Marketing Presentation by

Bill Joyce

HCC Annual Conference, Llandudno

12th November 2009

Climate ChangeThe Marketing Perspective

•What do lamb consumers really think about climate change and carbon footprints?

•Why do consumers buy lamb and are all consumers the same?

•Let’s ask the consumer

4

4

Carbon footprint/Climate Change

Not important

Brain says ‘yes’; should do in future – occasionally, will now think about it

Good idea but only if everyone does it

My concern is the freshness of it, not necessarily the carbon footprint. I think big industry plants have more to do with this subject than whether the meat came over on a boat. It’s not a big concern for me. (Male, 25-34, Wales)

That should be important [but isn’t] if it’s coming from New Zealand. Perhaps I should be considering it. The environment is important. When I go to the butchers next time I’m going to wonder where it’s come from. (Female, 35-44, Home Counties)

if I had another [important factor] it would be UK sourced, more than carbon footprint. (Female, 45-54, Midlands)

Lamb Demand Drivers Ranking

Base: All nowadays lamb purchasers (629)

1. Taste 11.7

2. Tenderness11.0

3. Leanness10.0

4. Price 9.5

5. Colour 9.4

6. Right size 8.6

7. Quality mark / stamp 7.6

8. Country of origin 7.6

9. Traceability 7.1

10. Seasonality 6.5

11. Organic 5.8

12. Carbon footprint 5.2

1. Taste 11.5

2. Tenderness10.7

3. Price 10.6

4. Leanness 9.9

5. Colour 9.3

6. Right size 8.6

7. Country of origin 7.6

8. Quality mark / stamp 7.5

9. Traceability 6.9

10. Seasonality 6.4

11. Organic 5.6

12. Carbon footprint 5.3

Special occasion Everyday

Source: Beaufort Research

6

Demand Drivers Ranking: Lamb for a ‘Special Occasion’

Taste 1 1 1 1

Tenderness 2 2 2 2

Leanness 3 3 4 3

Price 4 4 3 6=

Colour 5 5 5 4

Right size 6 6 6 5

Quality mark/stamp

7 8 7 8

Country of origin 8 7 8 6=

Traceability 9 9 9 9

Seasonality 10 10 10 11

Organic 11 11 11 10

Carbon footprint 12 12 12 12

- Shoppers at different supermarkets -

Base: All nowadays lamb purchasers who shop at each supermarket for meat (base sizes in brackets)

(260) (186) (161) (59)

7

Taste 1 1 1 1 1

Tenderness 2 2 2 2 2

Leanness 4 3 3 3 3

Price 3 4 5 5 4

Colour 5 5 4 4 5

Right size 6 6 6 6 6

Quality mark/stamp

7 8 8 8 7

Country of origin 8 7 7 7 8

Traceability 10 9 9 9 9

Seasonality 9 10 10 10 10

Organic 11 11 11 11 11

Carbon footprint 12 12 12 12 12

- Age and Social Class -

16-34(148)

Demand Drivers Ranking: Lamb

Base: All nowadays lamb purchasers in each category (base sizes in brackets)

35-54(243)

55+(228)

AB(172)

C1(457)

8

Assuming price and appearance was same, choose Welsh or New Zealand Lamb?

2837

20

14

12

8

5750

72

South Midlands Wales

Welsh Lamb

New ZealandLamb

Makes nodifference

By Region

(252) (259) (118)

Base: All nowadays lamb purchasers in each region (base sizes in brackets)

HCC STRATEGIC MARKETING GOALS

What we are trying to do:

To position Welsh Lamb, Welsh Beef and Welsh Pork

as premium brands To diversify Welsh Lamb, Welsh Beef and Welsh Pork

into premium market sectors internationally

MARKETING CONTEXTLamb Prices

39816

39823

39830

39837

39844

39851

39858

39865

39872

39879

39886

39893

39900

39907

39914

39921

39928

39935

39942

39949

39956

39963

39970

39977

39984

39991

39998

40005

40012

40019

40026

40033

40040

40047

40054

40061

40068

40075

40082

40089

40096

40103

40110

40117

40124

40131

40138

40145

40152

40159

40166

40173

60

80

100

120

140

160

180

200

220

Welsh SQQ Lamb prices

200720082009

Source: HCC

p per kg lw

MARKETING CONTEXTWhere Welsh Lamb is ConsumedPercent – source: Red Meat Action Plan

Wales Rest of UK Outside UK0

10

20

30

40

50

60

70

WHAT HCC MARKETING DELIVERS

An integrated advertising, promotion and public relations campaign with strong brand identity both in the UK

and abroad

2009 Marketing ProgrammeWelsh Lamb 48 Sheet Poster

2009 Marketing ProgrammeWelsh Lamb – Press & Magazines

Advert Loose Insert Recipe Leaflet

2009 Marketing ProgrammeWelsh Lamb – Jamie Magazine

TELEVISION

• Powerful medium for delivering brand recognition in target markets - People watch TV ads even if they claim they don’t!

