SAMW New Year Seminar

Scottish Association of Meat Wholesalers
Seminar 12th January 2018

SAMW President Frank Ross introduced the day by saying that 2017 was a challenging year. “Brexit talks continued to progress far too slowly for our liking. hopefully a good trade deal can be arranged for both sides so that we can get on with our day job which is processing and selling top quality meat at home and abroad.

“However in order for us to do this we need more raw material. If the decline in livestock numbers is not reversed then the future of the processing sector in Scotland is in peril.

“Let's hope the powers that are in be are listening and will act quickly and decisively. Finally we continue to work hard to develop a better working relationship with FSS. Setting up the Scottish Meat Industry Forum had proved to be a big step in the right direction. We look to engage in more of a partnership approach going forward.”

First presentation was from Amanda Brown from Kantar Worldpanel.

She set the scene explaining the concerns – consumer uncertainty due to Brexit, the price of food and drink, cash for holidays. Careful consideration of how to spend their funds.

We have seen the need to spend more wisely in terms of household spend. What tends to happen is downgrading and doing without. Movement in spend from Supermarket to Discounters (inc B&M and Pound stores) all becoming more important and online.
Not much change in shopping frequency but consumers are shopping in a slightly different way. On average in 2017 there was an extra 5 trips to our annual shopping. The biggest change here is replenishment and specific journey shopping being more important.

Looking at meat shopping
Online benefiting, High Street losing spend.
All big four big multiples are losing market share over the longer term but from middle of 2017 Tesco has recovered on the meat front, in terms of their share of the meat market. More bought online but meat is only at 6%, lagging behind groceries at 7%.

M&S, Aldi and Lidl overtrade on meat, fish and poultry. Asda and Tesco undertrade considering their size.
Cooperative massively undertrading. Aldi risen from 2% to 8% but dipped over the Festive period. No surprise M&S peak over Christmas. Lidl doing well on beef, focusing on authenticity, Aldi also now have a higher share of beef, fish and poultry.

Introduction of 'Farm Brands' has impacted the major retailers sales.
50% of Tesco shoppers have bought 'Farm brands' over the last year.

Promotions have changed
Multi buys still exist –
3 for £10 is a 18% giveaway discount.
Price reductions giveaway about a third.
Meal deals give away 40%

Kantar confirmed a rise in one person households and now 45% of at-home meals are eaten alone.
We are all changing and the fastest growing single person location for consuming food is in front of a screen.
Still only spend 30 minutes making an evening meal. The less effort required the more likely to eat it. Assembled dishes now 52%, Meat & Veg 48%. This has reversed since last year.

Convenience is growing (10%), assembled growing, cooking own down 25%

Kantar said that the statistics reveal a need to encourage more meals including lamb and pork. Waitrose lead on menu cards, all others have followed.

Health inspired expenditure – £23bn market
Health reasons is now more about natural and unprocessed. Rise in non meat eating days. Talk of protein on social media helps meat sales.

Data specifically covering 12 weeks up to 31 December
£1bn more spent in comparison with 2016. Inflation part of the cause.
Aldi and Lidl strong sales, Sainsbury done well in Scotland, Tesco had a good Christmas.
Fresh turkeys and mince pies strong growth, Own label good sales
Only Co-op did not grow sales at Christmas.
Fresh Meat up 3.5% value, volume up 1%, Pork strongest.

Second presentation was from Alan Clarke, Chief Executive, QMS
You can listen to this presentation while you read this, by clicking on the icon. The following notes might be more understandable when you hear how AC delivered this.

He said that he had gone from cake to steak but he explained his work experience which included retail in Northern Ireland.
Five years as director of Lifelong Learning UK.
Learning curve at Scottish Bakers now same feeling at QMS.

When he joined Scottish Bakers as Chief Exec, the media was all about chefs. Now focus is on bakers because bakery sector has changed. Bakery companies who follow the trends are the ones having record years. Ones who do what they have always done, are struggling and going backwards.

QMS has a unique footprint.
AC observed industry talks itself down. In public we must have everybody in the sector talking it up. Need to have sectors working together.
External role – AC attended everything that he has been invited to, spoke where invited to and found that very useful in learning about the sector.
Internal role – Marketing and Quality Assurance Standard Setting – whole of chain. Also a membership organisation – more than 10000 pay to be members.
Why do you buy IRISH beef?
AC said that QMS needs to take the awareness of Scotch Beef, which is high, and trigger action.
Tastings will continue in supermarkets.
Sponsor Observer best Sunday lunch.

Need to ensure that farmers are profitable.
Economic services
Brexit Report and insight
Education and communication
Engage children with their heroes e.g. Rebecca Anderton to combat negatives.

Thoughts to date

QMS are “Custodians of the Scotch Brand”
Scotch Beef PGI, Scotch Lamb PGI and Specially Selected Scottish Pork.
Strategy to shape a sustainable and prospering Scottish Red Meat Industry. AC stressed QMS is a business support organisation.

Departments at QMS will change to better address its strategy. AC suggests changing the overall strategy adding two words – professional and sustainable.

“Our mission is to deliver a range of activities to support the development of sustainable, professional, profitable and resilient Scottish red meat industry. We will promote and protect the Scotch Beef and Scotch Lamb PGI and Specially Selected Pork brands through cleat effective communication where future customers fully understand what sets those brands apart.

“People say that we are are NDGB (Non departmental government body) but I say that we are a business support organisation. If we don't support you to do what you do well there is no point of us getting out of bed on the morning. That is the change that we are looking at internally.”

AC said that there were four key pillars to take on board.
1 Continue to build our brands.
2 Support sustainable growth.
3 Develop capability and capacity within the sector.
4 Deliver professional services to support.

The new Chief Executive claimed that all his staff had addressed each of the strategic aims and developing strategic objectives and implementation plans. His senior team has worked in partnership with the board and it has been a very different process from that done on previous years.

Structure follows strategy claimed AC. The six current departments will change by merging Marketing and Communications under Carol McLaren. There will be a new department called Strategic Engagement headed up by Laurent Vernet as director beginning in February 2018.

The purpose of the restructure is to make sure that QMS is engaging with all of their footprint and managing that engagement and strengthen their marketing capabilities through the synergies of bringing marketing and comms together. That positions QMS to provide strong support for the sector.

Allan Clarke discussed the unique selling point of QMS, how it is articulated, how to get customers to buy into it. QMS will consider a feasibility study on brand strengthening. A specialist organisation will be brought in to see what QMS can do, what have they already got and how can it be used. QMS will look at DNA testing said AC.

The future? How can QMS get the best value return for stakeholders money? How can QMS assist to sell more Scotch product and further develop our stakeholder partnerships. Those are key to QMS.

AC believes that it is crucial that they get other people to say you are good. “We need to talk this industry up and every part of this industry talking it up. It is not just what you say it's how you say it.”

Jim McLaren and Alan McNaughton are standing down from QMS board.

Ian Anderson asked, since QMS is not a lobbying body how can QMS help encourage more cattle to be produced? Alan Clarke replied that QMS is an advisory organisation with a conduit to government.

Attachments:

• ALAN_CLARKE_120118.MP3