In terms of turnover, RosePoultry's share of the HKScan Group
is less than 10% but
of course, the company is highly significant to the Group. The company has a
strong primary production, about 100 contract producers,
some of them organic farms,
all very close to plants. Perhaps its most interesting associate is
Farmfood, a pet food company, whose other two owners are Rose Poultry’s
biggest Danish rival Danpo and BHJ, a subsidiary of The Lauridsen Group Inc.
Thomas Olander, managing director of Rose
Poultry from 2012 and former managing director of HKScan’s Pärsons left the
company. Not a good sign. In an interview he didn’t even give any reasons for his resignation.
One of Rose Poultry's major
problems is that that although breast
cuts and fillets have demand in the domestic market,
i.e. in Denmark, Sweden and U.K., legs and thighs sell poorly and hence Rose
Poultry tries to export them to Middle East and elsewhere in Asia, countries such as China and Malaysia.
Headline in the newspaper
from November is promising: 120 million chicken
leg to China. That would mean Rose
Poultry's full-year leg production. When reading on, it appears that some
barriers have been removed and Olander says that negotiations proceed step by
step but sees challenges as well. One is
left with the impression that nothing will happen for a while.
However, exports to the Middle East go strong but more importantly, Rose Poultry aims to
get a foothold in Sweden. Just after acquiring of
Rose Poultry, HKScan specifically stated that Swedish consumers use mainly
frozen poultry products and now there’s an opportunity for fresh products. And yet
in the 2011 annual report reads as follows (emphasis added):
In
Denmark and Sweden, the majority of the poultry products are sold as frozen
products. Accordingly, Rose Poultry aims to gradually accustom Danish and
Swedish consumers to using fresh poultry products, like consumers in Finland.
This will enable a broadening range of products for consumers under the
proprietary Rose brand as well as under private labels, and at the same time
help the company to stand out from competitors operating with imported meat.
At
least when it comes to Sweden, it looks as if this was a horrible misjudgment. I don’t know if there were fresh poultry products
on the Swedish market already a year or two ago, but certainly there are now. So Rose Poultry’s main problem is not the
familiarization of customers but brutal competition.
A page on advertising agency Bold’s site tells the situation explicitly. It is not clear whether or not the page is
fresh, but now supposing it is. Major Swedish competitors include Kronfågel and Guldfågeln,
each of which seems to have a full
batch of fresh, Swedish-origin
chicken products. The page shows how Rose Poultry's chicken products in Sweden are now marketed under Rose brand. It becomes
clear that Rose products are not unique in any ways. Agency’s aim is just to
design a packaging capable of competing against above-mentioned rivals. Another
main challenge they mention is the fact that one of the rivals’ arguments is
domesticity. A positive thing is that Rose product
line includes also legs and thugs, and not only the easy-to-sell breast cuts
and fillets. It is also nice to notice
organic products with KRAV marking in Rose product range.
HKScan has not yet told anything about the
success of Rose brand but instead keeps telling that Rose Poultry’s products sold in
Sweden under the Pärsons brand perform well.
No doubt, this is the case.
However, the problem is that Pärsons’ poultry products are just those
easy-to-sell fillets. Another problem is
that Pärsons is exclusively a topping brand which is also firmly stated on the company's website. Chicken
fillets are
ill-suited to the range.
There is still one thing to mention here: Rose Poultry’s all products are Halal slaughtered. This is from the
company’s web site:
According
to the law, the slaughtering must be observed by an abattoir employee in order
to ensure that the animals do not suffer harm. At the Danish abattoirs, these
employees are Muslims. When you begin to slaughter and every time there is a
break in the slaughtering, the Muslim employees say a prayer for himself, which
when translated goes like this: ”In God’s name. Allah is the greatest.”
We will discuss
HKScan later but on Friday, January 17th, we are going to look at Atria’s businesses. Business is business.
This is
Artoparto and here is my Disclaimer.
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