SAUSAGES HAVE NEVER BEEN MORE RELEVANT
At-home consumption of sausages has risen during lockdown, for example around one in three sausage consumers in Japan and the UK are eating more than they used to (Devro Consumer Attitude & Behavioural Study 2020). In mature/ developed markets, sausages are seen as affordable, easy to cook (safe), and a popular and tasty meal or snack that everyone in the household can enjoy. In a relatively short period of time, COVID-19 restricted mobility has changed the role of convenience foods and snacking as the balance of consumption has shifted to the in-home environment, creating new usage occasions and consumer needs. According to Mintel Asia, ‘air-frying’ is a growing household trend as is eating sausages for breakfast and in lunch boxes. Kantar UK data showed UK and Irish consumers sought comfort in familiar pork-based recipes, putting recent demand for chicken and plant-based sausages on hold.
Out of home has been a different story. One side-effect of COVID-19 has of course been reduced foodservice demand (dine-in or on the go), with the rise in takeaway/delivery and the uplift in retail offsetting this to a degree. Adopting a multichannel strategy has been an important food industry mantra this year. Across all countries featured in McKinsey’s 2020 global consumer sentiment surveys, consumers are turning to digital and reduced-contact ways of accessing products and services – a trend accelerated by COVID-19. In a B2B environment, finding new ways to collaborate on innovation and interact remotely, and to increase automation in manufacturing are challenges Devro is tackling head-on with several new initiatives already in play.
GLOBAL MEAT CONSUMPTION SET TO REBOUND BY 2022
Global meat consumption has experienced a slight dip during 2019–2021, largely due to the impact of African Swine Fever (‘ASF’) across Asia. It should then rise again steadily, representing 12% forecasted growth over the ten years to 2029. Much of the per capita increase (3%) is attributed to developing countries (6%) and poultry is the main driver of growth. Similar to the trends we see in collagen casing, the overall growth rates in meat consumption volumes in developing countries are approximately five times that of developed countries.
Slower income growth, ageing populations and a levelling off in developed markets as a result of saturation and dietary preference will contribute to a flattening curve towards the end of the decade. As regards eating preferences, attitudes towards meat consumption continue to be influenced by growing awareness and engagement with macro topics such as health and wellbeing, animal welfare and the environment.
Overall, consumer demand for protein shows no sign of abating across global markets. To capitalise on this, Devro will continue to communicate its commitment towards product transparency, clean label ingredients such as natural colours, and sustainable sourcing in order to stay aligned to consumer trends.
ECONOMIC SHOCK LIKELY TO HAVE AN IMPACT ON URBAN POPULATIONS
According to the National Health and Family Planning Commission, the total population of China will reach 1.43 billion by the end of 2020. Based upon a population growth of 60 million people and the current consumption level (per capita consumption of 41.5kg), the newly added population will increase pork consumption by about 2.5 million tons (Genesus Global Market Report).
It is too soon to report on the effect of COVID-19 on fertility rates (it could accelerate the long-term trend towards smaller households in high income countries) while the financial uncertainty as well as lack of access to healthcare during this period may also have a lasting impact on birth rates. Similarly, the economic shock could accelerate urbanisation; the rise of digitalisation, automation and need for employment could offset the remote working trend and higher cost of living in urban centres.
RECOVERY IN SPENDING POWER GROWTH AHEAD
Affordability will be a key selling point for sausages in the challenging economic climate ahead. Meat consumption is widely used as an indicator of economic wellbeing and vice versa, and the ongoing financial uncertainty and blow to consumer confidence in the last 10-12 months is likely to put meat under pressure.
OECD estimates (September 2020) projected a rise in unemployment to 9.4% in Q4 2020 from 5.4% in 2019. They indicated that constant global GDP was projected to decline by 4.5% in 2020 before picking up by 5% in 2021. Many economies will not recover their 2019 output levels until 2022 at the earliest (OECD Economic Outlook, Interim Report September 2020). These projections did not anticipate further national lockdowns, however, nor did they consider the possibility of a vaccination roll out as soon as early 2021.
IMF projections of per capita GDP reflect the slowdown in 2020 but also the acceleration anticipated in the following five years