The revenue in Danish Crown’s beef business has increased by three per cent, and since New Year settlement prices to the farmer owners for their supply of cattle increased by more than 20 per cent on average.
DanishCrown Beef has hit the ground running in financial year 2020/21. Revenue was up by 3 per cent to DKK 4,677 billion, and in Q4 alone revenue was 10 per cent higher than in the same period of last year.
“We have an attractive and broad selection of products for the Danish market, where several of our concepts have been awarded two hearts by the Danish state consumer label Better Animal Welfare. For an extended period, we were challenged by weak sales to the foodservice market due to COVID-19, nevertheless we managed to consolidate our position during the past year, not least owing to our employees, who have delivered a tremendous effort during the pandemic,” says Finn Klostermann, CEO of Danish Crown Beef.
Danish Crown Beef recorded broad business improvement driven by strong operations in its two abattoirs in Denmark. In Germany, operations have recovered strongly from the three-week long COVID-19 winter shutdown of the abattoir in Husum, and focus is now on further developing the business. Strong innovative power at the processing facility in Sdr. Felding continues to contribute new products, and we have finally succeeded in generating growth in several export markets.
Furthermore, the hides producer Scan-Hide has successfully completed a turnaround. During the year, the company launched its SPOOR concept, which directly addresses the demand of quality-conscious customers for increased traceability in leather production.
“We are in a good position and have successfully developed our organisation, while maintaining our DNA, which is based on close dialogue with our customers. We now need to retain the momentum and continue the development. We must be a leader in sustainability to defend our place in the supermarket chilled cabinets. Danish consumers prefer Danish beef, and in that context our close collaboration Friland is a strength, but we remain conscious of consistently remaining competitive,” says Finn Klostermann.
The average settlement price to the cooperative owners has risen by more than DKK 4 per kilo on average from January until the financial year ended on 30 September. During the period, settlement prices across all categories were lifted by more than 20 per cent on average, with heifers recording the largest price increase of 36 per cent.
The positive development in Danish Crown Beef, and not least the strong results in the jointly owned processing companies Danish Crown Foods, KLS in Sweden, Polish Sokolów and ESS-Food allowed Danish Crown Beef to increase the supplementary payment to the cooperative owners from DKK 1.25 to DKK 1.30 per kilo for 2020/21.
“Being a part of a strong group truly generates value. Our share of earnings in the jointly owned processing companies makes a strong contribution to an excellent result in Danish Crown Beef. It also demonstrates the value of being a part of a cooperative company in which – in addition to our primary business – we get a share of the earnings generated downstream from the abattoirs and jointly open the doors to strong collaboration and trading partners both in Denmark and abroad,” says Karsten Willumsen, chairman of Beef Forum. He emphasises that the success of Danish Crown Beef would not have been possible without the support of the cooperative owners:
“The cohesion we have in Danish Crown, where the suppliers own the company, provides some great possibilities for developing the business in a direction that is aligned with the wishes of our customers and the consumers. Also, we must remember that a strong Danish Crown Beef ensures a high settlement price for beef and veal for all Danish cattle suppliers, and the more owners we are in Danish Crown, the stronger we become,” he says.