Meat

Background

Swiss consumer preferences boost domestic poultry production

According to a recent survey by the Federal Office of Agriculture, consumers in Switzerland have a clear preference for eggs and poultrymeat of Swiss origin and are willing to pay significantly more for them. This growing preference is seeing the domestic industry expand. What factors have played a role in this Swiss preference for home-produced products and how does this affect the Swiss laying hen and broiler sector?

The share of domestically-produced poultrymeat and eggs sold on the Swiss market has gradually risen in recent decades as the country’s consumers have increasingly expressed a preference for locally-produced food. According to the recent survey, three-quarters of consumers prefer locally-produced eggs and more than half the respondents prefer eating poultrymeat produced on Swiss soil. Supporting Swiss farmers is stated as a major reason, along with the fact that animal welfare, the environment and the superior quality of Swiss products are important to them. And the Swiss are also willing to pay up to 3 or 4 times the price of imported products for their perception of high quality and animal-friendly Swiss-produced products.

Swiss consumers value the so called ‘Swissness’ of products.” – Dr Gianna Lazzarini

Types of consumers

According to Dr Gianna Lazzarini of the Organic Agriculture Research Institute FiBL Switzerland, many consumers in Switzerland are concerned about the origin of food products, their ingredients and labelling, and are willing to pay more for better quality. But there are also price-sensitive consumers whose buying behaviour is mainly price driven. As Dr Lazzarini explains, “Swiss consumers value the so called ‘Swissness’ of products. The general perception is that products from our own country are of superior quality. This halo-effect is very strong.”

“Of course, there is not just one type of consumer in Switzerland,” agrees Cornel Herrmann of the Federal Office for Agriculture (FOAG). “There is a market for cheaper, imported eggs in Switzerland.” Compared with Swiss eggs, the price of imported eggs is low but the housing restrictions are not as strict as those under Swiss regulations. “The number of price-sensitive consumers in Switzerland is much smaller than in most other countries. Swiss consumers are very interested in organically produced and high quality products and are willing to pay a considerably higher price for organic products.” In 2018 in the Swiss retail market a fresh organic egg cost 3 times the price of an imported egg, when consumers paid 81 cents and 24 cents per egg, respectively.

Most Swiss farms are relatively small scale. Add to that the challenges of mountain farming and a higher cost price needs to be offset in retail. Photo: Henk Riswick
Most Swiss farms are relatively small scale. Add to that the challenges of mountain farming and a higher cost price needs to be offset in retail. Photo: Henk Riswick

Poultry imports are cheaper

Most imported products tend to be significantly cheaper than those produced on Swiss soil. The agricultural sector notes that these higher costs are due to the fact that Swiss producers have to work to more stringent legal requirements than their foreign competitors, particularly where animal welfare and housing systems are concerned. Production prices are also generally higher than those across its borders. Swiss tariffs on food and beverage imports are designed to protect local farmers who generally have smaller farms than international competitors.

...poultrymeat and egg market depends on imports, so a limited quantity of these products can be imported at a lower tax rate.” – Cornel Herrmann.

However, appropriate contingency plans have been developed for the poultry market because Switzerland cannot meet the country’s demand just from its domestic production. “Import tariffs are important for the Swiss agricultural market,” says Cornel Herrmann, “but the poultrymeat and egg market depends on imports, so a limited quantity of these products can be imported at a lower tax rate.”

Stability in the sector is fostered through a contract system along with close cooperation between producers and buyers. Only what the market needs is imported. On average 37% of eggs is imported. “In the egg and poultrymeat market we can regulate the imported supply. The poultrymeat and egg markets are fully integrated along the value chain. Since egg production can be easily planned and regulated, and producers and buyers work together closely, the number of imported eggs can be adjusted in line with the expected domestic ­production,” Hermann explains.

Changing market

The market is changing. “The sales of barn eggs has decreased in recent years,” Hermann continues, “while sales of organic and free-range eggs are rising. This has also been influenced by Switzerland’s 2 big retailers who largely dominate the market. One of them has announced plans to be completely barn-laid-egg free in the shell egg segment a few years from now. This has surely had an impact on the production system.”

Country reports:
Takes a look at the poultry industry in countries around the world.

Animal-friendly housing

Minimum requirements for the housing of laying hens and broilers are specified in federal legislation. In addition, through the use of subsidies, federal animal welfare programmes specifically promote animal-friendly housing systems and regular access to outdoor areas. This has made the use of outdoor systems for laying hens popular. Organic poultry farmers are paid 42 cents per egg, farmers who keep free-range and barn-housed flocks earn 22 cents per egg. “Switzerland had already implemented a ban on conventional cages in 1992 – 20 years before the European Union – and did not allow enriched cages either. A very high level of animal welfare in combination with a high percentage of free-range layers are among the main reasons why Swiss consumers’ prefer domestically-produced poultrymeat and eggs,” says Andreas Gloor of Aviforum. “The stocking density for broilers is low and animal-friendly housing systems are used. Generally, 92% of layers and 97% of broilers are kept in animal-friendly poultry houses with wintergardens.”

