Meat supply industry Review For The Republic of Ireland

1 Market / Sector Overview

• Market Definition

Meat supply industry is one of the most important industries in the Republic of Ireland within the Food and Drink Industry. It contributes significantly to the economy of Ireland. The slaughterhouse is the facility where animal killing takes place for consumption as food products. There are a large number of slaughterhouses in the country. The organic meat market in Europe including the meat supply (slaughterhouse) is regarded as the consumer revolution (Meat Industry Ireland Submission to The Department of Enterprise, Trade & Employment 2012).

• Market size Leading Competitors / Market Segmentation / Market Share

The production of beef remains the dominant enterprise on majority of the farms in Ireland. 100000 Irish meat farms have beef enterprise with 68000 specifically involved in specialist beef production. The meat processing and supply industry has been transformed from a business of frozen commodity in the early 2000’s to a key fresh food supplier across Europe. Beef slaughtering contributes to 10% of overall Irish beef production. The meat supply market is segmented into meat production, meat processing, market logistics and retail. The retail segment includes food service, butcher and chain retailer. Fresh meat is supplied to major supermarket chains and butcher shops (Meat Industry Ireland Submission to The Department of Enterprise, Trade & Employment 2012).
There are 30 major slaughtering facilities that are supervised by DAFF and 220 low-volume slaughterhouses that are authorized by the Local Authority Veterinary Service. The major players in the market are Dublin Meat Company, Irish Country Meats, Dawn Meats, and so on. The meat industry has the capacity to make the slaughter 3 to 3.5 million animals on an annual basis while the range of slaughtering is only 1.5 to 2 million (Meat Industry Ireland Submission to The Department of Enterprise, Trade & Employment 2012).

PESTEL Analysis

2.1 Political: There is recognition to the benefits of the multilateral trading system through World Trade Organization. The introduction of the decoupled Single Payment Scheme (SPS) is the example of support of European Union at the political level (Meat Industry Ireland Submission to The Department of Enterprise, Trade & Employment 2012).
2.2 Economic: In recent years, Ireland meat industry has seen some significant fluctuations in the commodity prices. The economy of the world is evolving from the severe turmoil done due to the recession, beef and other types of meat have seen fluctuations in the prices. The medium term prospects of the agricultural commodities are promising in the global market. With improvement in the living standards of Irish people and change in the dietary patterns, there is increased food demand not only in the country but also at the global level. However, considering the economic viability, only one fifth of the total meat farms specifically the beef sector is viable. Beef margin is the low margin business (The Irish Beef Processing Industry 2012).
2.3 Social: Considering the demographics, the major portion of meat production activity takes place in the Midland, Border and Western Region. The average farm size for all the farms is 32.3 hectares. Considering the age profile of meat slaughters in Ireland, 6.9% of farmers are under the age of 35, while 24.8% are in the age bracket of 65 years and more. There is requirement of young meat farmers as the industry seems to be unattractive to the younger people (The Irish Beef Processing Industry 2012).
2.4 Technological: There are technological issues related to the sector, as there is need for fostering the transfer of knowledge and adoption of technology on a widespread level. Implementing technological innovation in the field of meat supplying, such as inclusion of RFID, requires the cooperation of all the stakeholders in the industry ranging from primary producers to wholesalers, retailers and consumers.
2.5 Environmental: Ireland has supported the major goals that are agreed by the Heads of State and Government at the 2007 Spring European Council and the European Union Package on Climate Changes and Energy Security that was agreed in 2009. All these targets set at regular intervals create difficulties for the agricultural sector of Ireland which is directed related to the meat supply industry. Emissions from this sector constitute a large proportion of the overall emissions. The use of RFID technology in meat supply chain present environmental concerns as the level of technological difficulty is high due to its extension to live animals (Costa, Antonucci, Pallottino, Aguzzi, Sarria & Menesatti 2012).
Legal: Quality of meat and safety of public is the major public concern owing to which the legislation of EU is progressively imposing the development of a suitable technology of monitoring meat products and their evaluation that indicates possible use of RFID traceability in the Irish meat industry (Costa et al 2012).

