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18/09/2018

Spain's fourth-largest industrial sector meets at Meat Attraction

Wiki Spanish Food editorial team

The meat industry is the fourth-largest industrial sector in Spain, behind only the automotive industry, the oil and fuel industry and the electricity production and distribution industry. The industrial fabric of the sector - which includes abattoirs, cutting plants and processing plants - comprises around 3,000 companies, distributed throughout Spain, particularly in rural areas.

Although a significant part of the sector comprises small and medium-sized companies, this has not prevented the gradual development and consolidation of large business groups, some of them leaders at the European level. The joint production of all these companies makes the meat industry by far the largest in the entire Spanish food and beverage industry, representing a turnover of € 24 billion and 22.3% of the entire Spanish food sector in 2017, according to the National Association of Meat Industries of Spain, ANICE.

This powerful sector will naturally be represented at the only trade show in the Iberian peninsula dedicated solely to this industry: MEAT ATTRACTION, the Trade Show for the Meat Industry. Co-organised by IFEMA and ANICE, the second edition of the trade show will take place from 18 to 20 September 2018 at Feria de Madrid.

This turnover represents approximately 2.2% of the total Spanish GDP (at market prices), 13.6% of industrial GDP and 4.1% of the total turnover of Spanish industry as a whole. Direct employment by meat industry companies (85,706 workers) represents 24.3% of the total for the Spanish food industry.

Meat Attraction

Last year, the meat industry exported more than 2.3 million tons of meat, offal and processed products of all kinds, exceeding for the first time the € 6 billion sold in markets around the world, with a very positive trade balance of 477%, which very few relevant economic sectors can claim, helping to alleviate Spain’s traditional trade deficit.

Spanish meat production

Although with a slower growth of 1.6% compared to 2016, Spanish pork recorded yet another production record in 2017, reaching 4.25 million tons.

The beef sector continued the trend toward recovery which began in 2014, producing 641,003 tons (0.6% more than the previous year), while sheep and goat meat fell 1% compared to 2016, with 125,487 tons.

Pork production is the main segment in the Spanish meat industry, representing 64.1% of all meat, including poultry and rabbit.

With this volume of production, which represents 3.75% of world production, Spain has already consolidated itself in recent years as the fourth largest producer of pork meat, behind China (which alone produces 47.9 % of the world’s pork), USA (10.4% of world production) and Germany (5.1%), and ahead of Brazil (3.4%), Russia (2.6%), Vietnam (2.3%) and Canada (1.8%). It is also the second European country in terms of production, representing 17.5% of the EU total, ahead of France (8.6%), Poland (8.4%), Denmark (6.7%), Italy (6.6%) and the Netherlands (6.3%). The European Union as a whole is the world’s second largest producer, with 21.6% of the total.

Beef occupies third place in terms of volume (after poultry), accounting for 9.7% of Spain’s meat production, although in this category Spain is far behind world leaders USA and Brazil. Spain accounts for 8.2% of European production, behind France (18.8%), Germany (14.6%), the United Kingdom (11.7%) and Italy (10.4%).

The same goes for lamb and mutton, with production following the downward trend seen not only in Spain but in the whole of the EU for years. Even so, Spain is the second largest European producer of sheep and goat meat, with 14% of the total, behind the United Kingdom (38.9%) and ahead of France (11.4%) and Greece (10.0%).

With regard to processed meat production, it should be noted that Spain, producing 1.4 billion tons per year, is in fourth place within the European Union, behind Germany, Italy and France. In terms of volume, the biggest category is cooked meats, while in terms of value, the biggest category is cured ham and pork shoulder (including Ibérico).

The Spanish meat products market

Spain has one of the richest traditions in producing and consuming a varied selection of ham and charcuterie products. The diversity of its charcuterie production, which extends throughout Spain, is part of the country’s cultural and gastronomic heritage, and is popular both domestically and abroad.

Spanish consumers’ preferred products are cured, Serrano and Ibérico hams, the flagship products in terms of meat production in Spain. Serrano and Ibérico ham exceed 30% of the value of products marketed in the self-service and specialist channels. In terms of volume, cooked meats are in the first position ahead of cured hams, thanks mainly to the spectacular growth that cooked turkey has experienced in recent years. These are followed by cooked hams, sausages and chorizo​in consumer preferences.

