2nd LSIRD Conference on Livestock production in the European LFAs, Bray, Ireland. Dec '98


Fulfilment of consumer expectations and consumption behaviour with meat produced under agri-environmental schemes

GEROLD RAHMANN

Dept. of International Animal Husbandry

University of Kassel, Germany


  1. Introduction

In Germany, sheep, cattle and goats are used for biotope conservation under agri-environmental schemes. These animals produce meat. The production yield of the animals is low, the meat quality worse compared to conventional fattening. On the market it competes with this meat from intensive farming. The marketing strategy and the promotion of meat produced while biotope grazing is different to conventional marketing, even to organic farming. In the EQULFA project, the, the possibilities and limitations of meat produced under agri-environmental schemes to fulfil consumer expectations and considering the consumption behaviour are examind. For the analysis, biotope grazing measures by animals have been chosen which use "added values" for the marketing strategy. "added values" are biotope conservation, rare breeds, traditional farming, organic farming. Therefore the markets of lamb from Rhön sheep ("Rhön lamb"), beef from Fleckvieh steers sold under the label of "Rhöner Weideochsen" and kid meat are taken for the evaluation. Goal of this work was, to analyse the target groups of consumers for successful marketing of biotope conservation products with "added values" and to calculate the market potential for these products in the Biosphere Reserve Rhön.

  1. Material and methods

Consumer expectations and their consumption behaviour are evaluated through an survey at chosen locations in and close to the Biosphere Reserve Rhön. Alltogether, 480 people were interviewed using a common formal questionnaire in November and December 1997. Problems in distribution and marketing of meat produced under agri-environmental schemes was analysed by product stream evaluations (PSE) of the chosen products lamb from Rhön sheep, beef from "Rhöner Weideochsen" and kid meat. Additionally, about 52 animal holders, who produce meat under agri-environmental schemes have been interviewed. They were evaluated in their problems to fulfil the consumer expectations and to meet the consumption behaviour.

  1. Consumers expectations to meat produced under agri-environmental schemes
  2. Consumption behaviour

Meat mostly consumed in Germany is pork , followed by beef and poultry. Lamb and kid meat has a low preference and is not consumed very often (1,2% of the total meat). Table 1: Meat consumption pattern in Germany (in kg/capita and year)

meat total

pork

beef

poultry

lamb

kid

1992

93.7

54.5

19.2

12.5

0.7

< 0.01

1993

95.3

56.1

19.7

12.4

0.7

< 0.01

1994

93.0

55.5

17.5

12.8

0.7

< 0.01

1995

91.7

54.9

16.5

13.3

0.7

< 0.01

1996

90.5

54.0

13.0

13.9

0.8

< 0.01

1997

89.5

54.0

11.5

14.5

1.0

< 0.01

Source: compiled by the statistical figure of ZMP, annual editions from 1993 to 1998, Agricultural report of the Federal Government, 1998

In the consumer survey, most people said that they consume pork weekly and beef monthly. Lamb and kid meat is not consumed regularly but on special occasions like holidays, religious festivals (e.g. Easter) or family celebrations. Are seen as special dishes, as is all meat from the agri-environmental schemes. Kid meat is the less prefered meat. At Easter there is slightly more demand. About 35% of the interviewed people mentioned that they have never and would never eat kid meat. If it is eaten, it is recognized as special dish.

Figure 1: Average consumption pattern for meat of different animals

Socio-economic differences are measurable for special dishes. For example, prosperous and/or urban people consume special dishes more often than less prosperous and/or people from rural areas. Men prefer beef more than women, women lamb more than men. West-Germans like lamb more than East-Germans. When special dishes are not consumed, it is because of the high price. Tourists are less reluctant than indigenous people. Because it is seen as more typical and special, lamb from Rhön sheep is prefered more by tourists than beef from "Rhöner Weideochsen". Beef from "Rhöner Weideochsen" is prefered more in the adjacent cities of the Biosphere Reserve Rhön. It is perceived as a healthy product of an environmently and animal-friendly production system.


