability to re-build a substantial export market for its beef. Overseas sales of beef had been on a strong growth curve at the time the ban was introduced in the mid 1990s, rising from 29,000 tonnes in 1993 to 34,000 tonnes and then 42,000 tonnes in 1994 and 1995 respectively.
Revenue from these sales had advanced from £92 million in 1993 to £108 million the following year, before peaking at £120 million in 1995. As previously reported in MTJ, Mr Finnie believes an annual sales target nearer to £200 million is achievable. "It isn't going to happen overnight," he acknowledged in Dundee. "But we want to get people raising their horizons." This was "a historic time" for the red meat industry in Scotland and the moment to "put behind us the spectre of BSE", he added.
The conference in Dundee underlined the "pivotal role" of QMS in working with the red meat industry to re-build export markets. According to Mr Finnie, the promotional body would not only play a part in identifying opportunities but would also provide cohesion for this renewed export thrust. Praising the efforts of QMS personnel, he suggested they were well equipped to meet this challenge.
Scottish awareness in England
Although the focus of the conference was on re-establishing a strong export presence, Scotland's red meat sector was urged not to forget its huge customer base in England, which consumes around 70% of all beef produced in Scotland. Following QMS' recently-completed, £1 million promotional campaign in London and the Midlands, awareness of Scotch beef has jumped to a record 52% while the proportion of English shoppers prepared to pay more for the product has increased by four percentage points to 43%. The promotional activities began in August last year and included the airing of the "Glen" television advert in England for the first time. Advertising was backed by a sampling tour of key multiple retailers and special promotional initiatives with English members of the Scotch Butchers Club.
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