Well over 300 delegates from all over the world visited beautiful Prague in September to attend the four day International Egg Commission (IEC) Marketing and Production conference.
Attendees from as far afield as Thailand, India, Mexico, Canada, Australia, Russia and the USA mixed with those from across the EU, including newer members such as Slovakia and the Czech Republic and those aspiring to join such as Turkey.
The conference was opened by Chairman Frank Pace from Australia, who, along with Julian Madeley in his Director’s report, recommended the new IEC Corporate Responsibility Statement (CRS) to members. Whilst the ultimate objective of the IEC is to support the egg industry internationally, working to promote eggs and their health benefits across the world the CRS aims to guide the future policy and work of the IEC in several key areas, using the principals that:-
Egg Farmers Care About:
Producing the highest quality, safest product
Our environment
Providing choice
The welfare of our hens
Feeding our growing population
These themes echoed through many of the presentations, together with the word Sustainability, which became very much the ’watchword’ for the conference and for future development across the whole of agriculture and beyond. How do we produce more food for an expanding population in a way that reduces impact on the environment, ensures animal welfare and provides a consistently high quality, safe product for the consumer?
The first section of conference was dedicated to marketing, from taking a view of the big picture of emerging consumer trends, how to then extrapolate and interpret consumer behaviour and finally to apply everything learned into a product.
Dr David Bosshart, CEO of the Gottlieb Duttweiler Institute for economic and social studies in Switzerland, one of Europe’s leading think tanks, started the first session with ’How will we be living tomorrow?’ an analysis of the trends that are influencing consumer behaviour. He explained that change will get ever faster and the key to being efficient in this environment is learning through communication and discussion; using co-operation as the basis of competition i.e. you have to form partnerships up and down the supply chain and co-operate with your enemies.
Of more significance perhaps is that purchasing decisions are becoming more the remit of the female than the male. Whereas the male decision tends to be about straightforward need, fulfilled by one choice, women prefer more choices and are influenced by wider concerns, i.e. there is less certainty.
Dr Bosshart also said that hybrid thinking had to take the place of ’silo’ thinking, so that ’glocal’ could be used to describe "thinking global but acting regional", a ’prosumer’ was a consumer integrated into the development chain providing a continuous feedback system.
In a global media world, consumers love ’Erotic Capital’. ’Erotic Capital’ describes attractiveness e.g. attractive people or the cult of the media personality. ’Erotic Capital’ describes the activity of shopping today, said Dr Bosshart, "people inherently enjoy shopping and it will continue to be a popular pastime even in a recession." We also must not underestimate the role of the virtual world. Gaming apparently puts people in the mood to shop.
Rather depressingly perhaps, Dr Bosshart confirmed that consumers have lost their emotional connection to food and are even proud of spending less on food. Food has become cheap, people are getting fatter and associated health problems on the up.
Eating is now about fun rather than necessity, eating habits have become de-structured and consumers ’graze’ all day rather than at specific mealtimes.
"We are at a lifestyle crisis in the Western world. This has to change." said Dr Bosshart, "We have to eat less, consume less and waste less. We have to increase the importance of agriculture and get consumers to reconnect with food by cooking again."
"A hope for the future my lie in our young people today, who are very much the ’responsible’ generation, they are concerned about sustainability and the environment. The idea of ’less but best’, thrifty lifestyles, better quality, better ingredients, with less waste is appealing, particularly in an era of recession."
What is needed is a rebalancing of the evolution of the food model from the industrial/scientific to the artisanal/feel good or the patriarchal to the matriarchal.
Romance has to be paired with high tech, to ensure there is reconnection with food on a consumer level but enough food grown to maintain an expanding population.
Customer Centric Retailing was explored by Patrick Rohrbasser from EMNOS data analysis experts in Germany. Patrick explained how we are living in a world where the volume of data generated expands 10 fold every 5 years, but whilst there is a lot of information around, we’re not very good at storing or using it properly.
