Animal protein companies should prioritize foodservice partnerships

The animal protein sector and the foodservice sector are closely connected. Strengthening their collaboration could help both industries navigate the challenges that lie ahead, such as declining livestock numbers, high input prices, shifting demographics, pressure to deliver on sustainability commitments, and evolving consumer preferences.

Foodservice accounts for about a quarter of animal protein volume sales and will continue to be a vital channel for animal protein companies. Although the European foodservice market is mature, we anticipate modest yet steady growth. This growth will be driven by consumers allocating a larger share of their food budgets to out-of-home dining, lifestyle shifts, a growing demand for convenience, and the rise in smaller households. As animal protein becomes an increasingly significant component of foodservice costs, ensuring reliable supply at competitive prices is more critical than ever.

Closer collaboration between animal protein and foodservice companies can benefit both sectors. For animal protein companies, longer term agreements and direct relationships with foodservice operators can create a more certain business environment to secure supply and stimulate investments in the animal protein supply chain. Longer term agreements could also benefit foodservice operators, enabling them to secure supply in conditions of declining animal numbers – particularly beef.

Additionally, for operators aiming to reduce their carbon footprint, animal protein is one of the largest contributor to scope 3 emissions. The only way to improve would be in cooperation with their suppliers. Outsourcing some processing and food preparation activities to animal protein companies could also help foodservice operators cope with labor challenges. Business performance on both sides can be improved by creating smarter, more efficient and agile supply chains, and increasing value addition will be key to cover increasing costs.