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Major lift in Danish organic chicken sales prompts investment

By Gerard O’Dwyer, in Helsinki , 17-Mar-2015

The Danish government and retailers are promoting organic foods strongly
The Danish government and retailers are promoting organic foods strongly

New domestic and foreign suppliers are entering the growing organic meat sector in Denmark, encouraged by its long-term prospects, strong consumer demand and government backing.

Growth in both production and sales of organic chicken has been particularly impressive in Denmark since 2010, achieving a 26% increase in 2014. Organic chicken is now the fastest growth sector within Denmark’s chicken meat segment, a market where production of non-organic poultry meats has declined from 175,000 tonnes (t) in 2008 to below 168,000t in 2014, according to Danish Poultry Council (Det Danske Fjerkræraad) figures.

The Council is forecasting rapid growth for the country’s organic chicken sector, up to 2020. It estimated that the market for organic chicken products would increase from its current position of 1% to close to 12% of all chicken meat sold by 2024. One ground for optimism is the Danish government’s support for organic food production through capital grants for stock, equipment and staff training. The government also plans to create compulsory cooperation between municipalities, regional authorities and ministries to further organic farming, in particular organic meat production.

Growth in the organic chicken sector is reflected in the number of so-called registered and validated organic poultry farms in Denmark. This number has increased from six in 2008 to more than 22 in 2014. The Danish poultry sector produced around 173,000t of chicken meat in 2014, of which 17,300 tonnes was sold under the organic label.

Major players in the marketplace, including Finland meat manufacturer HKScan, are planning new meat processing-related capital investments for organic chicken production; the company’s sales of organic chicken in Denmark increased by about 32% in 2014.

Sales of organic chicken meat have "exploded", said Anders Olsen, sales director at HKScan Denmark. HKScan will need to bolster volume on the farm supply side and increase its capacity to respond to projected significant consumer demand, he said. "We see a clear trend among consumers who have an increased focus on quality and animal welfare.

"Consumers are, to a much greater extent than before, willing to pay more for higher-quality foods. The Danish government and retailers are also promoting organic foods strongly. We are currently slaughtering around 15,000 organic chickens a week. We expect this to rise by 30% this year compared to 2014," said Olsen.

HKScan became Denmark’s biggest poultry meat producer in September 2010, when it acquired Rose Poultry A/S from vendors Vinderup Poultry A/S, Skovsgaard Fjerkræslagteri A/S and Hedegaard A/S, in a cash and shares deal valued at €23.9 million.

The Finnish company expanded into the free-range chicken segment in 2011-2012, selling its product range under the Rose Nordisk Organic Chicken (Økologisk Kylling) brand.

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