An overview of the Swiss egg market showing the clear preference for domestic produce. Infographic: Federal office of Agriculture
An overview of the Swiss egg market showing the clear preference for domestic produce. Infographic: Federal office of Agriculture

click here to enlarge image

Consumers have faith in the certification bodies

Animal welfare is definitely an important factor in the purchasing decisions made by many Swiss consumers. According to Dr Gianna Lazzarini, heuristics play a significant role in purchasing behaviour. “It’s more a matter of assuming there is good animal welfare than necessarily knowing what the differences are between labels when it comes to animal welfare.” Research carried out in the late 1990s1 and in 20092 showed that Swiss consumers do not know much about the differences between organic food and food from other production systems. Organic consumers only have a vague idea of the differences between organic and non-organic products. There was little in-depth knowledge about the details of organic standards but there was a general feeling of faith in the control system behind the standards, particularly when the study participants thought that a label referred to a Swiss standard. “Just like most consumers in other countries, Swiss consumers don’t know the exact criteria but they have great faith in the Swiss certification bodies when they buy organic products,” Dr Lazzarini explains. Plus, their picture of idyllic Swiss farms with a few animals grazing in mountain pastures is reinforced and heavily promoted in the advertising of major retailers. The fact that small farmers are generally more visible to consumers – as farm shops, farmers’ markets as well as through farm visits (all of which bring farm life closer to them) – also plays a role.

Swiss farms with a few animals grazing in mountain pastures is reinforced and heavily promoted in the advertising of major retailers.” – Dr Gianna Lazzarini.

Support for domestic farmers

Swiss consumers are inclined to support and protect their own farmers. “There is a general consensus that it is important to support our own farmers. If it were a free market Swiss farmers would not stand a chance, we are all aware of that. Of course they would somehow adapt to the market but this would probably change our whole agricultural system as we now know it. So in Switzerland it is considered to be right to buy locally-produced products and many Swiss consumers are willing to pay a higher price for them,” says Dr Lazzarini.

“A mentality of ‘the cheaper, the better’ has never been a big issue in Swiss culture,” says Cornel Herrmann. “Low-price supermarkets are still the underdogs in this country.” He also noted the small size of Swiss poultry farms as a reason why Swiss consumers pay a higher price. In Switzerland no more than 18,000 laying hens are permitted in free-range and barn farms. The maximum number permitted in organic farms is 4,000 laying hens. An initiative opposing intensive large-scale livestock farming will go to a nationwide vote in a few years. Herrmann describes the issue as ‘negatively tainted’, as many Swiss citizens think that large-scale farms do not suit Swiss culture. This will inevitably result in higher prices. The outcome of this initiative therefore remains unclear. “The Swiss consumer generally has more spending power, however. The average Swiss consumer spends only 6.4% of their gross income on food,” says Andreas Gloor.

Poultry marketing campaigns

An effective strategy in supporting the Swiss preference for local products is creating general awareness about the benefits of domestic production. Swiss meat and dairy products are promoted by both large retailers and private organisations, such as the umbrella organisation of organic farmers, Bio Suisse, and other agricultural organisations. As a result the Swiss repeatedly see commercials that keep Swiss products in mind. In supermarkets, for example, imported eggs are always placed on the lowest shelves, while organic and locally-produced products are positioned at eye level. “Also the packaging of Swiss eggs and meat products is much more appealing and natural looking than the often basic, plastic packaging of imported eggs and meat. Imported eggs are mostly barn-laid. Imported eggs from caged hens must be appropriately labelled: ‘produced in caged systems prohibited in Switzerland’. Retailers, even the discounters that are not originally Swiss, have adapted to this and actively promote Swiss products,” says Cornel Herrmann. The Swiss flag is used as an easily recognisable symbol on all agricultural products from Swiss soil. “That immediately increases trust, as the Swiss are by nature proud of their country.”

Not self-sufficient

Domestic production provides for 64.5% of poultrymeat, 63% of eggs and egg products and 78.7% of shell eggs, leaving aside egg products consumed in Switzerland. “The share of domestically-produced poultrymeat and eggs is estimated to be more in retail – around 80% – and less in the hospitality and food industry,”says Andreas Gloor of Aviforum. Of all domestically-produced eggs 17% of those produced on Swiss soil are organic, as is 2% of all the poultrymeat. For comparison, 5.1% of the eggs produced in the United States are organic, while in the United Kingdom this is approximately 2%. Free-range production ­accounts for 7.9% of all broilers (including 2% organic).