Figure 2: Occasions when meat produced under agri-environmental schemes is consumed

  1. Consumer expectations

Tourists are the most important target group for marketing and promotion of meat from agri-environmental schemes in the Biosphere Reserve Rhön (RAHMANN, 1997). They determine the expectations of these products. The "added values" of animal systems on agri-environmental schemes for biotope conservation are very important for many tourists. The difference between the socio-economic groups are minor. It does not matter, if man or woman, town or rural people, West- or East-German, prosperous or less prosperous people, all have high expectations on product quality and high demand on production pattern. In the following order, no use of hormones and antibiotics, fresh and not frozen, tenderness, less fat and low cholesterol and good colour is expected for high meat quality. Following "added values" are important for the consumers (in given order): animal welfare, environmentally-friendly production, regional distinctiveness, biotope conservation, rare breeds and at least tradition. There were significant socio-economic differences in the importance of the price for purchasing meat (Figure 3).


Figure 3: How important is the price, when meat is bought? (n=480)

  1. Problems to fulfil consumer expectations with meat produced under agri-environmental schemes
  2. Lamb

In Germany, biotope conservation is mostly done by sheep grazing. Under agri-environmental schemes shepherds are forced to keep rare breeds. From birth in January/February till slaughtering in autumn the lambs remain with the mother. Because no concentrates are fed, the daily weight gain of the lambs is low. Compared to ordinary sheep keeping, only 60% to 80% of weight gain is achieved, when biotope grazing is carried out (approximately 250 to 300 g/day, RAHMANN, 1998). Particularly the abbatoirs want a lamb of about 45 kg, but during biotope grazing even high performance breeds reach only 35 kg by autumn. Rare breeds have even less growth performance than modern breeds and are assessed in EUROP-classification even lower (e.g. R to O). Shepherds complain about this, because 0,06 to 0,21 DM per lamb and grazing day is lost due to sub-optimal growth rates. This depends on breed, marketing pattern and season.

If seasonal breeds are used for biotope grazing, it is difficult to supply lamb throughout the year. This can create marketing problems, particularly when a special target group of consumers demands the product out of season. For example, lambs are best for slaughtering in autumn. Tourists, however, are an important consumer group visiting the Biosphere Reserve Rhön in the summer season.

An other problem occurs with the rare breed premium. If the numbers of animals of rare breeds increase above a specific number (10.000 ewes), they lose this premium. That is recently the case with Rhön sheep, the number of ewes increased from 3.000 ewes in 1986 to 13.000 in 1997.

Apart from that, lamb from New Zealand has a better conformation and is cheaper than German lamb. That means that lamb produced under agri-environmental schemes and particularly rare breeds have disadvantages in competition to concentrate fed high performance breeds. Even best German lambs of modern breeds have difficulties to be competitive with lamb from other countries. To be competitive, "added values" have to be used for successful marketing of lamb from rare breeds and extensively fattened animals.

In the marketing cooperative "From the Rhön - For the Rhön" the consumer perceptions of the Rhön sheep is used for marketing lamb with "added values". Because German consumers like lamb as a special dish for special occasions, market channels for home consumption like supermarkets and butchers are not suitable for marketing "Rhön lamb" with "added values". However, tourists pay the most attention to "added values" for products with regional distinctiveness and are even willing to pay for "added values". Therefore, restaurants are the best marketing channel for successful marketing of lamb. In cooperation between restaurants and shepherds, the "added values" rare and indigenous breed (Rhön sheep), traditional husbandry (herding), landscape protection (biotope grazing) and animal welfare, are used for marketing. With this promotion, the "Rhön lamb" has become - with increasing attention - a special dish for tourists in the Biosphere Reserve Rhön. Despite the fact, it is about double of the price compared to other lamb, the demand of 2.000 Rhön lambs per year cannot be fulfilled by the supply of 600 Rhön lambs p.a.. In the cooperative the intermediate trade is reduced to the minimum. The shepherds sell self-slaughtered "Rhön lamb" to restaurants, which serve them to final consumers.

