World meat industry news

The head of the National Meat Association, Sergei Yushin, stated that the consumption of premium beef in Russia has increased by more than ten times over the past ten years.

According to Bloomberg, last year the demand for beef in the world fell sharply. The most noticeable drop occurs in countries with traditionally high consumption of this product. Meanwhile, the head of the National Meat Association, Sergei Yushin, stated that the consumption of premium beef in Russia has increased by more than ten times over the past ten years. Experts interviewed by the Prime agency explain the reasons for this phenomenon and talk about what can be expected in the meat market.

WHERE IT IS MORE EXPENSIVE, THERE IT IS CHEAPER

In general, in the world, almost in all meat markets, the trends are approximately the same, says Sergey Chernikov, Associate Professor of the Faculty of Economics of the Peoples' Friendship University of Russia. In any crisis, the beef market suffers more than others - the fact is that the cost of one kilogram of this meat is higher than that of pork or chicken.

"The global economic crisis of 2008-2013, the pandemic and, finally, the consequences of sanctions against Russia systematically reduce the real incomes of citizens around the world, which cannot but affect the composition of the food basket," explains the professor at the Department of World Economy and International Economic Relations of the State University Management Galina Sorokina.

Demand for expensive meat products - beef and lamb - is expected to fall. However, the drop in demand does not have a significant impact on the price reduction due to a serious increase in the costs of beef producers.

Therefore, many manufacturers are refocusing on more expensive segments.

“This, by the way, explains the phenomenon of demand growth in Russia. The production of premium segment beef in Russia is quite young. Previously, marbled beef was delivered from abroad, respectively, the increase in the supply of national producers significantly reduced the price in this segment, which led to an increase in demand for premium beef," says Sorokina.

At the same time, the general increase in beef prices has led to the fact that the difference between expensive and cheap products is shrinking. And this allows many to make a choice in the direction of an expensive, but better product.

Since so far there are no signs of a fundamental improvement in the economy this year, as Chernikov suggests, the downward trend in beef sales will continue. It is possible that producers will get out of the situation through the promotion of meat products with a complex composition, but a fall in prices for them, most likely, is not expected.

WHITE INSTEAD OF RED

Rising prices for beef will reorient many towards cheaper types, such as poultry meat, experts say.

As income falls, shoppers begin to replace the higher-priced product in their purchases, typically by increasing the share of chicken meat. The same is happening in Russia, Chernikov believes.

At the moment, our country abundantly covers domestic demand for chicken meat with its own production. This provides an opportunity for increased consumption of chicken at the expense of beef.

In the future, Russians will continue to buy poultry meat (the so-called "white meat") both in order to save money and as a healthy and dietary food, Tatyana Suvorova, Associate Professor of the Department of Marketing at the Faculty of Management at Synergy University, believes. In her opinion, an increase in demand for by-products is also possible.

People with a high income level and corresponding needs will buy turkey and rabbit meat. Most likely, turkey meat, which is already expensive, will rise in price again. After all, the turkey, according to the marketer, is considered a premium product, subject to the influence of market conditions.

In the "red meat" category, sales of pork are likely to increase - it is cheaper than beef, it is produced in sufficient quantities in Russia. In this regard, the expert does not expect high rates of growth in prices for this product - only within the limits of inflation. But a full-fledged replacement will not work, because they are still different types of meat, in addition, in some regions there are religious restrictions on the consumption of pork.

Another option is the development of the production of artificial meat, its substitutes from soy and even insects. A lot of noise was made by the approval by the European Union at the end of January of the use of insect meal in food production. Insects are traditionally used as food in the countries of Southeast Asia, but this is food for the poor or entertainment for tourists, Sorokina recalls.

Insect protein may well become an inexpensive alternative to meat products, but it is unlikely to be able to occupy the middle and high price segment occupied by traditional types of meat, experts believe.

In this regard, a comparison with soy meat suggests itself. Even 30 years ago, its use was also a curiosity, but today soy is used in the production of many meat substitute products. “But it never became a mass elite food,” the expert says.

However, insect protein is unlikely to compete with soybeans and will have a significant impact on demand and pricing in the meat market in the near future, Sorokina concluded.