EMNOS aims to take data and analyse it for customers such as Waitrose, Boots and Tesco, so that they can better target their marketing. For example Aldi in the USA undertook some work analysing what products sold best during the hurricane season. Unsurprisingly, torches and batteries were popular, but surprisingly Pop Tart sales soared. This sort of information allows a retailer to better focus marketing, discounting or promotion at the right time, to the right customers with the right product. Data analysis means the retailer can be much more customer focused, rather than category focussed.
Being ’customer centric’ and using data to map or define your customers e.g. by lifestyle, needs and income means you can focus your product offer and increase customer loyalty and growth. As Patrick said, "It’s not enough to place or remove a product based on sales performance. A decision based on customer definition is far more intelligent."
"To be a successful retailer in today’s ultra competitive environment you have to not only be competitive but be able to differentiate your offer and be relevant to your consumer."
Adding value to eggs was the theme of Peter Thornton’s (Noble Foods CEO) presentation and his essential message was that developing a brand can be an effective way to improve margins across the supply chain and increase egg consumption. Brands abound in other sectors of the food market, you only have to look at butter to see that 80% is branded. On the other hand, the egg sector has less than 15% branded. This to Peter represents a real opportunity.
"Brands are created, they don’t just happen" said Peter "and you have to think beyond food to find new ways to sell your product. For example, think of the way Kellogg’s have developed alternative food offers from cereal snack bars to sweets; bread is no longer just bread, we have bread for toast, bread for dieters, bread for taste (seeded etc), bread for health (omega 3, wholemeal).
In the UK eggs are dominated by ’retailer brands’. "Why do we offer our brand ideas to the retailers? said Peter. "My motto is if you have a good idea keep it to yourself. Focus on your consumer, not the retailer."
"The other problem we have in the UK is the lack of in-store focus on eggs. Where are the eggs? Usually at the back of the store, in with the baking goods, often in a poor or low stocked display."
"But, the problems outlined above actually provide golden opportunities to improve and expand egg visibility and consumption."
Peter went on to explain to the international audience how the ’Lion’ assurance scheme has built consumer confidence in eggs over many years and has achieved a 90% recognition rate. Media coverage of the health benefits of eggs has more recently been fantastic and industry commitment to generic egg promotion remains paramount.
However, having invested in new colony systems to the tune of some £400m, Peter issued a blunt warning to other euro member states who fail to achieve conversion to new housing systems.
"Be very sure that we don’t intend to let conventional or ’illegal’ eggs into the UK post 1 January 2012"
"Back to my central theme, surveys show that although eggs are a high value food category, and it is a sector that is growing faster than other staple products, they only get into 66% of shoppers baskets. The growth is mainly in the free range sector and has been fuelled by celebrity chefs; supermarket moves to cage free only supply and an expanding free range product sector."
"There is though, even more potential to increase UK per capita consumption.
Eggs can play a role in all the macro food trends such as
• New meal occasions
• More modern usage
• Back to basic cooking
• Convenient and quick
• Economical and healthy
• Locally produced
but we have to make eggs more exciting." explained Peter.
"Noble Foods are conducting trials with Tesco, Asda and Morrisons to create more in-store theatre, move eggs around the store and use many different places to promote eggs, from adverts on milk, to in store competitions and coupons. We have to show that an egg is not just an egg and one way of doing this is through brands. Consumers love brands, they provide a quality guarantee, ease of choice and ultimately, pleasure."
"But," Peter went on "building a brand is a long term commitment. With Happy Egg we have developed a family brand that is about connecting happy hens with tasty eggs. We surveyed consumers as to what would prove attractive and launched the product 18 months ago. Since then we’ve achieved a 7% market share by value and a £48m annualised turnover. Only 23% of the product has been sold on promotion and in general there is a 10% price premium over standard free range. We hope to grow the price premium over time. The Happy Egg brand has also been responsible for 75% of category growth and achieved a 12% share of free range egg sales in the same time."
"So it just goes to prove what opportunities for success there are for eggs and we’re not stopping there. We’ve plans for an organic shell egg brand in 2011 and in November this year are launching trial restaurants at universities across the UK called "Pancakes and More" which will offer breakfast style eggs in the mornings (e.g. omelettes and scrambled egg) and lunch/teatime style eggs in the afternoons (e.g. sweet & savoury pancakes, frittatas and waffles)."
