Generating worthwhile profits from the meat business is not a simple matter. Primary meat production is an expensive business and meat processing is traditionally complex and resource-intensive. Opportunities to add value, especially in the fresh meat sector, have also been limited. Today’s meat processors are facing greater challenges than ever as they attempt to retain profit margins that are already under pressure. Fortunately, recent technological developments are helping businesses to meet those challenges head on, both by cutting costs and developing innovative new products that are able to command a price premium.

The prevailing food industry view of meat processing has been one of a sector operating on relatively low margins, and often lagging behind the rest of the industry in terms of investment in new technology. This view may be unfair, but there is little doubt that it has its basis in fact across much of Europe. While some countries, such as Germany and Denmark, have developed relatively advanced meat processing industries, elsewhere the picture is more mixed. Furthermore, the market for meat products is not one where significant growth is expected, although it remains substantial. According to a recent Food For Thought report, the total West European fresh meat market was worth €139.0 billion in 2010, with the ten biggest processors supplying almost a quarter of that market. But the total market is forecast to decline annually by an average 0.15% from 2010 – 2013. This is already a challenging trading environment and it is made progressively more difficult by a variety of health and environmental concerns surrounding meat production.

Meat, especially red meat, is not widely regarded as a healthy food by consumers. Concerns over the effects of saturated fats in the diet, and the publicity given to evidence of links between red meat consumption and increased rates of heart disease and colon cancer have helped to create this impression. The BSE crisis of the 1990s and outbreaks of meat-related food poisoning caused by pathogens like E. coli O157 have also contributed to the negative health image. Animal welfare concerns have come to the fore, not helped by widely publicised footage of animals being ill treated by abattoir staff in the USA and elsewhere. Although welfare standards in Europe have steadily improved over recent years, concerns remain. Many campaigners now believe that the entire meat production industry is unjustifiable on moral grounds, however high the welfare standards may be. Environmental objections to meat production are also gaining ground. A UN Food and Agriculture Organisation (FAO) report in 2006, Livestock’s Long Shadow- environmental issues and options, stated that the global livestock sector is responsible for 18% of all greenhouse gas emissions, while occupying 30% of the ice-free land area on the planet and 70% of the agricultural land. It also uses a lot of fresh water and creates significant levels of pollution. Statistics like these make it easy to see why many environmental campaigners would like to see the end of large-scale meat production, believing that the industry can never be sustainable.

These concerns may or may not be justified, but they contribute to the multiple challenges faced by meat processors as they battle to remain profitable. But the industry is not about to go down without a fight and is developing the tools to help it weather stormy economic waters. These fit roughly into two categories, cost cutting measures and developing new sources of revenue.

Cutting costs

The lean machine

The concept of ‘lean manufacturing’ has its origins in the production systems developed by Toyota for its car production operations. The principles have since been developed and applied to many other manufacturing sectors, including the food industry. During the last decade, adoption of lean manufacturing by food manufacturers has been growing fast and many meat processors are now beginning to realise the benefits it can bring. Lean manufacturing is all about identifying and reducing all types of waste whilst focusing clearly on providing the consumer with a product that meets expectations as closely as possible. The aim is not just to eliminate the waste of resources, but also of human effort, time, space and equipment. The central core of the idea is to look at the whole supply chain for a given product and identify which steps are essential to deliver the product demanded by the consumer. In other words, to separate the value-creating steps from the actions that simply incur cost. Once those value-creating steps are identified, they can be reassembled into a smoothly flowing production system with the minimum of interruptions and distractions. The next step is to set a production rate that closely matches customer demand, so that product shortages or overstocking can be avoided. Couple that to a continuous improvement approach and it is possible to create a production process that is highly efficient, yet also flexible and responsive to changing consumer preferences.

