Pork is on the rebound

Consumption of pork in the UK is on the up but so too are imports, even though domestic production has begun to recover from a period of decline. with foreign investors gaining an increasing foothold.

The processing sector has also undergone change - including the important Tulip and Flagship Foods merger in 2004 - with the share of domestic slaughtering accounted for by the top five companies rising over the last decade from 37% to 64%.

Survivors of consolidation, however, appear to be forging ahead, with the meat processor Cranswick, for example, reporting pre-tax profit up 44% to £31.1m and turnover up 38% to £441m in the year to 31 March 2006. Its fresh pork sales rose 13% to £97m, with a 20% increase to 14m in retail pack sales.

Overall, the UK pork market appears to be enjoying a lift after a number of flat years, with consumption reaching 818,000t carcase weight equivalent in 2005, second only to poultry in terms of protein consumption in the UK.

"MLC Economics figures show that pork consumption through all trade channels has fluctuated between 700,000t and 800,000t over the last 25 years," says BPEX marketing and consumer affairs director Richard Lowe. "So despite the fact pork consumption per capita in the UK is still some way off the level in some other EU member states, we achieved the highest per capita consumption in the UK ever last year."

The UK population last year consumed 487,000t of British pork, with Danish and Dutch production taking the lion's share of imports. A further 97,000t of British pigmeat was exported, including to important markets outside of the EU - such as demand for offal in China.

The volume of fresh and frozen pork imports has increased by 77% over the last five years, according to BPEX figures, while overall imports of pork and pork products rose by 35% between 2001 and 2005 to 858,000t.

BPEX claims that 70% of pork and pork product imports failed to meet welfare production standards mandatory in the UK in 2005, up from 66% in 2004. Such imports are often sold as supermarkets' tertiary brands, often at discounts of up to 20%, claims BPEX.

Per capita consumption reached 13.6kg in 2005 (excluding bacon and cured pigmeat), a 20-year record. That compares with 12-13.5kg per head over the last 25 years.

Data from TNS Worldpanel, for the year to 21 May, place fresh and frozen pork retail sales up by 4.3% and 1.2% in volume and value terms respectively. "Apparent from this is that there is effectively deflation of around 3% in retail prices," says Lowe.

"Observers of what is happening on the shelves of the major multiples at the meat fixture would not be surprised to see that the prevalence over the last year or so of more and more special purchase deals, especially those featuring imported boneless loin chops and steaks, is driving some volume growth into the pork >> >> category, but it is reducing net price per kg paid by consumers.

"Looking at specific cuts, boneless steaks and loins are performing much better than bone-in chops and this is a trend which has been apparent for a few years now, across all species, as more and more consumers want their meat to be convenient to cook and easy to eat off the plate."

However, Lowe says that one change noted over the last year has been a reversal in the declining popularity of roasting joints. According to the TNS data, volume sales of leg roasting joints increased by 10% year-on-year and of loin roasting joints by 19%, although shoulder joint sales fell by 6.5%. "The net effect is one of a return to the roast meat habit for many families," says Lowe.

TNS valued the British retail pork market at £675m for the year to 21 May, with additional retail sales of £99m for sausage rolls, £144m for pork pies, £452m for pork sausages, £996m for bacon and over £1bn for sliced cooked meats. "Fresh pork is only a very small proportion, in value terms, of the overall market for pig meat products," says Lowe.

On average, 37-40% of households purchase fresh pork every month, with penetration typically higher in the winter months. According to TNS, 26% of consumers purchase lamb every month, while the figure for beef stands at around 60% and, for poultry, at 66%.

Butchers benefit

Independent butchers claim 13.5% of fresh pork sales by value, grabbing a bigger share of pork roasting joint sales, "reflecting the fact that some infrequent shoppers at butchers tend to shop for weekend roasting joints there, as opposed to weekly main-meal items", says Lowe.

"MLC research has shown previously that shoppers' motivations for choosing to shop at butchers include the fact that they value the personal relationship they have with the butcher."

Almost half of respondents cited the personal touch as a motivating factor in shopping in butchers, while 39% believed the quality of pork was better than in supermarkets.

Lowe adds: "For many people, pork still has strong associations with 'proper' family meals from their childhood, with fond memories of crackling and apple sauce."

Placing pork consumers into the categories of Pork Traditionalists and Modern Pork Converts, the MLC research indicated that Traditionalists favoured roasts and chops and were not confident cooks. "This limits their sense of adventure with respect to pork and they often look elsewhere to other proteins when they seek variety or want to try something new," says Lowe.

Modern Pork Converts, however, enjoyed cooking and experimenting with cuts, from pork fillet and strips to mince.

Foodservice growth

In the foodservice sector, BPEX is claiming success on the back of its efforts to redress pork's under-performance.

"We've been constantly banging on the doors of people saying you've got to put pork on your menu," says BPEX foodservice trade manager Tony Goodger. Research by England Marketing for BPEX indicated that when eating pork out of the home, consumers look for information on the cut, style of cooking and country of origin, with local production only important to a niche group.

Further research, by consultant FMCG, suggested prime pork was winning out over processed products in the low-cost sector, largely driven by health concerns, with pork steaks and loins taking market share from bacon and sausages.

FACTS & Figures

? Total pork sales have grown 1.8% in value over the last year, or £11.2m, with volume up 4.8%

? Promotions are up 48%, with multi-buys leading the way at 123%

? Frying, grilling and roasting have seen a drop in penetration, mirroring the total market

? Mince and other cuts are on the rise

? Standard pork makes up the majority of the market, but is falling by 8.4%

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