• Influences trade to stock Welsh Lamb

• But needs support and reinforcement of other media to be most effective

2009 Marketing ProgrammeTV ADVERTISING Matthew Rhys voiceover

2009 Marketing ProgrammeONLINE – EatWelshLamb.com

2009 Marketing Programmee-newsletter – November 2009

WORKING WITH RETAILERS

Total Butchers12%

All Others5%

Supermarkets82%

Retailer Share of Lamb Volume Sales UK 52 w/e 28/12/08

Source: TNS Worldpanel

2009 Marketing ProgrammeOn Pack Competitions - Waitrose

On Pack Label Microsite

2009 Marketing ProgrammePoint of Sale

Spring Autumn

EDUCATION AND PUBLIC RELATIONS

• To promote the health benefits of eating red meat as part of a balanced diet.

• To influence young people to try/cook Welsh Lamb and Welsh Beef

• Encourage public authorities to use Welsh meat• Influence the influencers – e.g. Food journalists• Face of Welsh Lamb to reinforce provenance/PGI

BUILDING BRAND REPUTATIONIn Restaurants

“ I find Welsh Lamb is the tastiest – maybe because they have so much lush green grass on which to graze. Whatever it is, the farmers are doing something right”.

Anthony Demetre

Wild Honey - Mayfair

Arbutus – Soho

(Both Michelin Star

Restaurants)

RESULTS

• Does Advertising and Promotion work?

• What are we measuring?

Recognition of Lamb Origin in the Meridian Advertising Region (Southern England)

Source: MarketTools

Consumer opinion of Welsh Lamb

Meridian TV Area (Southern England) measurement of response to advertising

Source: MarketTools

(% Agreeing) Oct 05 Oct 06 Oct 07 Oct 08 Oct 09

Welsh Lamb is a brand I can trust

56 59 70 74 75

Welsh Lamb is a brand for me

36 48 61 64 66

Makes me more likely to buy Welsh Lamb

33 40 59 57 59

I would choose Welsh lamb over lamb from

other countries

21 25 43 50 45

The message is believable

66 71 77 78 84

EXPORTSOne third of all Welsh Lamb salesand growing

• In 2008 Welsh meat exports were worth £108 million on ex works basis of which £91 million was Welsh Lamb

• Main markets: France, Italy, Belgium, Germany and Spain

• New markets (Welsh Lamb sales in last 2 years): UAE, Hong Kong and Singapore (£200,000+ in 2008)

• Exports growing strongly with exchange rate as main driver

INTERNATIONAL TRADE EXHIBITIONS

ANUGA Exhibition,

Germany

SIAL Exhibition, France

WELSH LAMB ABROADGULFOOD 2009 - sampling

WELSH LAMB ABROADIn-store sampling Dubai

WELSH LAMB ABROAD Italy and France

WELSH LAMB ABROADIn-store TV Advertising in France

WELSH LAMB ABROAD Supermarket in Belgium

Launch of Welsh Lamb at Cactus SupermarketsLuxembourg – November 2009

WELSH LAMB ABROAD

WELSH LAMB ABROADCactus LuxembourgRecent success in a new market

• Cactus is the leading retailer in Luxembourg with approx 50% market share.

• Cactus is a high quality retailer selling premium and differentiated products.

• Cactus was selling a mixture of NZ and UK lamb without communication and clarity of origin.

• Cactus is now committed to selling properly branded Welsh Lamb

WELSH LAMB ABROADCactus Luxembourg

Marketing Programmeo15 minute documentary exclusively about Welsh Lamb

on Luxembourg national television in prime time.oDedicated webpage on Welsh Lamb & link to

documentary on Cactus website : http://www.cactus.lu/page.asp?id=2182&langue=FR

oPOS for Welsh Lamb installed at store level. oAll Welsh lamb labelled on pack (Welsh Lamb logo and

PGI)o In-store TV advertising for Welsh LamboMassive jump in awareness of Wales and Welsh Lamb in

Luxembourg.

Cactus - Luxembourg

• In store television advertising

Cactus LuxembourgWelsh Lamb display

OUTLOOK

• Lamb demand has been resilient during the recession. By reason of reduced

supplies, ‘feelgood’ buying, use of cheaper cuts and supermarket promotions.

• Major retailers will continue to expand share of UK lamb market at expense of

independent butchers while overall lamb market will decline

• Lamb roasting cut performance likely to improve along with the economy

• Lamb at retail in the UK is now expensive and consumers resistant to paying

more

• However, tight supplies and export demand are likely to maintain lamb returns

• Exchange rate?

Thank you.