Fresh approach for Belgian meat

By Aidan Fortune

- Last updated on GMT

The Belgian pork market is looking at new opportunities for exports
The Belgian pork market is looking at new opportunities for exports

Related tags: Pig meat, Pork, Meat

The willingness to explore new markets and flexibility has helped Belgium become the seventh-biggest exporter of pig meat in the world. Aidan Fortune examines the Belgian meat market.

Think of Belgium and what springs to mind? Intrepid cartoon characters? Waffles? Top-quality chocolates? How about pork? Tintin and Snowy may come before a nice pork chop, but the Belgian meat industry is looking to change all that with a flexible approach and an ambitious outlook.

According to the Belgian Meat Office, pig meat production over the past 10 years has increased 10% with 11.9 million pigs slaughtered in 2014, compared to 11.1 million in 2005. Cattle slaughterings are also up over the same 10-year period from 460,000 in 2005 to 505,000 in 2014, while the number of calves slaughtered in 2014 was 330,000, slightly up from 320,000 in 2005. Pig meat is the nation’s success story, of course, and currently, Belgium produces more than twice the volume of pig meat than it consumes, leaving a lot available for export.

The country’s exports have grown from 670,000 tonnes (t) in 2005 to 814,000t in 2014. Despite this decade of growth, much like the rest of the world, the Belgian meat market was impacted by the Russian trade embargo, which forced producers to think quickly. As well as closing a lucrative market for its pig meat, it meant that pig fat volumes dropped from 47,000t in 2005 to 24,000t in 2014.

Diversified locations

Belgian Meat Office marketing officer Joris Coenen says it forced producers to look elsewhere to replace the Russian market – an ongoing struggle. “The closure of the Russian market has put EU meat prices seriously under pressure,” ​he says. “Also, Belgium’s producers, which account for 5% of EU pigmeat production and, structurally, export two-thirds of that, were severely affected. However, the Belgian industry was able to displace a large quantity to other overseas markets. However, this remains an ongoing challenge, as lot of (non-trade) barriers lay on the path.”

This change in the global situation means that pig meat export volumes from Belgium fell 2% year-on-year. Although a decline, Coenen believes it could have been worse. “Belgian pig meat exports fell 2% in 2014 versus the year before, actually resisting the Russian boycott well. Over the last 10 years, production grew 10% with exports growing 21%. Belgium has grown to being the world’s seventh exporter of pig meat. We export to many more countries than we did before and now Belgium is one of the big players in the world pig meat market.”

So what is the secret behind this success? Coenen believes flexibility is the answer. “Belgian pig meat has excellent product characteristics such as cutting yield and quality assurance,”​ he says. “Besides that, it comes with a high service, tailored to the customers’ needs. Thanks to that, Belgium can compete with other suppliers around the world.​”

Shifting targets

What a difference a decade can make. Back in 2005, 50% of Belgium’s exports went to Germany while 9% went to both the Netherlands and Italy. With half of its customers located in one market, the country set out to diversify and generate new export locations. 

Work on this task has paid off and over the next 10 years, it reworked its export list. In 2014, 34% of exports went to Germany, while Poland’s hit 19%. Pork exports to the UK, France and Italy fell to 4% of the total export market, with the Netherlands rising to 12%. Non-EU markets feature more, with exports to China and Hong Kong reaching 3%, the Philippines 2% and South Korea 1%.

But why have exports to Germany fallen off? According to the Belgian Meat Office, it is because it is no longer acting as a middle man between Belgium and other countries. Marketing officer Joris Coenen says: “The shift in export figures to Germany is down to jumping that country and dealing directly with Poland. With growing demand in the new member states, the trade volumes to Poland, the Czech Republic and Lithuania grew strong over the past 10 years. Outside the EU, Belgium was able to find new markets in south-east Asia and, since 2012, Australia.”Belgian Meat Office manager René Maillard adds: “We were too dependent on the German market and we now feel more comfortable with extra variety.”
Where next though? Coenen says: “Countries in south-east Asia remain target destinations for the next couple of years. Longer term, purchasing power in Africa will grow and we expect the demand to increase there as well.”

