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News and analysis on the global poultry
and animal feed industries.
topten2
on June 30, 2009

A challenging year for Europe´s top 10 poultry companies

The poultry meat industry is highly consolidated. The threat of AI and the resulting loss of consumer confidence has hit all companies.

The poultry processing industry in Europe has been hit hard by the effects of avian influenza (AI) over the last year. Consumer confidence in some countries has been severely hit and consumption has fallen, unbalancing the market.

In the spring of this year, the United Nations’ Food and Agriculture Organization (FAO) reported that poultry producers had been saddled with enormous costs due to outbreaks of the deadly AI virus strain. The World Health Organisation said that while AI remains essentially a disease of animals, the H5N1 virus has killed more than 140 people since it re-emerged in Asia in late 2003. FAO Chief of Animal Health Service, Joseph Domenech explained, “It has a huge economic impact. The cost is very, very huge.” He went on to say that the costs to the sector could not be precisely quantified because the industry varied so much throughout the world.

Several EU countries have requested subsidies from Brussels to boost consumer confidence because the industry has been hit so hard by consumer fears. FAO experts said it is difficult to forecast a recovery for poultry this year or in 2007 because the spread of the virus is so unpredictable.

However, both the FAO and the European Commission have reassured the public by saying that AI control is generally good in Europe, and has improved in Asia compared to two years ago. The situation in Africa continues to cause concern because of lack of funds there.

French companies dominant

Despite the threat from AI, the French poultry industry still remains the dominant force in Europe, with Doux leading the way.

Groupe Doux each year produces and processes more than 1.1 million tonnes (t) of birds and processed poultry products.

A major player in retail sales, the agri-food industry and food service, Doux sells its products in more than 130 countries on all five continents. The group’s major brands are Doux, Père Dodu, Frangosul, LeBon, Tio Cosme and Guts-Gold, as well as Le Janzé for free-range poultry and Label Rouge. The group and its subsidiaries are active in all segments of the poultry market: chicken, turkey, duck and guinea fowl, as well as rabbit and goat. They produce a full range from fresh and frozen items to processed products, including breaded lines, ready-meals and poultry deli products.

The company produces 2.5 million birds every day and employs more than 14,000 people around the world. It owns 23 slaughter and cutting sites, four processing facilities, 14 hatcheries and 12 food factories in France, Germany, Spain, Switzerland and Brazil. The group has 4800 partner farmers and the latest figures show that sales stand at €1.347 billion.

The number two company in France and in Europe is LDC (Lambert-Dodart-Chancereul). It saw a 13.4% rise in sales last year despite fourth quarter results hard hit by AI. Even so, fourth quarter sales rose by 9.8% to €405.9 million but the company said that this figure had been reduced by around 6% as a result of the loss of consumer confidence. Sales for the year 2004-2005 reached €1.2 billion.

The company slaughters 2.3 million chickens and 135,000 turkeys each week and has a staff of 8000 employees and co-operative workers. Earlier this year, the company announced that it would be reducing staffing by 10% due to the fall in demand.

The third largest producer and processor in France is Gastronome, part of the agri-food co-operative, Terrena. The group posted a turnover of €3.1 billion. Gastronome showed a €13.5 million operating loss, €6 million of which was attributed to the AI crisis. On the whole, with exceptional expenses, net losses reached €23.9million on a turnover of €749 million.

2006 started badly for the company, with a fall in activity due to a 15% reduction in demand during the first quarter. Since the last company re-organisation in 2002, Gastronome’s results have been in the red. From 2002 to 2005, the accumulated losses are close to €75 million. The company produces about 180,000 poultry products under a range of labels including Douce France and Gastronome. The company has 4000 workers and 474 producers.

Unicopa, part of another French poultry, pork and dairy agri-food co-operative, has a turnover of around €1.6 billion. Its poultry division sees a third of its production go to exports to 50 countries around the world. The company has 5200 employees and 18,000 co-operative members.

Italian groups keep their places

The Veronesi group’s poultry arm, AIA, produces 300,000t chicken meat and 200,000t of turkey meat each year, which is distributed fresh, frozen and as chicken- and turkey-based products. This is the leading Italian poultry producer.

The second largest poultry producer is Amadori, with a turnover of around €640 million. The company processes in excess of 200,000t poultrymeat a year from six slaughterhouses and three further processing plants. The company is an integration, with six hatcheries and five feed mills.

AI’s knock-on effects in the UK

In the UK, the Grampian Country Food Group has been feeling the effects of AI’s pressures more than some. The company was forced to close one shift at its processing plant in Anglesey, North Wales, losing 140 jobs. Labour was also reduced in Banff, Scotland. The company explained that the changes were due to recent market pressures. Although poultry consumption in the UK was hardly affected by AI, the British market attracted imports from continental European countries where consumption was hit hard, and the companies there had to re-focus their sales away from their domestic markets.

Grampian is a multi-species meat producer, with a weekly chicken production of 5600t whole birds and portions, 470t added-value products, 410t cooked chicken products and 650t chicken for other further processed foods. The company also produces 140t turkey products each week.

The second largest poultry processor in the UK, servicing the vibrant supermarket sector, is 2 Sisters Food Group. This is a privately-owned company with an annual turnover in excess of UK£350 million (€490 million). The company has seven sites, including one in the Netherlands. Each is headed by a Business Unit Director responsible for the profitable operation of their production facility. While the 2 Sisters Group is predominantly a private label manufacturer, the company also has a number of its own key brands, including Buxted and Hellmanns.

Other market leaders

Following the sale of Pingo Poultry to Plukon Royale, Nutreco’s poultry growing and processing interests now only remain in Spain. Grupo Sada is the Spanish market leader in chicken and chicken products, with broiler production units throughout the country supplying birds to Sada’s processing plants. Feed for Sada is produced by Nanta, Nutreco’s feed company. Sada markets chicken products to retailers, food service companies and food processing companies in Spain, the UK and elsewhere in Europe. Sada’s Cuk chickens are produced from specially bred, slower growing chickens that are raised on a unique diet, providing a quality product for special occasions.

The sale of Pingo to Plukon Royle, which is part of the Cebeco group, saw the Dutch-German poultry processor add to its total production capacity with plants in Wezep, Dedemsvaart and Veldhoven in the Netherlands and Doelbeln and Storkow in Germany. The group employs a total of 2400 people and has seen its turnover increase from €300 million to €500 million. The company now processes 2.7 million birds/week.

Also in Germany, Wiesenhof, part of the Wesjohann group, has more than 700 farms supplying three processing plants across the country. Turnover is around €600 million.

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