  1. Beef

Cattle grazing for biotope conservation is done with suckler cows, fattening bulls and young stock of dairy cow herds. Dairy cows are not usable for agri-environmental schemes. Calves from suckler cows are slaughtered at an age of 10 months and is market as "baby beef", or are fattened like beef cattle to an age of 18 to 20 months. Young stock at an age of one and two years are kept for replacement of cows on dairy farms. For extensive grazing systems, low and medium growing breeds are preferable, because they grow well even without concentrate feeds and/or they can be long time of the year outside. Particularly the hardy breeds like Galloway and Highland are good for extensive and low-input suckler cow keeping. Nevertheless, with 600 to 800 g the daily weight gain of these British hardy cattle is low. Since the BSE-crisis, the consumer perception of "healthy meat" from these breeds is lost and with that the possibility for using it as an "added value".The consumption of beef has decreased in Germany by this disease. After the BSE crisis, non-British or indigenous breeds are preferably used for extensive grazing. In the Rhön this are the double purpose (milk and beef) Fleckvieh cattle. To prevent lower EUROP-classification when extensive grazing is done the bulls are castrated. The castration improves the EUROP classification compared to un-castrated bulls (e.g. from R2 to U2). While biotope grazing, the disadvantage of oxen in higher fodder needs per kg weight gain is less important than for intensive fattening systems, because roughage is cheap and does not determine the production costs. The marbeling of the beef of steers under extensive grazing is better than un-castrated bulls. Therefore, steers have an advantage in beef quality and the fodder costs are not important as for intensive beef cattle keeping.

An analysis of marketing channels for beef with "added values" was done with the LEADER II project "Rhöner Weideochsen". The Fleckvieh-cattle (Simmental-cattle) breed is typical for the Rhön and they have a deep impact on the landscape of the Hessian and Bavarian Rhön. Historically, extensive oxen fattening was carried out on marginal land. With the structural changes in beef cattle keeping (today: intensive indoor fattening), oxen keeping is abandoned. Additionally many of the pastures became endangered biotopes due to disuse. The "Rhöner Weideochsen" project wants to re-introduce oxen fattening on marginal land.

In Germany, origin and transparancy in production has become an important aspect in the marketing of beef. This is a fulfilled in the "Rhöner Weideochsen" project. Additionally, environmentally-friendly production (organic farming on 2092/91 and extensive grazing under 2078/92), animal welfare (out-door keeping), regional distinctiveness (Rhön) and tradition are used as "added values" in marketing. Because beef is regularly consumed at home, marketing channels as in butcher shops are used for promoting and distribution, just as restaurants in and out of the Rhön. On the behalf of the farmer and butcher, the oxen are slaughtered at an age of 24 months at the abbatoir in Fulda. The EUROP-classification of the carcass is done here. The butcher pays about 30% more than the normal price to the farmer, but he has the exclusive right of marketing with "Rhöner Weideochsen", which is a registered and certified label. The carcass hangs for about 21 days and is processed as specialities. the better parts are sold to restaurants. The butcher is making sausages of the remains for his own butcher's shop. All of them use the mentioned "added values" for marketing.

Home consumption has the highest importance as a marketing channel, restaurants are second. For home consumption sausages are favoured, in restaurants special dishes of beef. These products are available throughout the year, seasonality is not given. Because it is sold for home consumption, the touristic season is less important for marketing compared to lamb. From the Biosphere Reserve Rhön it can be successfully sold with the use of the image of the Rhön as an "added value". "Rhön lamb" is therefore limited for marketing in the Biosphere Reserve Rhön, because it is prefered as special dish while on holiday.

  1. Kid meat

Usually, kid meat is a complementary product of goat milk production. When goats are used for biotope grazing, it becomes the main product, because milking is not appropiate due to high labour input and low milk yield of the animals. For biotope grazing, fences are used for keeping small flocks of goats and the production pattern is comparable to sheep keeping. Their browsing behaviour is used for shrub clearance. The kids are with the mother but are slaughtered at a young age of two to six months, because a carcass weights about 5 to 15 kg is prefered. Therefore, low weight gain while biotope grazing is less of a problem than for lamb production. Mother goats with a medium milk yield are preferable for biotope grazing and early weaning of kids to avoid udder problems.