When competing with these other suppliers, Belgium has been trading with countries from within Europe and beyond. Even UK companies have been recognising the quality of Belgian meats, with Dalziel launching its own premium pork brand under an exclusive partnership with Belgium pork producer Westvlees. Glenvale Pork is available in a wide selection of cuts and trimmings for retail, catering and manufacturing butchers, and exclusively available from Dalziel’s meat depots throughout the UK.

Coenen details how important a varied list is. “Intra-EU trade certainly is the most important, with Germany and Poland together taking 53% of the total volume,”​ he says. “The Netherlands, Italy and UK complete the top five destinations for Belgian pig meat. Outside the EU, China, South Korea and the Philippines are the most important destinations.”

China, of course, is the target for many nations looking to export but recent fluctuations in the stock market have meant it is not as stable as previously thought. “The Chinese market should improve in the fourth quarter of this year, but demand struggles as the Chinese economy and currency weakens,​” says Coenen. “And, the Chinese market is not accessible by all exporters. Will it be a matter of the ‘happy few’?”

Covalis CEO Luc Verspreet says that economies of scale have meant that exporting beyond Europe isn’t the financial outlay it used to be. “It’s a big advantage we should be capitalising on. It’s currently more expensive to send produce to the south of Europe than it is to Asia, so we need to be looking at these markets and growing our presence in them.”

Belgium is also looking to the west, with Thierry Smagghe, CEO of the Belgian meat federation Febev, targeting Mexico. “The country’s pork sector has taken a hard hit due to the Russian situation, and finding alternative markets is not that straightforward, as many other pork-producing countries in Europe are after the same goal. We set our hope on Mexico, which will soon come to Europe for inspections.”

Taking on poultry

Poultry production in Belgium has been in decline over the past 10 years – from 44.7 million head in 2004 to 42.5 million in 2014. However, poultry numbers are up 10.5% to 2.1 million year-on-year. The pork industry insists it is the sector to learn from. Jos Claeys, CEO of the Westvlees Group, says the pork sector needs to innovate in the same way the poultry sector has. “The chicken market has done a great job in creating added value for its products but pig meat hasn’t done this,”​ he says. “Chicken is currently our biggest challenge to overcome and if we want to grow, we need to learn from the poultry sector and how they do this.”

Verspreet agrees with this sentiment. “Unfortunately there’s still a perception among consumers that pork isn’t as healthy as poultry,”​ he explains. “We have to work on the image of pork meat to let people know that it can be lean and an essential part of people’s shopping baskets.”

To help with this task, the Belgian Meat Office has suggested offering smaller portions to health-conscious consumers. It believes that “consumers are not always aware of the fact that pork contains essential nutrients and can fit into a healthy diet”​ and advises producers and retailers to offer up portions that can fit into “designer meals”. It also suggests simply telling consumers how healthy pork can be to make it more appealing.

Market Consolidation

The big story to come out of Belgium this year is the formal approval of the merger between Covalis and Westvlees to create the Belgian Pork Group.

First announced in April this year, the merger was designed to help the companies grow and compete at a global level, including targeting China. It is hoped the merger will make Belgian pork as well-known as other national icons.

The combined companies will slaughter over four million pigs annually and will control a third of the Belgian pork market.

Management say the Belgian Pork Group will continue to be run with the mindset of using mostly family-owned companies as suppliers, with the cooperative to be made accessible to new participants.

Westvlees CEO Jos Claeys believes the merger will help the companies compete on a global scale. “This merger will give us an enormous range of opportunities and open up the global export market. A company’s size is important when exporting and the Belgian Pork Group will give us a critical volume and help us export to new markets like China.

“The merger gives us the flexibility to cater to more customers. We’re both flexible companies but this will enable us to increase that to a larger scale.”

Covalis CEO Luc Verspreet adds: “This merger will help us play in the champions league and remain strong on the global market. We have analysed all the global markets and will be approaching each one differently, which our merger allows us to do.”

Farmers union president Peter Vanthemsche says the merger sends “a strong signal that reflects a firm belief in the sector and an innovative restructuring of the pig chain”.

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