Covid-19 brings opportunity to red meat sector, says QMS
Volatility in household spending patterns caused by the Covid-19 pandemic has created opportunities for the red meat sector, according to the latest market commentary by Quality Meat Scotland (QMS).
The introduction of social distancing measures due to the global coronavirus pandemic, is causing a significant economic rebalancing, resulting in volatility in household spending patterns.
Although presenting challenges, this also offers some opportunities for the red meat sector, according to Iain Macdonald, senior economics analyst with QMS.
MacDonald says restaurants had faced a reported year-on-year decline in bookings at UK restaurants of around 30%, even before guidance was issued to avoid restaurants, clubs and bars and switch to home working on grounds of public health.
“The closure of schools from Friday 20th March will only add to this pressure,” said Macdonald.
On the other hand, the potential for a two-week period of self-isolation has seen many households evaluate food stock levels in cupboards and freezers, resulting in unusually large purchases of long-lasting and versatile goods.
“Going forwards, the reduction in eating-out opportunities may help sustain a boost in demand for steaks and other high-end cuts like lamb rack and pork fillet.”
“In the red meat sector, this has reportedly seen the reduction in demand from foodservice and export, the latter facing challenges in part due to delays at EU borders, offset by increased orders from independent and multiple retailers.
“Products like mince, roasting joints and burgers are likely to have increased in popularity as a consequence.
“Going forwards, the reduction in eating-out opportunities may help sustain a boost in demand for steaks and other high-end cuts like lamb rack and pork fillet.
“Ready-to-cook meat dishes are also likely to do well in such an environment. Equally, however, there is also likely to be some trading down to the cheaper cuts by budget-constrained households.”
Furthermore, Government intervention to support family budgets could also help underpin spending on food, such as the £70m Family Food scheme announced by the Scottish Government.
MacDonald continued: “Once the short-term spending splurge to re-stock kitchens comes to an end, the red meat sector may prove to be more resilient to the economic downturn than other parts of the economy if the need to maintain a healthy balanced diet leads to an increased share of budgets being allocated to red meat.”