Annual financial report
Tönnies masters crisis year 2021 and drives transformation process
Rheda-Wiedenbrück, 27. April 2022 – The Tönnies Group can look back on an eventful 2021. Despite a decline in sales, the family-owned company from Rheda-Wiedenbrück recorded qualitative growth and increasing market shares and considers itself well equipped for the future. To this end, Tönnies is continuing to drive forward the transformation process of the entire chain. The Group’s 50th anniversary last year was marked by the end of work contracts and the „t30“ sustainability agenda.
The entire meat and sausage industry had to contend with a drop in sales in 2021. This development also left its mark on market leader Tönnies. The Group’s sales fell to around 6.2 billion euros. This was mainly due to consistently low producer prices and a sharp drop in animal numbers in Germany. The industry was also impacted by Corona and African swine fever (ASF) in 2021. As a result of the pandemic, restaurants, cafeterias and the like were closed for weeks or only opened to a limited extent, and wholesale companies were massively affected. In addition, soccer stadiums remained empty and large family celebrations and weddings were cancelled. As a result, meat and sausage consumption automatically declined.
As part of the „t30“ sustainability agenda, Tönnies is focusing on circular economy and the careful use of resources. This also includes holistic marketing of animals. However, ever since it first appeared in a wild boar in Germany, ASF has ensured that cuts such as snouts, tails or paws cannot be exported to Asia. An adequate sales market and thus important value-added potential are missing.
„The year 2021 was not satisfactory for us,“ says Clemens Tönnies, Managing Partner of the Tönnies Group. Despite the difficult year, however, the family-owned company was able to hold its own and gain market share. „And we are absolutely convinced that we have set the course for a trend reversal with the initiated transformation process and the qualitative growth towards more animals from higher husbandry systems.“ Today, for example, around 50 percent of all animals at Tönnies come from higher-legal forms of husbandry thanks to expanded animal welfare programs.
Paradigm shift to be continued consistently
However, the course set for the future also includes the end of contract labor in the meat industry as of January 1, 2021. A paradigm shift for the entire industry – and a tour de force for companies like Tönnies. „However, we are not shedding any tears for the work contract. As an industry, we held on to it for too long. That was certainly a mistake. As the market leader, we should have driven the change earlier,“ says Clemens Tönnies self-critically. That’s why the Group is also continuing to systematically drive forward the transformation process of the entire chains.
Tönnies now relies on the former service providers only in the area of manpower placement. But the corporate group will gradually transfer this, too, into its own structures. „We want to leave that behind and get on our own feet,“ emphasizes Martin Bocklage, Managing Director Human Resources. To this end, the company has already set up and established several placement offices in Serbia and Poland, with more to follow in Romania, among other places. Tönnies has also pushed ahead with the generally binding collective agreement.
Project with WWF on freedom from deforestation along the supply chains
In parallel, Tönnies is also continuing on its chosen path of the „t30“ sustainability agenda. „We want to produce food sustainably and strengthen farming in Germany,“ says Dr. Gereon Schulze Althoff, Head of Quality Management and Sustainability, clarifying the strategy. In order to be economically successful, sustainability and environmental protection are indispensable for the group of companies. Thus, despite the difficult market situation, Tönnies invested a three-digit million amount in sustainability and automation last year. „Efficiency and sustainability are not contradictory. It is our task to reconcile security of supply with animal welfare, environmental protection, social responsibility and a fair price for the entire chain,“ explains Dr. Schulze Althoff.
In this context, the Tönnies Group is working together with the environmental organization WWF, for example. The project group is concerned with deforestation-free soy supply chains. „We very much appreciate the efforts of WWF and other NGOs in this area. We are highly motivated to work on procedures and rules to protect valuable ecosystems such as rainforests and savannahs,“ says Thomas Dosch, head of Tönnies‘ capital office. „We know that we, as a business community in Germany, must unite to do even more to combat deforestation. We have set out to do so.“
Joint process with feed producers
„The complete abandonment of soy from rainforest areas and valuable savannahs in South America from 2023 is a significant contribution to saving important, ecological resources for the world and the climate,“ explains Dr. Wilhelm Jaeger, Head of Agriculture at Tönnies. „The positive signals from the feed industry confirm our decision.“
The aim is for German pigs supplied to Tönnies to be fed largely on domestic protein feeds and, in the case of soy, only on certified components that do not come from deforested areas. To implement this goal, Tönnies has initiated a joint process with feed producers. Their involvement is central to the success of the project. They import the soy-based protein feeds that are part of domestic feed mixtures in Germany. The exclusion of soy from tropical forest areas is one of several measures under the Tönnies Group’s „t30“ sustainability agenda.
Energy consumption declines despite additional sites
In order to further minimize its own carbon footprint, the Tönnies Group is also working on its sustainable orientation in other areas. For example, Tönnies has already been able to reduce petroleum-based packaging materials by around 35 percent and switch to recyclable monomaterials in many areas. In addition, the company is pushing ahead with e-mobility and this year is investing a double-digit million sum in the expansion of its own power generation with renewable energies. Further facts and figures can be found in our t30 update.
The company’s management is optimistic and confident about the future. The Group’s diversity is a major advantage. Tönnies is no longer just a slaughterhouse and meat processing plant, but also a food producer. In addition to meat and sausage, the family-owned company produces sauces, soups and very successfully vegetarian and vegan products.
Evidence of the success of this strategy can be seen in the group’s recent successes and awards: Tönnies was able to double its organic volumes. And the successful Petfood market segment with „Petcura“ in Meppen is also being further strengthened and expanded – here Tönnies succeeded in entering the market overseas in the leading specialist food markets. In addition, according to recent GfK surveys, the Gutfried brand is the fastest-growing brand in the poultry meat segment and, for the first time, the fastest-growing alternative sausage brand. For this reason, Lebensmittelzeitung also named Gutfried Fleischwurst the „Top Brand“ of the year in the boiled sausage segment for the fourth time in a row. The same applies for the first time to the vegan „Wie“ series in the „sausage substitute“ segment.