Lockdown Living: Europeans Eat Less Meat and a Glut Is Growing

When lockdowns closed the restaurant and catering industry in March, British wholesale meat supplierThe Sausage Man needed a way to keep business going.

The answer — an online shop to hawk its German bratwurst, frankfurters and hot dogs direct to consumers — may still not be enough to fully save the year. Though April sales neared last year’s level, the home-delivery surge is unlikely to replace lost demand from events like U.K.Oktoberfest festivals and Christmas markets, curbing European meat consumption.

“We were surprised by the success,” said Jorg Braese, sales director at the Kent, England-based company. But “of course, this year, it will never meet what it did before.”

While the U.S. has seenmeat shortages as virus outbreaks shuttered slaughterhouses, there’s a surplus in Europe, where health and environmental concerns have already weighed on demand. Now, closed restaurants, canceled festivals and empty soccer stadiums have obliterated out-of-home eating, curbing spending on burgers to fancy fillets. Grocery panic-buying also eased.

Social dining is crucial for the meat industry, with British Oktoberfest celebrations and Christmas markets alone accounting for half of The Sausage Man’s 7 million sausages sold each year.

The European Union’s pork demand will fall 0.6% to a seven-year low of 20.3 million tons in 2020, with beef and chicken consumption easing to the lowest in several years, according to the U.S. Department of Agriculture.

“What we’re hoping for and waiting for is this reopening of Europe where people can go out and have a dinner again,” said Jais Valeur, chief executive officer of Danish Crown Group, Europe’s top meat processor. “We’re still selling more in retail. But that doesn’t make up for the loss in the food-service sector.”

Although there’s good demand for mince meat for home cooking, sales for high-end cuts are sluggish. For beef in particular, that’s causing fancier fare to pile up in freezers or a delay in slaughtering, meaning an oversupply may last even after lockdowns end.

“This won’t be over very quickly,” Valeur said. “We can see signs that total meat consumption is down.”

The Covid-19 crisis has hit the meat sector at a time when some consumers are eating less amid concerns over thecontribution to emissions and deforestation, while vegan diets are growing in popularity. For example, schnitzel-loving Germany has become a vegetarianhaven, with 63% of residents looking to cut meat consumption, according to the USDA. The EU also wants to promote insects and algae as protein alternatives.

While virus cases havestarted to affect some European meat operations, they’re not on the scale as in the U.S., where plant shutdowns have stripped shelves and left some fast-food joints out of burgers. That’s prompted more American shoppers to give faux meat products a go.

Major beef exporter Argentina has seen shipments of high-quality cuts to Europe slump because restaurants, a key source of demand, have shut.

“Sales to Europe are virtually at a standstill; there’s only the occasional shipment,” said Miguel Schiariti, president of Argentine beef industry and trade group Ciccra.

European porkprices, which had been buoyed by booming exports to China, are now retreating, with pig carcass prices in France and Germany the lowest in a year. Things have got so bad that the EU proposed helping to fund storingproducts like beef and lamb to aid the market.

In the Netherlands, demand for dairy calves typically sold to the veal industry has plummeted, said Frans van Dongen, international affairs director at Dutch meat group COV. The meat often heads to fine-dining restaurants in Italy or kebab shops in Germany, which have all suffered from shutdowns.

French deli-meat federation FICT estimates that its members’ revenues has dropped 30% on average since the pandemic began. Fewer tourists buying French charcuterie could subdue sales even after lockdowns ease, and the economic downturn may curb consumer spending.

“We need a lot of time to have the same situation as before the crisis,” FICT President Bernard Vallat said.

There are some signs of optimism. The U.K. industry is pushing#MakeItSteak nights at home and cattle prices have started torecover from recent lows. The Scottish Association of Meat Wholesalers said the nation’s meat sales are down 10% from a year earlier, a smaller drop than at the start of the pandemic, while pre-packaged meats in France are faring well at grocery stores.

For The Sausage Man, restaurants and hotel sales are beginning to re-emerge, but the company plans to eventually sell products at retail stores as theshift in business fueled by the pandemic persists.

“With the virus situation, this could happen again,” Braese said. “We learned the hard way that to just be in one segment of the market is dangerous.”

— With assistance by Ellen Proper, and Jonathan Gilbert

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