Porter’s Five Forces Analysis

3.1 Bargaining power of suppliers: The sector is fragmented for red meat and there is presence of a large number of independent producers that bring their product to the market through independent intermediaries, such as slaughterhouses. Considering the production of pig-meat, there are a few numbers of suppliers. On an average basis, the bargaining power of suppliers is average.
3.2 Bargaining power of buyers: It is high because there is an increase in the trend of organic fresh meat and customers are demanding far better eating quality that is combined with RFID traceability and organic certification (Costa et al 2012).
3.3 Barriers to entry: Meat retailers in Ireland pass the excessive risk and unexpected costs burden onto their suppliers which depress the ability of supplier to innovate, invest, export or improve the efficiency. This acts as one of the major significant barriers in the entry of suppliers in the market (The Gap between Producer Prices and the Prices Paid by the Consumer 2007).
3.4 Availability of substitute products: There is availability of substitutes within the meat industry itself. For instance, beef can be substituted for pig meat. It increases the level of competition among industry players (The Gap between Producer Prices and the Prices Paid by the Consumer 2007).
3.5 Rivalry among existing firms: The rivalry among existing firms is high. Due to demand of quality meat in the meat supply industry, the competition is tough, as companies have to maintain their profits with no compromise on quality of meat (The Irish Beef Processing Industry 2012).

Clonmore Meats – Wholesale

Clonmore Meats is one of the wholesalers of meat supply in Carlow, Ireland. It supplies the best of Irish meat at various prices. It has dedication to excellent customer service and the meat it supplies ranges from beef to pig meat. They are meat processors with activities of processing and preserving the meat. It is the service provider of beef and veal, both processed and preserved. It is the producer of mutton and lamb, in the frozen state. The total number of employees is 10 (Clonmore Meats 2013).

SWOT analysis

Strength: The slaughterhouse is involved in supplying the quality meat. As the competition is based on level of quality maintained in the industry, the company is strong in its activities related to preserving and processing the meat. Range in activities of Clonmore Meats is the other strength of the company. Availability of frozen meat, processed and preserved activities are other strength of the company.
Weakness: There is limited number of employees in the company due to which the capacity of the company in terms of processing the meat is low. It is a local slaughterhouse and lacks experience in operating at large scale.
Opportunity: Due to increase in demand for better eating quality meat and rise in awareness for traceability in the meat and organic certification, there is opportunity for the company to extend its area of supply as it processes quality meat and RFID traceability can further certify the freshness and organic content of the meat supply. The increase in the demand for healthier as well as safer food has developed because of scarcity of food in the European Union.
Threats: There is threat from producers of lower cost and lower scale of production. There are various players in the market of meat supply such as Dublin Meat Company, Irish Country Meats, and so on (Clonmore Meats 2013).

Summary and Conclusion

The meat supply industry is very competitive with presence of large number of suppliers in Ireland. There is continuous growth in the Irish organic market. As it is one of the major industries in Ireland, it contributes to the economy of the country. The environment of the country is also suitable for the development of RFID traceability in the organic meat supply so that the health and safety of the consumers can be taken care of (Costa et al 2012). The technology is required to be upgraded by inclusion of RFID traceability and maintaining the freshness of the processed food. The economic and the social environment is also favourable. Owing to the availability of the large number of suppliers in the market, it is necessary to maintain the focus on the quality of the meat supply. Due to the competition in the overall meat supply market, introduction of RFID traceability can help in checking the freshness of the meat. Clonmore Meats is one of the wholesalers in the meat supply industry. The services of the company make it suitable to take the advantage of RFID traceability as it processes quality meat and supplies it.

References

Clonmore Meats. 2013. [Online].
Meat Industry Ireland Submission to The Department of Enterprise, Trade & Employment. 2012. [Online]. Available at: http://www.djei.ie/commerce/competition/submissions/MeatIndustryIreland.pdf [Accessed on: 16 January 2014].
The Gap between Producer Prices and the Prices Paid by the Consumer. 2007. [Online]. Available at: http://www.ceasc.com/Images/Content/2326%20Report.pdf [Accessed on: 16 January 2014].
Costa, C., Antonucci, F., Pallottino, F., Aguzzi, J., Sarria, D. & Menesatti, P. 2012. A Review on Agri-food Supply Chain Traceability by Means of RFID Technology. Food Bioprocess Technol, 5(5).
The Irish Beef Processing Industry. 2012. [Online]. Available at: http://www.ceasc.com/Images/Content/2326%20Report.pdf [Accessed on: 16 January 2014].