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The Consulting Firm Specialized In The Meat Sector Gira Sees Long-term Complications From Covid-19

The consulting firm specialized in the meat sector Gira sees long-term complications from covid-19

According to the consulting firm Gira, which has participated in the Belgian Meat Office forum, the growth in demand for meats and processed meat products in households during confinement has not compensated for the loss of the amount of meat that was not sold to the canal restoration.

Gira’s prediction for Europe is that the decrease in the foodservice channel, which will be 33% according to its forecasts during 2020, will recover in 2021 but will continue to be 14% lower than in 2019.

On the other hand, as European lockdown measures have eased and the foodservice channel opens up once again, two key factors are still keeping consumers at home.

  • One is the economic factor: loss of income and layoffs mean that consumers are limiting their spending.
  • The other is the “fear factor,” whereby consumers choose to avoid crowds and public spaces for fear of infection.

Recovery begins in 2021

Production was affected this year by plant closures and labor shortages in the poultry, pork and beef sectors. There will be “some recovery” in 2021, said Rupert Claxton, director of the meat market section at consultancy Gira, with more “normal seasonality” in production. But to achieve this, the analyst warned, Europe needs to increase exports.

“European demand will be weaker, so we have to look for better opportunities outside of Europe and we have to accept that there will be lower prices within the European market. We will have to work harder to find those optimal opportunities.”

The analyst expressed concern that premium products, which are mainly sold in restaurants, will also be affected by the pandemic in the coming months. These include organic and quality certified products, as well as veal, lamb, mature cuts of beef and cured hams.

“As we move through this phase, in which people realize that they do not have job security, that they do not receive money, that their wages have been reduced or that they have been laid off, we will have a situation of uncertainty. And it is the premium products that are harmed”.

A market downturn is to be expected across the board. When Gira analyzed purchasing behavior after the financial crisis of 2008, the company observed that consumers were shifting from steak to minced meat, from beef to chicken and, in the developing world, from chicken to eggs and from eggs to vegetables. .

Photo: Belgian Meat Office