The emergence of new markets for higher volumes of Irish sheepmeat has been critical in underpinning growth in sheepmeat exports. The growth in markets such as Sweden, Germany, Belgium and the Netherlands in recent years has also been important in compensating for reduced sheepmeat exports to the French market, along with the added bonus of being higher-value markets importing primal products and higher-value cuts over full carcases. Members of the Offaly Lamb Producer Group recently undertook a study trip to Belgium, a market which has recorded significant growth in the last 10 years and was worth €25m in 2016. An important factor in developing the market is the presence of Irish Country Meats (ICM) in Belgium, which made the visit of the Offaly group members possible.
The emergence of new markets for higher volumes of Irish sheepmeat has been critical in underpinning growth in sheepmeat exports. The growth in markets such as Sweden, Germany, Belgium and the Netherlands in recent years has also been important in compensating for reduced sheepmeat exports to the French market, along with the added bonus of being higher-value markets importing primal products and higher-value cuts over full carcases.
Members of the Offaly Lamb Producer Group recently undertook a study trip to Belgium, a market which has recorded significant growth in the last 10 years and was worth €25m in 2016. An important factor in developing the market is the presence of Irish Country Meats (ICM) in Belgium, which made the visit of the Offaly group members possible.
A.Lonhienne
ICM acquired Belgium’s premier processing plant, A.Lonhienne, in 2011. The plant, which has 45 employees, is located in Liège and acts as a good distribution platform for sales across Belgium and also further afield into the surrounding countries of France, Netherlands, Germany and Luxembourg.
ICM managing director Joe Hyland described how the opportunity came about and how the venture is starting to deliver real benefits.
“A.Lohienne is a plant that is well renowned in the Belgian sheepmeat industry. Alphonse Lonhienne and his wife Maria established their business as a specialist facility supplying meat to the butcher and wholesale trade. It developed a strong and loyal customer base which saw it quickly expand its reach.
“Their son Marc joined the business in 1981 and we were fortunate to develop a relationship with him and ultimately acquire the plant in 2011. We have been careful to respect and maintain the strong traditions on which the company was formed.”
According to Joe, this ethos has allowed the company to develop and strengthen relationships and in turn increase Irish sheepmeat exports to the market.
“The market has good opportunities, with 11 million potential customers and a very small domestic supply base. There was a great opportunity to establish and chip away at the New Zealand supply model, which was rewarded a few years ago by Delhaize, the largest retailer in Belgium and our largest customer, switching exclusively to Irish and UK lamb.
“We are confident we can continue to develop our business in Belgium and have recently purchased a new building close to the existing premises to future-proof capacity.”
Plant dynamics
General manager of the A.Lohienne plant Alex Dupont explains that while the premises is relatively small, it is capable of achieving high throughput levels, with capabilities for retail packing and further deboning.
The specification preference is driven by the strong tradition the company has in supplying high-quality carcases to the retail butcher trade.
“We are looking for a balance between conformation and fat cover. A lamb with a very good grade and no fat will not sell well and the optimum for us is a U grade lamb with a nice cover of flesh.
“The number of butchers operating in their own shop continues to fall, but there are many of the larger retailers with a butcher counter who also like to process their own lambs. Some like carcases, others like primal cuts, which we supply in vacuum-pack form.”
The preference in Belgium is for lamb chops/cutlets, which are particularly in demand during barbecue season.
Alex also says the type of consumer purchasing lamb is changing in Belgium, like everywhere else.
“There are fewer people cooking the traditional leg of lamb. In Belgium, this is usually cooked for family occasions, with demand best for smaller or half leg-cuts. Meat consumption has been under pressure in recent years, but consumption of lamb is holding pretty steady at about 2kg per head.
“Many Belgians don’t eat lamb during the week and it is more popular for occasions or celebrations, with lamb also popular on restaurant menus.
“Products such as lamb sausages are very popular among consumers living in Belgium and Europe.”
Along with Belgian lamb, sheepmeat processed through the plant is sourced from Ireland and the UK due to the high demand for specific lamb cuts at different times during the year.
Domestic supply
Market prospects remain positive for Irish sheepmeat in Belgium, with New Zealand failing to fill its EU quota in recent years and unlikely to significantly increase exports to the EU, while Belgian domestic supply remains under pressure.
Table 1 outlines the volume and value of Irish sheepmeat exports to Belgium since 2010, with the upward trajectory very visible.
On top of this, there were 8,507 sheep exported live to Belgium in 2016 and 3,753 in August 2017.
Sheep is a minor sector in Belgium, with arable farming and beef production the primary enterprises.
The sheep sector has been hit hard in the last 10 years, with Bluetongue virus in 2007 and Schmallenberg virus in 2012 contributing heavily to the sheep flock close to halving to just 300,000 ewes.
A large percentage of these are present in very small flocks, with progeny from these regularly killed and consumed by producers and their extended family.
Lamb – a promotion-sensitive product
The group also visited a Delhaize store in Brussels and met with the retailer’s meat buyer Gilles Mortier Delhaize. Delhaize is celebrating its 150th anniversary in 2017 and Gilles says that the retailer is keen to continue to grow its presence in the market. It currently has 800 stores, 600 of which are independently owned and trading under the Delhaize banner. Stores range from small 200m2 units to very large 2,500m2 stores, with the larger premises generally possessing a butcher counter.
Gilles says that the group’s decision to switch entirely over to Irish and UK lamb is one of the best decisions they have made. The lamb is traded under the Celtic Lamb logo which depicts sheep grazing.
“We first started working with Irish lamb in 2011 when we sourced milk lamb. We were very happy with the quality and once the relationship was made, we were happy to switch over entirely to Irish and EU lamb.
“Belgian consumers are interested in the story about where their produce comes from and how it is produced. We can order our lamb and 48 hours later have it sitting on our shop shelf.
“There are not many other products with an import requirement that can do this and it also greatly reduces our carbon footprint over using New Zealand lamb.”
Lamb is a promotion-sensitive product with consumers quickly increasing the value of their spend during a promotion. This is a tactic that is used across all meat categories, with the aim of limiting a reduction in consumption while also attracting new customers to the store.
Regarding Belgian consumers preferring domestic produce, Gilles says that this is true for many products, but consumers realise that there is not the critical supply base to provide Belgian lamb and are accustomed to imports with a high volume of New Zealand lamb traditionally in the market.
“For lamb, it is not a problem, as consumers have always had access to imported products. It is very different for beef, with 90% of product produced locally. There is some growing demand for beef produced with a point of differentiation. We have Irish Hereford beef and customers are happy with its grass-fed production.”
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