Balance Sheet 2020: Tönnies is market leader for organic meat
+17% growth for international locations // successful growth in first half of 2020 // Corona closure impacts plant in Gütersloh District
Rheda-Wiedenbrück, 1. April 2021 – The Tönnies group of companies developed stably in 2020 despite the restrictions caused by the corona. After a strong first half, the balance sheet for the second half of the year was, as expected, weaker. The corona-related closure of the plant in Rheda had an impact. Nevertheless, the company can look back positively on the year as a whole.
Clemens Tönnies, Managing Partner of the international group of companies sums up the year as follows: “The corona year 2020 was the biggest challenge in the history of our company and its employees. Whereas at the onset of the Corona pandemic in the first half of the year we were asked by the politicians to produce more and fill the supermarket shelves for the lockdown, the four-week plant shutdown in Rheda and subsequent production cutbacks due to the outbreak, which the employers’ liability insurance association now classifies as an industrial accident, negatively affected the Rheda balance sheet.”
Despite this localised phenomenon, Tönnies is satisfied with the balance sheet of the entire Group. “Our company consists of 29 production sites worldwide, 28 of which had a decent year,” says Clemens Tönnies. With the Corona prevention measures it has introduced, Tönnies is regarded worldwide as a blueprint for prevention in the food industry.
In 2020 the company recorded, internationally, annual sales of around 7.05 billion euros (- 3% compared to 2019). The stagnation is mainly due to the significantly lower pig price (on average 9.3% lower than in 2019) and the four-week plant shutdown at the Rheda site.
Changes in the pig market
The pig market had a real shake up last year, especially as a result of the gastro-lockdown. The export ban on pork to third countries due to the African swine fever in Germany also severely restricted exports. The price per kilogram of carcass weight varied between 2.02 euros and 1.19 euros last year, which naturally had a significant impact on the company’s sales.
“We need stable and adequate prices for agricultural producers in the long term, higher than in the last quarter,” says Dr. Wilhelm Jaeger, head of the Agriculture Division. “If we want to maintain agricultural production in Germany in the future, we need the acceptance of society at large. That’s why we are committed to the goals of Agriculture Minister Julia Klöckner’s Borchert Commission,” said Jaeger. “We have almost achieved our goal of establishing Husbandry System 2 as the standard in supermarkets. The starting date is June 2021.”
The organic market is growing
At the same time Tönnies is continuing to invest in open-front stables and the organic market. “We can see good growth potential in the organic segment, where we are already the market leader. If consumers demand more organic products as a result of a change in thinking, then we will deliver.”
In total, Tönnies processed 16.3 million pigs (-2%) at its German sites, with the decline related exclusively to the 4-week closure of the Rheda-Wiedenbrück site in Eastern Westphalia and the subsequent reduction in production. The company grew strongly at its other locations, particularly abroad. 4.5 million pigs were processed in Denmark, Spain, Great Britain and Poland (+17%).
Beef division: start-up of new Badbergen plant
The development in beef is particularly pleasing. The new Beef Competence Center in Badbergen has started production. Here, too, Tönnies is consistently implementing its concept of slaughtering and producing meat as a single biological unit. Demand for beef has grown steadily in recent years. “Our investments of around 85 million euros in the Badbergen Beef Competence Center are now paying off for the first time. The quality is top,” reports Ulrich Steinemann, managing director of the beef division. “We are bundling our volumes at a highly specialized, digitized plant which is setting standards worldwide. The automation rate is extremely high, so that fewer than 500 employees at the plant are able to carry the company.”
Even though the ongoing gastro-lockdown is impacting sales throughout Europe, burger patty production at the new Badbergen site is running successfully. As Tönnies supplies the cattle segment, especially in the foodservice sector, to European countries such as France and Great Britain, which are also affected by the lockdown, the division did not achieve any growth in 2020. At its German sites Tönnies processed a total of 420,000 cattle, including cutting. This is 4% less than in the previous year.
International growth at foreign locations
Internationally, Tönnies is pursuing its growth strategy in a very consistent manner. Investments in Great Britain, Denmark, France, Spain and Poland amounted to a three-digit million euros sum. In the UK alone, Tönnies is investing 25 million euros in its locations. With sales of over 500 million euros, Tönnies is the market leader there in numerous segments. “The British market is a growth market for us. We want to serve the growing consumer demand there with our quality meat,” says Frank Duffe, Tönnies international board member.
From an economic point of view, the production plants in Denmark, France and Poland are also developing very positively. In Spain, a letter of intent was signed for the construction of our own slaughterhouse in the Aragon region. In China, the foundation stone for the joint venture with the Chinese Dekon Group was laid a few weeks ago.
The veggie market is growing
Tönnies is also pressing forward with its growth course in the market for vegetarian and vegan meat substitute products. The company has bundled its activities in this segment with the consumer brands “es schmeckt,” “Vevia” and “Gutfried veggie” in an independent business unit of Vevia 4 You GmbH & Co. KG and an independent production plant in Böklund.
“Last year, we set up our own plant for vegetarian and vegan products at our headquarters in Böklund,” reports Maximilian Tönnies. “We are now expanding this capacity further and doubling the production area, since consumer demand and confidence in the products are growing sustainably.” Interest in vegetarian and vegan products has been growing for years. “We don’t see the production of vegetarian and vegan foods as competition for our meat products but as a market segment in its own right and as an excellent addition to our already very broad product portfolio,” emphasizes Maximilian Tönnies. “It was important to us to take the next step of an independent, separate production under the most stringent hygienic requirements. This is part of our sustainability agenda t30, with which we are sustainably developing the entire group of companies.”
Generation transition in full swing
With the t30 sustainability agenda adopted in 2019, the company is in the full process of developing into the most sustainable food company in the industry.
In addition to heading the zur Mühlen Group division, Maximilian Tönnies (30) is taking on more and more responsibility in the Group as a whole. “I am delighted that the transition to the next generation is in full swing,” says Clemens Tönnies (64). “Max is moving into the next generation along with our highly motivated management team.”