Export potential for pork produced under higher animal welfare standards: A comparative study of market trends and consumer preferences
by Rebecca Derstappen
Date of Examination:2023-12-18
Date of issue:2024-05-08
Advisor:Prof. Dr. Martin Banse
Referee:Prof. Dr. Achim Spiller
Referee:Prof. Dr. Katrin Zander
Persistent Address:
http://dx.doi.org/10.53846/goediss-10487
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Abstract
English
Pork production has developed steadily in Germany over the past 30 years. The increasing demand from the exporting slaughter companies and increasing producer prices have led pig farmers to invest in their production. As a result, Germany has managed to increase its overall self-sufficiency level from around 85% in 2000 to 129% in 2021. Since 2007, Germany has been a net exporter of pork and exports various cuts to international pork markets. In particular, cuts such as pork bellies or feet, as well as by-products are exported. In this context, before the outbreak of the African swine fever (ASF) in 2020, Germany supplied not only the European internal market but also particularly the Asian market. Consequently, Italy, Poland and the Netherlands are among the most important destination of German pork on the European side, as well as China, Japan and South Korea as most important destinations on third-country markets. Parallel to the development on the pork market, society’s interest in the subject of livestock farming is gaining in importance. Especially the conditions under which livestock is kept are the subject of controversial discussions in society and among politicians and scientists. Demands for higher animal welfare standards are becoming increasingly louder. Specifically, for pig farming, this would mean more space, more manipulable material and outdoor access for livestock farming. In addition, the use of less antibiotics and the abandonment of non-curative interventions such as tail docking are also being called for as part of higher animal welfare standards. Along with this debate, society, politicians as well as scientists have been pushing for a transformation of livestock farming in Germany for the last two decades. Various options are already being discussed to ensure that this transformation succeeds. On the one hand, these options define higher animal welfare standards and, on the other hand, they recommend how this transformation could be financed (“Borchert-Commission”). In addition, there are also private-sector initiatives that are pushing the transformation of livestock farming forward (“Initiative Tierwohl”). Overall, the transformation of livestock farming towards improved animal welfare standards is associated with higher production costs for farmers. These additional costs on the production side would have to be compensated either by higher prices for consumers or by public funds such as subsidies. Against the background of the transformation of livestock production to higher animal welfare standards and the fact that Germany is a net exporter of pork, this dissertation aims to determine whether pork produced under higher animal welfare standards would also be competitive on international markets. Based on the foreign trade statistics for Germany, the following target countries were examined and analyzed in more detail in the context of this dissertation: Italy, Poland, Japan and South Korea. In order to achieve the overall objective, different perspectives are considered and analyzed. As a starting point, the status quo of pork production in Germany and in the studied countries will be presented in more detail. In addition, consumer attitudes and perceptions on the subject of animal welfare in the study countries will be analyzed in order to subsequently make statements about an existing or non-existing export potential for German pork produced under higher animal welfare standards. Finally, marketing and policy recommendations will be derived. Thus, the following four research questions are addressed: RQ1. What is the current situation of the pork markets in Germany and the respective study countries Poland, Italy, Japan and South Korea? RQ2. Which consumer segments are interested in animal welfare and imported pork? RQ3. Is there an export potential for German pork produced under higher animal welfare standards in particular in the four selected study countries? RQ4. Which marketing and policy implications can be derived in order to support a conceivable export potential? To answer these research questions, a mixed-method approach was used that included various surveys. Qualitative methods such as expert interviews and focus groups were used, both of which were analyzed using qualitative content analysis. In the expert interviews, stakeholders along the pork supply chain in the four study countries were interviewed. Due to the Covid-19 pandemic the focus groups took place online and were conducted with consumers in the study countries. Additionally, an individual online survey was conducted with consumers. The data obtained from the online survey were firstly analyzed descriptively and then using multivariate analysis methods such as a principal component analysis and a cluster analysis. The results obtained are summarized in the four contributing articles and answer the defined research questions. Based on RQ1, the results show that all four study countries are net importers of pork with high demand for pork on domestic markets. Especially in Japan and South Korea, an increasing demand for pork amongst the population is evident. In addition, the