Dreary Forecast for the UK Meat Market

UK - Meat is an integral part of the UK diet, consistently accounting for nearly a quarter of total household expenditure on food. According to National Statistics, UK consumers spend more on meat than on any other category of food, with the exception of fruit and vegetables, yet, in spite of this, the meat industry growth is expected to remain low.
calendar icon 8 April 2008
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Photo: StockXchange

Consumer Trends reveals that, in 2006, the next-largest category of consumer expenditure on food, after meat, was bread, followed by milk, cheese and eggs.

Sales of meat and meat products have grown strongly over the past 5 years, since 2003, as the problems surrounding animal farming, such as BSE (bovine spongiform encephalopathy), swine fever and foot-and-mouth disease faded from public perspective. As a result, sales grew in value by 14.4% during the period between 2003 and 2007. Rising sales of premium products, including organic, free-range and added-value goods, combined with recovering consumer confidence in meat, have helped to drive the market forward.

Home-produced meat accounts for a varying proportion of UK domestic meat supplies. In 2006, home-produced poultry accounted for 80.5% of domestic supplies, but only 43.9% of bacon and ham came from the UK. Although UK farmers have lost market share over the past 5 years, since 2003, their share of the market appears to have stabilised in the past 2 years, since 2005, which reflects the increasing preoccupation of UK consumers with welfare and the environment.

The meat-processing industry in the UK continues to consolidate, with the total number of VAT-registered enterprises in this market declining in 2007. Businesses in this industry are also growing, as more vertically integrated operations are created.

The major supermarkets dominate the sale of fresh and frozen meat, accounting for around 84% of sales in 2007. Butchers now account for around 11% of sales, with small stores, farm shops and farmers' markets accounting for the remainder. The catering industry has also become a major market for meat and now accounts for 30% of total consumption. The major grocery retailers are increasingly focusing on supplying premium products, a development that reflects the growing interest among consumers in where their food comes from and issues such as animal welfare.

The National Statistics expect the meat market to continue to experience relatively low growth in 2008, reflecting the impact of the outbreak of avian flu in 2007, which is likely to have a lingering impact in 2008. However, sales growth improve thereafter. Growth in demand for added-value products in the chilled cabinet, as well as premium products such as organic and free-range meat, will drive the market. Furthermore, global imbalances in supply and demand will fuel inflation in the market.

Further Reading

More information - You can view the National Statistics report by clicking here.
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