Newsletter No. 57 - Items 2 - 3
This newsletter contained signficant data on meat consumption in all regions to illustrate the market potential for ostrich meat and attempt to answer the question "what is the size of the ostrich meat market?"
World Meat Consumption Data
The FAO have been updating their database system and providing improved data, with a greater breakdown of the alternative meats, the market that Ostrich are sold into when doing a request for consumption of all meat. Previously we had Bovine, Pigs, Sheep and Goat, Poultry and other meats. Today, Turkey and Chicken meat have separate categories. Duck, Goose and Guinea Fowl also have their own separate category. Ostrich, because of the low levels of production, currently fall into ‘Other meats’, not elsewhere classified (inc. Camel and game).
We are continually asked about the size of our markets. Therefore this month’s newsletter will focus on publishing the data with further discussion on how to establish the size of the market. I have downloaded some of the most relevant consumption data and graphed it for easy analyses. I have printed them in a pdf document and can be viewed here. That document formed a supplement to this newsletter. The statistics are not direct comparisons to those published in earlier newsletters as the format in which they are now presented and the country groupings have changed with the new database.
There are two aspects when discussing market size.
a. Existing Market
The ostrich meat has been available for sale for no more than 15 years, with limited production and sales slow to develop as a result of such things as :
- Low volume
- Inconsistent quality
- Inconsistent supply
- Aggravated by interrupted exports from South Africa as a result of Avian Influenza, Newcastle Disease and Congo Fever
- Fragmented supply
- Limited marketing
b. Potential Market
Understanding the potential market should be the area of focus in order to develop a sustainable industry, provided there is production to support the development and the meat produced to an acceptable quality, consistently supplied and at the right price.
Figure 1 confirms the continual rapid growth of meat consumption that continues to be driven by increasing wealth in developing countries. The total meat market (excluding fish) has grown from in excess of 150 million tonnes in 1990 to 240 million tonnes in 2005. That is a growth rate of almost 60% in 15 years, thus confirming the predictions of significant growth in meat consumption.
Figure 1 - Size of Ostrich Market
The consumption of all other meats Rabbit, Equine, “Duck Goose and Guinea Fowl” and “Meat Not Elsewhere Classified (including camel and game)” - as illustrated in Figure 1 - is a very small percentage of the total consumption. The major reason for this is the lack of efficiencies in production of those species that make up that group. However, it is still a group showing rapid growth, moving from just short of 8 million tonnes to in excess of 13 million tonnes over 15 years (Figure 2).
Figure 2 - Meat Consumption by Region
Figure 2 illustrates the regional distribution of consumption of other meats. A PDF supplement to this newsletter contains a number of graphics as detailed in Table 1. We are a World Association, therefore it is important to reflect the variations in consumption by region as our markets are all different. Slide 6 illustrates the consumption of other meats in the different regions and, when studied, readers will be amazed at the significant variations from region to region. No two regions are the same.
Table 1 - Supplement Index
So what is the size of the potential size of the market? To capture just 1% of the world 2005 alternative meat market requires nearly 3m slaughter ostriches/annum.
What is the size of your market potential?
The answer to that question depends on a number of factors - such as:
- Local Market
- Export market
- If export market, which market and can you meet the protocols required
- Identifying your target market
- Red meat market
- Low fat meat
- Cheap meat – commodity market
- Buyers on open market with limited (if any) supplier loyalty
- Low price
- Exclusive Meat – low supply seeking product differentiation
- Seeking specialty product
- Recognises need to pay premium price
- Requires confirmed consistency of supply
- Production costs
- Influence selling price required for profitability
- Ability to supply consistently
- With Ostrich this requires production systems that ensure:
- Consistent egg laying
- Consistent hatchability
- Minimal mortality
- Consistent days to slaughter required to achieve meat yields
- Quality of product for target market
- Selling price sufficient to sustain consistent supply
Understanding fully the controlling influences of that final point is the key to progressing this industry and to date remains the barrier to progress.