different supply chains of pork in the study countries could be characterized, meaning that German meat in all countries is primarily imported at the level of processors or gastronomy. However, a small part, especially in the European countries, also ends up directly in the food retail chain. Moreover, the analysis of the German pork market shows that especially cuts such as neck, belly, feet or ham are exported to the respective study countries. Overall, German companies are described as trustworthy and reliable trading partners. Furthermore, according to the expert interviews German pork is associated with high-quality. However, the experts indicated that consumers or importers in the respective study countries tend to not be interested in animal welfare. All this shows that there is an export potential for German pork which is produced conventionally, but there are barriers when considering pork produced under higher animal welfare standards on the export markets. Referring to RQ2, the results of the surveys with consumers in the study countries give information about the relevance of animal welfare and the country of origin. Thus, in Italy and Japan a segment could be identified that is interested in animal welfare and at the same time potentially open towards German pork produced under higher animal welfare standards. In Poland and South Korea, the identification of a segment that is interested in imported pork was not as straightforward. Nevertheless, a segment interested in animal welfare could be identified for these two countries as well. Moreover, a segment of "local advocates" with strong preference for domestic pork could be observed in all four countries. Although, this group rather rejects imported meat, there still seems to be interest in animal welfare, at least in Italy, Japan, and South Korea. The third segment is the group of "price-sensitive" consumers who have no further expectations. This group is neither interested in the origin of the meat nor in the issue of animal welfare. When buying meat, only the price seems to be important for these consumers. In addition to these identified segments, there are other factors, for example the identification of important purchasing criteria or the relevance of animal welfare, that are significant for the interpretation of an export potential. In this context, further consumer characteristics could be analyzed, which primarily relate to consumer behavior and attitudes towards animal welfare. Overall, quality, appearance, country of origin and price are important to all consumers in all four countries. In contrast, criteria such as environmental protection or animal welfare are only mentioned or rated as very important by a few consumers. Regarding the country of origin, a majority of respondents prefer domestically produced meat and often associate imported pork with lower quality. Nevertheless, it could be shown that there are a number of consumers in the study countries who are interested in animal welfare and open towards imported pork. Consumers would be willing to buy German pork, especially if the quality of German pork produced under higher animal welfare standards and the price are appropriate (slightly cheaper than domestic products). To address RQ3, on the basis of the available results it can be stated that the export potential for German pork produced under higher animal welfare standards is to be classified as rather low. This has several reasons. One reason is that the topic is of comparatively low relevance in the study countries and therefore the knowledge about this topic is insufficient. Furthermore, the interest of consumers to learn more about the production of meat is also rather moderate, as consumers do not like to associate meat with a living animal. Nevertheless, there is a segment in every country that is interested in animal welfare and imported pork. Therefore, this segment should be addressed specifically by developing and applying targeted marketing strategies. In the frame of RQ4, various marketing implications could be derived. A marketing mix seems to be the most promising strategy. Therefore, a combination of a positioning and differentiation strategy as well as a short-term adoption of cost leadership are recommended. This could be accompanied by information and education campaigns. At this point, it is advisable to consider and incorporate cultural factors. Linking pork produced under higher animal welfare standards with personal benefits, such as quality or taste, is one strategy that could be pursued. Thus, the results show that interest in animal welfare meat could be increased if it were linked to better quality or taste. Accordingly, at the current time, it is advisable to promote animal welfare meat as a premium product with some kind of differentiation strategy in a niche market. Here, the implementation of animal welfare as a sustainability aspect could be advisable on a global level. The results and recommendations should be used to improve Germany's position on the world market for pork produced under higher animal welfare standards. Nevertheless, it is important to note that the higher costs arising from the introduction of higher animal welfare standards cannot be compensated on the export markets. The transformation of an entire sector at the national level is not without impact on foreign trade. This aspect must be considered in the further development of livestock farming and accompanied by further scientific studies.
Keywords: export potential; pork; cross-national study; consumer research; animal welfare