Kid meat has a low preference for German consumers. No regular market exists. The informal market channels are difficult for marketing. Many consumers have no access to kid meat. Moslems are the major consumer group but they do not pay attention to "added values". There is only very little advertising and promoting of kid meat in Germany. Just a few butcher shops and restaurants - mainly located in big cities with Moslem population - offer kid meat. The production level in Germany is very low (estimated 5.000 tons), about 50% of self-sufficiency. The imported kid meat comes from Greece, Spain, Italy and France. Therefore, kid meat is a product for occasional marketing. In the Biosphere Reserve Rhön there are just 500 mother goats. They can deliver approximately three tons of kid meat per year. Added value can be used for marketing of goats like for lamb from Rhön sheep. In the past, there was a local breed of the Rhön goat, which is now extinct. In Thuringia there is still a little population of the endangered Thuringia Forest goat. Extraordinary meat qualities like low fat, diet valuable composition of fatty acid, low colesterol and probably the CLA (conjugated Linoleic Acid) as an anti-carcinogenic component can be used for promoting kid meat. Last but not least, the environmentally-friendly production pattern and the very special dish is a potential for marketing which can be used as "added values". This is recently not done. A small consumer group is already paying good prices for kid meat. About 16 DM per kg carcass is possible but rarely more than 10 kg is bought. With "added values" only little more money can be achieved. The attraction of new consumer groups has to be the target of extending the marketing of kid meat.

  1. Market potential for meat produced under agri-environmental schemes

As it was investigated in the final consumer survey, that many of the 480 interviewed persons would like to consume meat from agri environmental schemes and many of them would pay for "added values" (Figure 5). In reality, the demand for meat from agri-environmetnal schemes is small and the will for additional payment less, as market potential and maximum prices show. Many consumers argue that the access to the product must be easy and not take more time than ordinary shopping. They are willing to pay more, when they can trust the "added values" of the product and it must be attractive in presentation and preparation. Recently, this has been fulfilled in butcher shops and in restaurants. Supermarkets do not fulfil these expectations. The consumption of special dishes is prefered in restaurants. They trust the product and the processing is done properly. Many consumers are not able to prepare good special dishes and they do not know what the products are and what to do with them, ready meat as pre-prepared food is becoming more interest to consumers. Lack in experience in taste, processing and availability of products from agri-environmental schemes limits the consumption. Butcher's shops rarely offer these products and do not like advising consumers on preparating the product.


Figure 4: Clients in restaurants of the marketing co-operation "From the Rhön - For the Rhön" (perceptions of the restaurant owners 1997)

The expectations, the consumption behaviour and payment for "added values" is restricted by market channels. These market channels are less developed. Trust and knowledge is missing for consumers. Only restaurants and special shops are appreciated for special products, like meat produced under agri-environmental schemes. There they are willing to pay more for "added values" but it is only done occasionally. A successful marketing of meat with "added values" must done for special target groups as a niche market, mass consumption is not possible. Vertical cooperations between farmers and intermediate trade is valuable for successful marketing with added values. Transparancy of production pattern and connection between producer and consumer are most important for fulfilment of consumers expectations and exploiting the willingness of additional payment for "added values".


5: How much more would you pay for meat produced under an agri-environmental scheme?

Even when there is a link between producer and consumer and all expectations are fulfiled, there are limits in market potential. For the farmers as producers of meat under agri-environmental schemes the limits are the production capacity, due to the numbers of animals (e.g. rare breeds) and restricted production pattern (stock density) and for the consumer the consumption capacity as a function of the individual behaviour.

"Rhön lamb" is mainly marketed to tourists visiting the Biosphere Reserve Rhön. It is mostly offered in restaurants with high tourist interest. This is mainly in the summer season. The image as a special dish is specific for "Rhön lamb". Other meat products using the Biosphere Reserve Rhön for labeling have difficulty in competition to "Rhön lamb", because it is not typical and not special enough. Beef of the "Rhöner Weideochsen" has no cultural obstacles and consumption rejections in the consumer's mind. The marketing can be done in butcher's shops, for home consumption (sausages) and from of the Biosphere Reserve Rhön, in adjacent cities (in restaurants). The image of the Biosphere Reserve Rhön is used as a label. Competition for "Rhön lamb" is less.

