Consumer confidence is inevitable: European Animal Welfare Label
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Consumer confidence is inevitable:
European Animal Welfare Label
Achim Spiller
Food Marketing
2 d Expert
2nd E t Forum
F Sustainable
S t i bl Pork
P k production
d ti in i Europe
E in
i
Ingelheim
Image of different industries in Germany
75
71,0
,
67,4
66,4
Automotive
65 ,
62,6
Sweets
Punkte
Image-
Grade 58,8 Dairy
55
54,2
, Con- Finance
struction
50,4
Meat Chemical
45
Fleischsektors Autoindustrie
1 Chemieindustrie
Bauindustrie Süßwarenindustrie Milchsektors
B k
Bankenwesen
Albersmeier/Spiller 2008
Animal Welfare – a long-term perspective
Ethics: Society:
• Animal welfare problems in livestock • Changing values in western Europe,
husbandry (animal behaviour, animal increasing relevance of animal welfare
health)
Reasons for the
increasing animal
welfare requirements
Economics: Politics:
• Consumers perceive animal welfare as • EU: Action Plan on Animal Welfare;
quality signal Welfare Quality‐Project
• WTP for animal welfare: about 20 % of • Animal Welfare as part of the coalition
German consumers agreement of the federal government
• Insufficient development of premium • Germany: NGOs started campaigns
segments in the meat market against factory farmingIt is common sense in the society Animal Welfare from a PET-Perspective
How
o manya ya animals
a s cou
couldd live
e on
o a farm
a be
before
o e you
perceive it as factory farming („Massentierhaltung“)
Cows
500
Poultry Pigs
5,000 1,000
,
From this number of animals on,
on about 90 % of all consumers perceive
this as factory farmingComparison of real farm size (number of
animals) and the perception of factory farming
Ø farm size Factory farming from
Ø farm size in
Species in the consumer point
Lower Saxony
Germany of view starts at …
Pigs 294 519 1,000
Poultry 14,900 35,100 5,000
Cows 46 59 500
Source: Destatis 2011Open question: “What comes into your mind when you think about factory farming („Massentierhaltung“)”
But it is more than common sense – development of
philosophy
Prof. Peter Singer
• “…Is an international movement that aims to
defend the rights of the non-human great
primates - chimpanzees, gorillas, orangutans
and bonobos, our closest relatives in the
animal kingdom. The main rights are: the right
to life, the protection of individual liberty and
the prohibition of torture.
• The American animal rights movement, which
in its early years focused largely on the use of
animals in research, now has come to see that
factory farming represents by far the greater
abuse of animals.“First
st summary
su ay
• Pressure on the agribusiness especially in Middle Europe
• I Germany
In G massive
i debate
d b t about
b t the
th acceptance
t off meatt
business in mass media as well as in local conflictsTwo
o reactions
eact o s
1 Th
1. The political
liti l or market
k t standard
t d d strategy
t t
(see “Niedersächsischer Tierschutzplan”, Yellow Card in
Denmark or de facto standards by powerful retailers in GB)
2 Th
2. The market
k t differentiation
diff ti ti way
(see Animal Welfare Labelling)Two reactions
1. The political or market standard strategy
(see “Niedersächsischer
Niedersächsischer Tierschutzplan
Tierschutzplan”, Yellow Card in
Denmark or de facto standards by powerful retailers in GB)
Advantage Disadvantage
Equal requirements for all International competitiveness is
producers
d weakened
k d
No free riding behaviour All consumers have to pay
Broad, but typically small impact Bureaucratic
on the market
Difficult to predict
R
Reactive
i - image
i problems
blTwo reactions
2 The market differentiation way
2.
(see Animal Welfare Labelling)
Advantage Disadvantage
Consumers with Animal Welfare High segmentation costs
preferences pay only
Market differentiation, new value Difficulties of couple production
added
Company approaches possible Convincing of farmers is tricky
No impact on international
competitiveness
pMeat
eat marketing
a et g as coup
coupled
ed p
production
oduct o
• Typical problem in slaughtering and cutting
• Slaughterhouses have to ensure the full utilization of an animal
through various distribution channels
• Different preferences for animal welfare in various distribution
channels
• Experiences
pe e ces from
o the
t e organic
o ga c market:
a et prime
p e cuts ((witht label)
abe )
subsidize residual pieces
• => enormous price gap between standard and niche productAnimal Welfare Attitudes of German Farmers
• Online-survey
• Y
Year 2010
• 160 German farmers
• Conventional farms
• Nearly representative, but:
– better educated
– Farm size above averageA i l Welfare
Animal W lf Attitudes
Attit d off German
G Farmers
FAssessment of Animal Welfare:
Results from the EU project „Welfare Quality“
Good Housing Management
Animal Behaviour
Breeding Animal Welfare
Animal Health
Good Housing Management
Author‘s source according to „EU Welfare Quality“ Project12 % = yes 59 % = no 29 % undecided
Second
Seco d su
summary
ay
You can not force trust, you have to invest
(Niklas Luhmann)Animal
a Welfare
e a e Labels
abe s in Europe
u opeAnmal
a Welfare
e a e in Ge
Germany?
a y
T d Animal
Today: A i l Welfare
W lf as a niche
i h in
i the
h niche
i h (Market
a et ssituation
tuat o in Ge
Germany
a y
Potential consumers
g
Positive image
WTP for animal welfare Market potential!
Purchase of animal welfare Gap
products
p
Regular consumers Realised demandConsumer Behaviour in Germany
Animal
Concerned Bothered by
welfare The Careless
G
Groups animal
i l i l
animal
concerned uinterested carnivores
protectionists welfare
carnivores
Respon‐
19% 15% 22% 31% 13%
dents
Ethical Ethical No Animal Rejection of
attitudes, attitudes, inolvement, husbandry animal
assessment of but animal but okay, welfare,
Attributes animal welfare welfare assessment no Taste is
deficient, basically okay of animal involvement, important
WTP husbandry high meat
deficient consumption
Extended target group
Main target groupAnimal Welfare in Germany
Consumer Demand
Hidden Developed
Treasure Market
Dead Market Overtightened
Segment Actors
Market Supply
Source: authors‘ compilationThe New German Animal Welfare Label Standard Owner: Germany Society for the Protection of Animals
Labelling Concepts
high Gold‐Standard Ideal Position
Gold‐Standard‐Strategy
Sttandard niiveau
Mass‐Markket‐Strategyy
N.N. Mass‐Market‐Standard
low
legal minimum standard
l
low M k share
Market h hi h
highLabelling Concepts
high Gold‐Standard Ideal Position
Gold‐Standard‐Strategy
Sttandard niiveau
Mass‐Markket‐Strategyy
N.N. Mass‐Market‐Standard
low
legal minimum standard
l
low M k share
Market h hi h
highCo c us o
Conclusion
• Strategic management and trust building instead of waiting for
pressure and politics
• Animal Welfare is more than square meters – animal health and
real behaviour are in the focus
• Consumer demand - but market barriers from a supply chain
perspective:
– Processors have to sell the whole animal
– In non-integrated supply chains farmers are critical
gatekeepersCo tact
Contact
Prof. Dr. Achim Spiller
Ch i off Marketing
Chair M k ti ffor F Food
d anddAAgricultural
i lt l P Products
d t
Department for Agricultural Economics and Rural Development
Georg-August-University
g g y Göttingen
g
Tel. +49 (0) 551-399897
Fax. +49 (0) 551/39-12 222
a.spiller@agr.uni-goettingen.de
www.agrarmarketing.uni-goettingen.de
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