The first six months of the financial year was a busy period for Friland. Headed up by Claus Hein the unit is working hard to improve on existing concepts and develop new ones. Hein took over as CEO of Friland A/S from Henrik Biilmann on February 1.
“My initial experience with Friland is that both our farmers and employees are extremely competent, and everyone is doing all they can to help us continue our positive trajectory. At Group level, too, my impression is of ever stronger collaboration across the organisation and I’m confident this will benefit both Friland and the Danish Crown Group even more in the future,” Hein says, looking back on his first three months as CEO.
Organic concepts advancing
Organic pig producers have had a difficult time in the last few years, as the organic premium has steadily declined, and some producers have even had to switch away from organic production. Yet, the tide seems to have turned in H1.
“Both current and former customers are beginning to place more orders, and we’ve also expanded our customer base. Exports are the prime driver of this growth, including Germany, France and North America,” says Hein.
Revenue from organic beef was improving, but the corona virus crisis has impacted this concept along with Danish Crown Beef.
The free-range pig concept remains strongly positioned in the Danish market, backed by distribution through Danish retailer Dagrofa and with strong exposure through 7-Eleven outlets, whose hotdog assortment is based exclusively on free-range pork.
Demand for free-range pork remains strong among Danish customers, but the concept is also increasingly attracting attention in export markets. However, the coronavirus outbreak put a temporary stop to that trade towards the end of the H1 reporting period. At the end of February, settlement prices for free-range pigs reached as high as DKK 16.70 per kilo, consisting of a high base price from Danish Crown and an acceptable free-range premium.
Free-range Limousine phased out
The first half-year also saw the Limousin concept being phased out.
“We were obviously very sorry to have to discontinue the concept due to unprofitability, but doing so means we can now focus more on the Friland free-range beef cattle concept, and we hope that a large proportion of the Limousin animals will form part of this concept,” Hein says.
Most of the meat from Friland free-range cattle is sold to independent butcher shops, but the 200-gram minced beef product being sold through the Danish REMA1000 supermarkets continue to do quite well. Revenue from the Friland free-range beef concept has been declining slightly, but as mentioned above an increase in the number of Limousin animals will hopefully contribute to driving an improvement in the second half of the year.