The use of "added values" from the Biosphere Reserve Rhön faces the problem of "the competition of the regions". For example, besides "Rhöner Weideochsen", beef with regional distinctiveness from Vogelsberg, Knüll and Spessart is promoted and marketed in the city of Fulda.

There is no market for kid meat as for lamb or beef. Only a few consumers like kid meat and butcher shops and restaurants reject the marketing and promotion of kid meat. Kid meat is mostly on-farm sold to final consumers, as there is only a small market. Like the promotion of lamb from the Rhön sheep, "added values" could be used to have success in marketing. The marketing of meat with "added values" has not only an advantage for the farmers but also for the intermediate trade. In the market channel analysis the average prices of best parts of lamb have been compared between the marketing with and without "added values" (Table 2).
Table 2: Selling prices per kg lamb4 from Rhön sheep on market levels with and without "added values"

without "added value"3

with "added values"

additional turnover

through "added values"

DM % DM % DM %
sheep keeper 5,25 100 8.80 100 +3,55 +68%
animal wholesaler 5,90 112 9.401 107 +3,50 +59%
abbatoir 6,10 116 9.801 111 +3,70 +61%
supermarkets 6,002 114 11.901 135 +5,90 +98%
butcher 9,001 171 14.601 166 +5,60 +62%
restaurants 7,90 150 15.20 173 +7,30 +92%

Remarks:

1: rarely practiced

2: special offers from New Zealand

3: "Added values" are: rare breed "Rhönschaf", traditional keeping (herding), landscape conservation (biotope grazing), animal welfare

4: For the calculations only best parts of the carcass (69% of the total carcass) are taken into consideration.

The consumption yield of beef, lamb and kid meat consumed in the Biosphere Reserve Rhön was estimated in Table 3. The tourists are important consumers in the Biosphere Reserve Rhön, but their contribution to the total consumption is just 7,1% for beef, 14,9 for lamb and 4,5% for kid lamb. The tourists are a group of consumers for special dishes. It has nevertheless limits in market capacities. Recently, 600 "Rhön lambs" were marketed with "added values", the demand was 2.000. If all lambs reared in the Biosphere Reserve (estimated 9.000 per year) should be marketed with "added values", other target groups of consumers have to be found. Table 3: Estimated production and consumption yield for meat in the Biosphere Reserve Rhön

unit beef lamb kid
consumption
indigenous consumption6 kg/year (1.000 kg) 1.856 86 3,00
tourist consumption1 kg/year (1.000 kg)1 142 15 0,14
total consumption in the Rhön kg/year (1.000 kg) 1.998 101 3,14
production
meat produced in the BR Rhön kg/year (1.000 kg) 8.182 217 5,00
production minus consumption kg/year (1.000 kg) +6.193 +116 +1,86
surplus to local consumption % 75% 53% 37%
numbers of animals2 number of animals 27.2703 10.8704 5005
animal numbers above local needs numbers of animals 20,613 5.800 186

remarks:

1: Tourist consumption: 2 Mio. visitor-days per year. Consumption yield of tourists: average consumption per capita, divided by 365 days and multiplied with a special "holiday" factor: 2 for beef, 4 for lamb and 1 for kid meat. The consumption per tourist was multiplied with the total visitor-days.

2: Sources for animal numbers: HOFMANN (1994), GREBE/BAUERNSCHMIDT (1995) and statistical datas of the regional agricultural offices.

3: For beef are bulls, female fattening cattle and cow replacements are recognized. About 300 kg carcass weight was taken for production yield of beef.

4: For the numbers of sheep in Thuringia the numbers of ewe premium from 1995/96 have been considered. About 20 kg lamb (carcass) per ewe and year have been considered.

5: Goats are estimated by EQULFA project. Per year and mother goat are 10 kg kid meat estimated.

6: About 122.000 people live in the Rhön. Average rural consumption in Germany: beef 13,00, lamb 0,70 and kid meat 0,025 kg/capita and year.

Source: calculations RAHMANN

Table 3 shows that for all meat an overproduction in the Bioshere Reserve Rhön is given. An export out of the region is necessary. This has to be done in more urban areas, where a underproduction exists. The need of connection between urban and rural (particularly less favoured areas), between production and consumption areas is observable. Regional rural development is difficult without the attention to (adjacent) urban areas.