Like all the best management systems, lean manufacturing sounds like simple common sense, but there is rather more to it than just trying to be more efficient. For example, a study of red meat processing carried out by Cardiff Business School in the UK in 2004 found a 25% "productivity gap" between traditional meat cutting rooms and "advanced" facilities operating lean principles. This is significant by any standards and shows what can be achieved. A 2007 report compiled by the Food Chain Centre (FCC), also in the UK, identified similar potential savings throughout the meat supply chain, giving details of nine "whole chain projects" covering beef, lamb and pork products. The FCC report showed that for 95% of the elapsed time between the animal leaving the farm and the consumer buying the product – not including any meat maturation time – the product was either involved in operations that added no value, or was simply inactive. Apparently, this is not as bad as it first appears when compared to other manufacturing sectors, but it does illustrate how much scope there might be for savings. If just a fraction of the 95% could be turned into value-adding steps, the cost benefits would be substantial. The report identified opportunities for improvement all through the supply chain. For instance, primary producers could reduce the number of animals arriving at slaughter not meeting the required specification. Processors could improve the efficiency of cutting rooms and packaging operations, and retailers may be able to increase ‘on-shelf’ availability of products for consumers.

The automated meat plant

Many meat processors are already embracing lean principles and are benefiting accordingly, but once potential efficiencies have been identified, there is still a need for the tools that can turn them into reality. One possible solution now attracting a lot of attention among meat processors is automation and the use of robots to perform some traditionally manual operations.

Many of the tasks involved in slaughter and processing operations are repetitive and physically demanding, yet also require skill and training. Furthermore, working conditions can be uncomfortable and dangerous, with a risk of injury. This can lead to difficulties in recruiting, and retaining, suitable skilled labour. In relatively isolated countries like New Zealand, where there is a big meat industry, but a serious shortage of skilled staff, this has already led to the development of advanced automation systems for processing lamb and other meats. In Europe too, the difficulty of attracting suitable staff to work in meat plants is becoming a problem, especially in comparatively prosperous countries like Germany and Scandinavia. Using more robots may be one answer to rising labour costs and recruitment problems. An automated production line can also give efficiency and quality benefits by performing tasks much more quickly and consistently than humans. Automation can reduce waste and increase output and there may also be less obvious food safety benefits, as a major source of microbial contamination (human operators) is largely removed from the production process. These advantages are a good fit with the principles of lean manufacturing.

Large scale slaughtering and processing operations have been quick to see the benefits of automation. Pork producers in particular have adopted the technology, especially in countries with a large pig rearing industry to support investment and research, such as Denmark and the Netherlands. This has allowed the development of purpose-built robots to perform many of the tasks previously undertaken by skilled workers. For example, Dutch company MPS meat processing systems has developed its F-line automated evisceration system of modular robots for pig processors. Each module can be fitted with a different tool to carry out a specific task, such as belly opening and neck cutting.

Not only does the system eliminate a good deal of skilled manual labour, MPS also claims that yields are increased by more consistent operation and that microbial contamination is reduced significantly. This is partly because the pig’s organs are removed in one piece, keeping the digestive tract intact, but also because the tools fitted to each robot are rapidly cleaned and sanitised between each carcass, reducing cross contamination. The system is designed to process 200 - 1,300 pigs every hour and MPS says that the payback period on the initial investment could be less than two years.

Although such large scale automated lines are not new, advances in robot technology are making automation a more realistic proposition for smaller businesses. The development of smaller, cheaper and more flexible modular robots fitted with improved vision systems and simpler programming is making it much easier to integrate robots into existing production lines. Hygienic covers and hoods for standard industrial robots allow them to be used in clean areas, where specially designed units would have been required before. There has also been a good deal of progress in designing new grippers that allow robots to handle irregular and non-rigid food products. For example, the German Institute of Food Technology (DIL) has developed a hygienic vacuum gripper that can handle meat products without its effectiveness being compromised by a build up of product residue and liquid. The new gripper can be cleaned by immersing it in a bath and using the vacuum pressure to flush out residues. Multinational meat processing equipment supplier Marel has developed a Robot Portion Loading System (RPLS) in collaboration with Swedish robot manufacturer ABB. The RPLS utilises advanced vision technology to recognise the position and orientation of individual portions on a conveyor. This, plus the mechanical gripper fitted to the system, allows it to pick and place meat products like burgers, bacon, boneless meat portions and cooked meats directly into trays. Using robots to pick and place such non-rigid and irregular products had previously been problematic.

