global conference
Conference summary
What'sNewS Issue 3 May/June 2001
Zero tolerance
Day 1 - The Global Market Place,
session 1
Tricky environment
Knock-on effects
Animal welfare
Major issues
- the environmental im
pact of production.
This changes the com-
petitive landscape, with
the different products -
pork, poultry, beef and
lamb - vying for con-
sumer attention.
Against this backdrop:
- meat battles for the centre of the plate;
- meat products compete for budget share
in consumer expenditure; and
- meat can struggle to be perceived as im-
proving consumer health and nutrition.
According to the FAR study, the industry's
response must be an integration of the
food safety factor in all aspects of corpo-
rate activities throughout the chain. Com-
panies should proactively seek and invest
in appropriate business practices, produc
tion and processing technologies that miti-
gate the risk of unsafe food production.
To guarantee levels of food safety and re-
gain consumer trust, end-user markets re-
quire more interdependency between
chain members. This implies that risky or
uncommitted members will no longer be
tolerated in supply chains. Increased food
safety costs will therefore function as a
new natural selection mechanism, cutting
out those companies who cannot or will
not allocate resources to control food
safety risk.
Food health and safety were not the only
issues high on the list of challenges facing
Australia's Stanbroke Pastoral, the largest
single landowner in the world. Represent-
ing the company, Warwick Yates told the
conference that the whole industry is fac
ing a number of issues:
- operating environment;
- production systems;
- markets and marketing;
- commodity market distortions;
- environmental management;
- information management;
- research and de-
velopment;
- industry consoli-
dation/coneentra-
tion;
- food health and
safety;
- human resources;
and finally
- sustained profitability.
Yates cautioned that companies need to
respond to this long list in a positive way.
it's all about changing supply chain man
agement and our own perceptions, as well
as those of the consumer,' he argued. Over
the past decade, shifts in destination of
Australian beef products go some way to
illustrate demographic consumption pat-
terns (see also the FAR study). Growing
prosperity in the emerging markets of
South-East Asia is generating an increase
in demand. However, in spite of a compar-
atively healthy position, like all other
players, Stanbroke, a vertically integrated
operation from birth to table, still has to
counter production factors - including
weather and the envi
ronment - that are
hard to predict and
control.
Apart from these
challenges, Aus
tralian beef still has
the competition to
fight off. Yates argues
that the competition is not other beef pro-
ducing countries. Reminiscent of Coca-
Cola's discovery in the early 1990s that
Pepsi was not the real problem, but rather
the non-cola beverages people consume,
Yates said that other food groups are the
major competitors. This is confounded by
recent events in the beef industry concern-
ing food safety, which have certainly not
helped its image. So is it all bad news? Not
according to Yates. The beef industry's fu
ture could still be bright if a number of
key challenges are met, such as:
- the paradigm shift by industry players to
a branded, niche food market focus;
- discarding old commodity operating
vehicles in favour of strategies in line
with new millennium consumer de-
mands;
- recognition by the world industry that
the real competition is other food groups
and not other beef producing countries;
- the search by beef industry players across
the value chain to operate in economi-
cally and ecologically sustainable ways;
and
- the industry working together to eradi-
cate the negative image in consumer
minds, usually fuelled by non-adherence
to best management practice.
From beef to poultry, as Luiz Fernando
Furlan of Brazil's Sadia stepped up. Repre-
senting one of the world's top ten ex-
porters of poultry meat, Furlan began by
listing Highlights in 2000 for the world
chicken market. Recovery of many Asian
markets and stabilization of Russian de-
mand to pre-crisis levels topped the list.
Quoting FAO figures, world chicken pro
duction is on the increase, growing at an
annual rate of just under 5% in the last
five years. Less positive was the news that
unit prices in 2000 were down in almost
all importing re-
gions, especially the
Middle East and
Asia.
Furlan broadened
the debate by taking
the conference
through a number of
primary constraints,
trends and key questions facing the indus
try. An international conference was
clearly an ideal platform to raise ongoing
issues such as unfair trade practices in
OECD countries, continuing subsidies in
both the US and Europe for production
and export, and low purchasing power
and need for humanitarian aid in develop-
ing countries. The cost of logistics and
transportation in importing countries also
remain problematic for exporters. In
Furlan's view the major questions still to
be resolved in terms of poultry consump
tion are:
- will NAFTA open up real free trade for
agriculture?
- could OECD subsidies shift to >-