  1. Conclusions

Special target groups pay attention to meat produced environmentally friendly, like biotope grazing, which is done in agri-environmental schemes. The marketing of these products needs special emphasis to obtain a comparable income like ordinary farming. In the marketing strategy, "added values" are used to attract these consumers and show differences to intensively fattened or imported meat. The following "added values" are used for marketing of meat produced under agri-environmental schemes:

Which "added values" are used for marketing depends on the target consumer groups. The perception and conception of consumers are wide spread. It is necessary to evaluate the target groups of consumers, who pay the most attention to the offered products and who are willing to pay more for "added values". In the Biosphere Reserve Rhön these are mostly German tourists. Particularly the more prosperous people of an age between 30 and 60 who live in cities of West-Germany pay the most attention to "added values". They have less reluctance to pay more for a special dish. Animal welfare, no antibiotics and additives fed, environmentally friendly production pattern, particularly with rare breeds are expected as "added values". Surprising was the little attention taken to traditional farming. The additional payment for a good mixture of these "added values" is up to 30%. Only 19% are not willing to pay more.

The fulfilment of such tourist perceptions and expectations can be difficult in the production. Although "added values" would be paid additionally, the production pattern restricts the quantity and quality of meat produced while biotope grazing. Problems of fulfilment of consumer expectations with meat produced while biotope grazing:

When the consumers expectations and the product quality are compatible, the market channels determine the action of consumers to purchase special dishes. The purchase must be as easy as usual. The preparation of special meat like lamb or kid meat is mostly not known. Many consumers do not even know the names or the use of many parts of a carcass. They do not like to ask for advice. Butcher shops could advise consumers in special dishes but many of them do do not like doing this. Kid meat, lamb and extraordinary ways of production (organic farming, biotope grazing) do not fit into the usual way of processing and offering. The marketing of special products - especially when they have to get more money - disturbs the enterprise. In the mind of the butchers, it is easier to purchase the carcass from abbatoirs and sell it in big quantities for a cheap price. With the attention of consumers to the BSE crisis the butchers' shops became interested into "added values". It was experienced that consumers' trust in the offered product is linked with the origin, production and processing of the beef. Transparency became an important tool in marketing of many butcher shops. The second important supplier of special dishes are restaurants. The consumers trust the product quality, they must not do the (unknown) cooking and there is no need to store remainders of a carcass like purchasing for home consumption. The most important meat supplier to final consumers are supermarkets. Here, the price is the most important aspect in marketing. Consumers do not trust the product quality by label very much so they do not pay more for "added values". Small portions with easy preparation are more important for consumers and best parts of a carcass is favoured. The marketing of meat for higher prices than usual is very difficult and/or limited in quantity. Only on religious holidays do supermarket clients pay increasing attention to extraordinary products. Due to such short marketing periods the competition between all the special offers is enormous.

All these limitations in marketing of meat produced under agri-environmental schemes shows the limited market potential. Nevertheless, the "Rhön lamb" shows that niche markets can be created. Emphasis in marketing of special products to special target groups is even profitable for producer and the intermediate trade. Cooperation between them are valuable for successful marketing of special products. The consumer must be convinced that he is just doing his best when he consums the special dish and that the price is just right for the offered product. Promotion must create positive experience to consumer to eat meat with "added values". This is only possible when the producer and the intermediate trade is convinced himself in his product.


References

DEWENTER, J. (1996): Vermarktung von Produkten gefährdeter Nutztierrassen. Diplomarbeit am FB 11 der Uni GhK, Witzenhausen

RAHMANN, G. (1998): Praktische Anleitungen für eine Biotoppflege mit Nutztieren. Schriftenreihe Angewandter Naturschutz, Bd. 14, Lich

RAHMANN, G. (1997): Contribution of rural tourism to the market for livestock products in LFAs in Germany. Paper presented at the International Conference of LSIRDnetwork in Nafplio, Greece. 23rd - 25th January 1997: Livestock Systems in Rural Development in Disadvantaged Areas, pp 57-61


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