Specific robots for food applications

Many of the robots currently being used in the food industry are adaptations of general-purpose industrial models. But a project currently in progress at Sheffield University in the UK is designing robots specifically for food applications. The three-year government-funded GRAIL project aims to produce a small lightweight robot that can carry out the tasks of a human operator, but is low cost, easy to programme and hygienically designed. The first prototype is constructed from stainless steel and has a jointed arm with four degrees of freedom, it is currently being tested for pick-and-place operations, but will be made extremely versatile by the development of an innovative graphical programming interface. Costs are kept low by sacrificing accuracy. Industrial robots being used in engineering applications are capable of working within very fine tolerances, but such accuracy is not usually necessary in the food industry and the GRAIL robot operates with a repeatability of about 2 millimetres, which is said to be sufficient for most tasks. A number of off-the-shelf components are also used in the interest of reducing costs. Once developed into a commercial product, it is hoped that the GRAIL robot will retail for under €10,000. Such affordable technology able to replace human operators with minimal integration could be extremely valuable for labour intensive meat processing and packing operations.

As the number of operations that can be effectively robotised grows, it becomes possible to visualise a meat plant of the future where almost all the tasks carried out by people are automated. There are still some carcass trimming and boning operations that robots cannot cope with, but it is only a matter of time before these tasks can be automated too. This does not necessarily mean that large number of employees in the meat industry will lose their jobs. Some automation experts believe that redeploying staff to different functions, such as monitoring and improving quality, will create more flexible and efficient plants.

Adding value

Cutting costs in meat processing plants by adopting lean thinking and automating particularly labour-intensive operations can help to create a sustainably profitable business, well placed to exploit new sales opportunities. Unfortunately, taking cost out of meat processing in the long term usually entails investing in new technology in the short term. Although payback periods for some of the robotised systems currently being introduced into meat plants are coming down, significant capital investment is still needed. That may not always be possible, especially for smaller processors. Where a short term boost in profitability is essential, the preferred approach may be to look for opportunities to add value.

Niche markets

One obvious way to add value, particularly for smaller processors, is to supply niche markets for particular meat products. Examples include specially trimmed lean meat cuts for the ‘healthy eating’ market, high quality traditional cuts, diced meats, organic meat and meat from different species, such as buffalo. For instance, high quality beef products matured for extended periods can command premium prices. Value can also be added by additional, relatively simple, processing steps. A good example of this approach is the use of marinades. Pre-marinated meat products are popular, especially for the barbecue market, but marinades can add value by improving aspects of meat quality other than flavour. Marinating is an effective means of tenderising meat, which means that lower value cuts can be treated with carefully formulated marinades to produce products that require less cooking by the consumer, and can be priced accordingly. Marinades can also help to extend products shelf life by changing conditions in-pack so that bacterial growth is inhibited, or by the inclusion of natural antioxidant ingredients, especially herbs like oregano. Other examples of adding value by additional processing steps include breading and glazing.

By-products

Another potentially fruitful source of additional revenue is to look at possible markets for parts of the carcase that are currently discarded as waste. For example, the market for many types of offal is very limited in the UK, but much larger in some southern European countries, such as France and Spain, where demand may exceed supply. Similarly, there may be export markets outside Europe, notably China, where the demand for certain animal by-products is much greater than in domestic markets. This imbalance creates potential new markets for meat processors, but selling into these markets may not be as simple as it appears. Changes are likely to be needed in processing to ensure that material once treated as waste can be harvested and processed under conditions that supply the quality demanded by new markets. For meat processors prepared to treat offal and carcase by-products as valuable commodities, there are opportunities to create entire new revenue streams by supplying non-traditional markets.

Vision for the future

For many meat processors times are hard and the outlook may be bleak, but it need not be so. Well proven management techniques and investment in the latest automation technology can deliver substantially reduced costs within a few years, with the promise of even greater benefits to follow. In the shorter term, revenue can be increased significantly by exploring opportunities to supply new markets with specialised products and by turning waste into valuable export products. Processors with the vision to exploit these opportunities need not fear the future quite so much as the traditionalists.