Yemco Conference Cork 23 – 24 March 2007

1. Yemco Conference Cork 23 – 24 March 2007

2. The Real ThingMeat in a Changing World Aidan Cotter YEMCO Cork, March 2007

3. Population Growth 200,000 people per day, 74 million per year and about 371 million over a 5 year period, or nearly the size of all of Western Europe in 2002 Source: UN, World Population Prospects

4. Ageing Population

5. Rising disposable incomes % agreeing ‘I have all the material things that I need in life.’ 80 69 67 70 58 57 60 54 50 41 40 31 30 29 30 19 20 10 0 GER FRA US AUS UK IND ITA POL JAP CHN Source HenleyWorld 2006

6. Commuting time The average commute time (in minutes) across a range of European countries 50 45 44 43 45 38 40 36 33 35 30 23 25 20 15 10 5 0 EU Italy Spain France Netherlands Germany UK Source: Study by RAC 2003, published on BBC website

7. Migration Projected Annual Net Number of Migrants for major world regions from 2005 to 2050 (thousands) 2000 1370 1500 1083 1000 500 103 0 -500 -455 -1000 -804 -1500 -1297 North Europe Oceania Africa Caribbean Asia America Source: UN Population Division 2006

8. Retailer power

9. Change in the World Meat Market World Beef Production, 2005 – 2015 (m tonnes) (Developing) “Brazil, India, and China …the new epicentre of forces shaping world agricultural production and trade” (Developed) Source: OECD

10. World Beef Production to grow by 2% annually… World Beef Production, 2006 – 2015 (m tonnes) 12m tonnes higher by 2015 Source: OECD

11. South America & Asia driving production growth Beef production trends by key suppliers, 2006 – 2015 (m tonnes) Source: OECD

12. However, limited growth in global beef exports… World Beef Exports, 2006 – 2015 (m tonnes) • Main consumption growth expected in South America and Asia • Satisfied through local production • Curb export growth Source: OECD

13. Global Beef Export Trends Global Beef Exports, 2006 – 2015 (m tonnes) Source: OECD

14. Similar trend expected in global pigmeat market World Pigmeat Production, 2006 – 2015 (m tonnes) World Pigmeat Production to rise by 18m tonnes by 2015 World Pigmeat Exports to rise by just over 1m tonnes Main consumption growth expected in China, Brazil & USA - Satisfied through local production

15. World Cattle Prices World Cattle Prices, 2006 – 2015 (US$/100Kg) Source: OECD

16. Stable Consumption means beef shortfall will continue to grow EU Beef Balance, 2000 – 2015 (‘000t cwe)

17. Imports Increasing By 2015, imports to grow to 1 million tonnes Source: GIRA

18. Less change expected in EU Pigmeat market • EU-27 Pigmeat production to be less than 2% higher by 2015 • All of increase by 2010 • Growth expected in Spain, Germany and some new states • EU-27 exports to fall by 15% by 2015 • Strong competition on world markets • Solid EU consumption • EU-27 Imports • Expected to rise, from a very small base • Key issue will be level of Brazilian access to EU market • Issues facing sector • Production costs and environmental regulations • Trend in feed prices

19. WTO: The EU Offer

20. WTO – Current State of Play • Efforts to resume “meaningful” talks continue • Some progress made in Davos • However, • No clear framework for reaching agreement • US yet to make any further offers • Fears that EU are willing to concede further on market access • Deadline end of March – if this is missed it could be 2009 • US fast track mandate expiring, French elections etc

21. WTO: A timeframe to prepare Export subsidies to be phased out by 2013 Market access remains key issue Beef imports to grow from 7% to 19% of market Market prices forecast to fall by 10% Timeframe uncertain but overall direction increasingly clear

22. CAP “Health check” • CAP “Health check” announced by Commissioner Fischer Boel for 2008 • Substantive reform not envisaged • However, potentially efforts to commence process toward compulsory decoupling across Europe • Market signals driving producer decisions

23. Bio fuels and feed prices Source: USDA

24. Climate Change:Food Miles Agriculture and food now account for nearly 30 per cent of goods transported on UK roads The average US grocery store’s produce travels nearly 1,500 miles between the farm where it was grown and the customers refrigerator

25. Animal Health Costs of animal disease impacts UK BSE 1996 UK FMD 2001 Netherlands CFS 1997 Taiwan FMD 1997 Costs as % of production value in that year 158% 244% 99% n.a. Impact on GDP -0.4% -0.2% -0.75% -0.64% Source: IMS The intangible costs?

26. “Insanity: doing the same thing over and over again …. and expecting different results” Albert Einstein

27. Segmentation in the EU Retail Meat Market Future Growth Trends (% annual change to 2015) • Premium  6% • Standard 2% • Discount  7% • Traditional Outlets  2% Source: GIRA

28. Food Inflation Food is driving inflation in the UK - UK food prices growing at a rate of over 5% per annum UK Beef Market is polarising % change in price by segment, 2005 - 2006 Polarisation within offer

29. Consumer Lifestyles “I want to manage or improve my health and wellness” “I want experiences that help me get the most out of life” “I need to be able to cope with the demands of my busy day” “I like to make smart choices when I buy things and want to feel I’m getting a good deal” “I am looking for the real thing; I care where it comes from and how it is made” “I want to feel good about the choices I make and do my bit when I can”

30. Quest for health & wellness Boosting the body Strategies to protect against physical illness and disease “I want to manage or improve my health and wellness” Healthy heart chocolate, US Coping strategies Using or excluding products for medical reasons Image controlManaging weight and external appearance Freefrom… Pure and fresh Backlash against the interventions of man Organic Baby Food Skin and hair enhancing yogurt, Spain

31. A New Language in Food nutricosmetics

32. The real thing Back to basics How things used to be “I am looking for the real thing; I care where it comes from and how it is made” Provenance Where things come from CraftsmanshipThe human story of the company or product Transparency Openness of production and ingredients

33. Making a Difference Sustainable consumption Reducing the impact of my consumption on the health of planet earth An empty bottle – fill it with tap water! “I want to feel good about the choices I make and do my bit when I can” Animal ethicsEnsuring that the animals are well treated Fair trade coffee Fair deal Giving a fair deal to everyone in the production process Good causes Supporting a worthy cause Adopt a free range chicken Pink & white M&Ms for Breast Cancer Charity

34. Market Positioning

35. Irish beef exports2000-2007 International Mkt.s Continental Mkt.s United Kingdom

36. Export Beef Distribution +18% Irish Beef exports to continental EU markets 45,000 +13% 45,000 +18% +21% 52,000 51,000

37. Promoting Irish Beef

38. "Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed ...every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.  It doesn't matter whether you are a lion or a gazelle ...when the sun comes up, you'd better be running."

39. The Real ThingMeat in a Changing World Aidan Cotter YEMCO Cork, March 2007

40. Yemco Conference Cork 23 – 24 March 2007