And of course, we must not forget that the very important hospitality and catering channel stands at the top of the list, and is of particular importance for the consumption of all meat products, but especially for flagship products like Serrano and Ibérico ham, as well as cured cold meats and cooked meats of all kinds.

Data on consumption of meat and derivatives

In 2017, domestic consumption of meats and processed products fell by 1.4% in volume, but increased by 1.1% in value, returning to the recovery in some prices seen in 2015.

These data were collected in the last consumption panel by the Spanish Ministry of Agriculture (rolling yearly total December 2017), which shows a more pronounced behaviour in the meat category than the consumer food and drink basket as a whole, which dropped by only -0.7% in volume but increased by +0.6% in value.

According to the Ministry's data, all fresh meats fell in terms of volume (-2.2%) while pork (+2.5%), chicken (+0.8%) and rabbit (+2.2%) rose in terms of value, and beef (-1.6%) and sheep/goat (-2.2%) continued to fall. Moreover, frozen meats grew by 1.3% in volume and 2.7% in value.

The most positive trend was seen in processed meats, which progressed both in volume (1.0%) and in value (+ 1.9%) in that period.

These data should be compared with the information published by Nielsen, which shows that meat products grew by 4% in value in 2017 to € 14 billion.

According to Nielsen, this growth is due to the fact that the sector has been able to satisfy the values demanded by consumers in terms of health, sustainability, innovation, quality and shopping experience. The first two, health and sustainability, are the fundamental drivers of growth in the shopping cart of consumers. According to Nielsen, 60% of consumers claim to strive to make healthy daily purchases and 46% try to buy products that respect the environment. In addition, 57% of consumers say they are willing to pay more for higher quality products.

Foreign trade

2017 set yet another record in terms of Spain’s foreign meat exports, comfortably exceeding € 6 billion for the first time. It also exceeded the 2.3 million tons of meats and processed products sold in markets around the world.

These spectacular data reflect that, in little more than a quarter of a century, the meat industry has gone from no foreign trade to becoming the largest sector in the Spanish agri-food industry and a leading power in the world meat products market.

Last year, the Spanish meat sector exported 2.33 million tons of meats and processed products of all kinds worth € 6.1 billion to markets around the world, with an increasingly positive trade balance, in this case 477%, and a growth of 2.5% in volume and 9.4% in value compared to 2016, which shows increased exports of products with higher added value and at higher prices.

These outstanding global figures are largely based on the unstoppable external trajectory of the pork sector, an area in which Spain has become the third largest exporter in the world behind only Germany and the United States.

In 2017, 1,554,981 tonnes of pork were exported, worth € 3.6 billion (another record, exceeding 3.5 billion in sales), which represents a 4.4% growth in volume and a 12.5% growth in value, as well as very positive figures in processed products: 197,818 tonnes (+8.3%) and € 1.27 billion (+ 10.1%).

As for beef, the balance of exports of meat and offal was also positive, as it reached the record figure of 171,953 tons of exports (+1.4%) and € 610 million in value, 5.3% more than in the previous year, furthering the progress made since 2015.

In offal exports, this year was a period of consolidation after the spectacular growth seen in 2016. 369,451 tons of offal products were exported, worth € 413 million.

Most of Spain’s offal exports still go to the European Union, with most Spanish products going to France, Germany, Portugal and Italy. The sector faces two important challenges in this area: to continue to increase sales to non-EU markets, and to boost exports of our value-added products where Spain stands out from competitors in international markets, starting with flagship products such as Ibérico and Serrano hams.

In this regard, it should be noted that 37.3% of total exports of pork, offal and fat were sold in third countries. China is already the main consumer of Spanish pork, along with France, and ahead of Italy, Portugal and Japan.

In the case of beef, the percentage of sales to third countries - which recorded more modest levels in previous years - is progressing significantly. In 2017, it represented 14.8% of total exports, with an increase of 7.5% in volume and 16.7% in value. This clearly indicates the prospects and possibilities that this sector and the lamb and mutton sector show on their path toward globalisation.

To do this, it is essential for Spanish industry to make its way into these key markets, which are currently restricted for Spain and in which other competing countries are already selling.

For this reason, the sector calls on the Spanish authorities to do more to open up countries and unify administrative functions to make Spanish industry more competitive and eliminate inefficiencies in international activity.

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