During the inflation wave that swept across Europe, many consumers turned away from organic and other premium products. However, with personal finances recovering, the change is now being felt at Friland, Danish Crown's sales company specialising in organic and free-range meat.
In the 2023/24 fiscal year, revenue increased by 5 per cent, from DKK 919 million to DKK 965 million. However, the number of organic pigs and cattle slaughtered was lower than the previous year. This means the actual revenue growth per unit was 13 per cent. In other words, Friland has largely eliminated the need to divert organic meat to the conventional market.
“It’s fantastic to see consumers choosing us again at the grocery store. Within just a few months, we’ve gone from struggling to sell as much as possible each week to being sold out weeks in advance. This year has truly been a major step in the right direction,” says Søren Tinggaard, CEO of Friland.
In Denmark, sales of organic pork have risen by 4 per cent, even though the number of pigs slaughtered has decreased by 8 percent. Organic beef sales remained steady, despite a 12 per cent drop in supply. Meanwhile, sales of meat from free-range pigs increased by 6 per cent, supported by a 2 per cent growth in slaughters.
Exports of organic pork to Friland’s European customers have also increased, and the company’s German sales division has seen a significant improvement in profitability.
“We believe in a continued upward trend and rising prices. Currently, there is little appetite among organic producers in Europe to expand production. At the same time, we feel we have strengthened our market position. We maintained our product range and prioritised serving our customers during the period of consumer restraint, and they remember that,” says Søren Tinggaard.
For most of Friland’s suppliers, the average payment per kilogram has increased compared to the previous year. Payments to organic pig suppliers rose from DKK 23.69/kg to DKK 24.74/kg, while payments for free-range pigs increased slightly from DKK 17.46/kg to DKK 17.55/kg for approved kilos. However, payments to organic cattle suppliers saw a minor decline, from DKK 31.73/kg to DKK 31.65/kg.
Friland is now working to expand its customer base and strengthen relationships with key clients. The company’s goal is to ensure payments that allow suppliers to earn a reasonable income and further develop their organic production.
“It’s important for me to emphasise that we are continuing efforts to increase overall payments. We fully understand that organic producers need a period of stable earnings. In this regard, a stronger Danish Crown, of which we are a part, will also enhance our ability to increase payments to suppliers,” Søren Tinggaard concludes.