So maybe the next stop is Happy Egg International!
Moving into presentations around production and trade, Dr Jeff Armstrong from Michigan State University, James Kellaway from the Australian Egg Corporation and Dr Vincent Guyonnet, IEC Scientific Advisor all explored the conundrum of how best to produce more eggs for an expanding population, taking into account all the environmental, economic, cultural and social ideals.
Dr Armstrong advocated that producing eggs isn’t just about profit or even welfare; it’s about producing a quality, safe, affordable product that uses resources efficiently and sustainably. And whilst ’perceived’ welfare requirements may drive some consumer groups, it is the science that must prevail, taking into account all parameters within housing systems; that is;
Food safety
Animal welfare
Worker welfare
Environmental impact
Michigan State University is to commence a commercial scale research project in 2011 to evaluate different housing systems, including cage, enriched colonies and aviary along the lines outlined above. (Interestingly free range systems are not being researched as there is not the land available).
The Australian Egg Corporation is launched a consumer campaign on World Egg Day (8 October) to highlight how farmers are crucial to securing world food supply. If hunger and starvation are to be abolished, the world needs farmers that are "Farming for the Future Now!", using less land, less water and with a low carbon footprint.
As James Kellaway highlighted
• "In 2009 about 1 billion of our planet’s people don’t get enough to eat."
Source: UN Food and Agriculture Organisation (FAO), 2008.
• "The world’s population is to rise to 9.1 billion people in 2050, compared to current levels of 6.7 billion, which would require a 70% increase in global farm production." Source UN FAO 2008.
• "In less than 50 years, the world will need 100% more food than we produce today." Source: Science Magazine, 2005.
• "In 2009, the global food crisis is likely to add another 100 million people to the list of those living in extreme poverty." Source: World Vision, 2009.
"A revolution in agriculture will be required to adapt food production systems to growing needs and the changing environment. This new ever-green revolution, must take social-economic and environmental factors into account by focussing on three elements: production, sustainability and poverty reduction." Source: UN Standing Committee – ending malnutrition by 2020, an agenda for change in the millennium.
James explained that 98% of the Australian egg industry have committed to developing the meaning of the IEC egg production statement – ’feeding the world’ through research and adoption of innovation.
This commitment means egg business outcomes must have ’triple-bottom line’ accounting in terms of
Environmental performance – any egg business MUST take account of their impact on GHG emissions and the carbon ’footprint’ of business activities
Economic performance – any egg business MUST take account of their impact on profitability, operational growth and shareholder returns
Social performance – any egg business MUST take account of their impact on feeding the world, creating consumer choice and delivering a cost effective food.
The Aussies have produced a really moving DVD to illustrate their point, which was distributed widely at the conference. Contact the IEC for further information if you are interested.
Dr Vincent Guyonnet outlined the work of the IEC in terms of animal welfare, promoting the launch of a new IEC scientific database on the welfare of laying hens which will bring scientific research from around the world into one library for members. The IEC have also adopted 5 key messages on "The welfare of our hens"
• Egg farmers and processors respond to consumer needs by offering different kinds of eggs;
• An egg farmer’s number one priority is the care and well-being of his laying hens;
• The animal welfare guidelines supported by the IEC are based on the best available science conducted by researchers around the world;
• The care a farmer provides his hens is as important as the kind of housing used;
• Maintaining a variety of housing systems globally is important to ensure egg production meets the social, economic and environmental needs of each country.
The IEC aims to continue reinforcing its strong relationship with the OIE (World Animal Health Organisation) and expand the organisation’s dialogue, partnerships and visibility amongst other welfare groups across the globe. It also intends to work with the FAO in its quest to provide a world free of hunger and malnutrition, particularly the Animal Production and Health Division which sees the private sector as a key partner in ensuring an equitable, safe and responsible livestock sector.
Interestingly, the FAO is working on a very comprehensive Greenhouse Gas Emissions project for all food animal species, a dairy report has just been completed and published with a report for ruminants under review and monogastric species, Poultry and Eggs are coming next and the IEC has already been working with the FAO to provide worldwide data on egg production (housing types, production parameters, feed formulation, manure disposal).
