Poland Processed Meat Market: Business Environment, Competitive Landscape and Future Prospects.

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Poland Processed Meat Market: Business Environment,
Competitive Landscape and Future Prospects.
Contents
Abstract.............................................................................................................................................2
1. Introduction...............................................................................................................................4
1.1. Backgroundinformation ......................................................................................................6

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2. Literature review....................................................................................................................... 10
2.1. Poland’s Meat Industry in Recent years............................................................................... 10
2.2. Competitiveness in Polish Meat Industry............................................................................. 12
2.3. Innovations and competitiveness ....................................................................................... 13
2.4. Frameworks to analyse the competitive landscape.............................................................. 14
2.5. Polish Consumer Behaviour: New PromisingNiche.............................................................. 15
3. Methodology............................................................................................................................ 18
4. Results..................................................................................................................................... 20
4.1. Porter Five Forces.............................................................................................................. 20
Buyer power............................................................................................................................. 20
Supplier power......................................................................................................................... 21
New Entrants............................................................................................................................ 22
Threat of substitutes................................................................................................................. 23
Degree of rivalry ....................................................................................................................... 23
4.2. Some major market players in Polish meat market.............................................................. 24
Tesco Polska Sp......................................................................................................................... 25
Pamapol SA .............................................................................................................................. 25
Jeronimo Martins Polska SA....................................................................................................... 27
Sokolow SA............................................................................................................................... 27
Animex Sp - Smithfield Foods..................................................................................................... 28
Indykpol ................................................................................................................................... 28
5. Discussion................................................................................................................................. 29
5.1. Competitive Landscape...................................................................................................... 29
5.2. Competitive Prospects....................................................................................................... 32
Conclusion....................................................................................................................................... 33
References....................................................................................................................................... 35
Word count:~8,000
Abstract
Despite the huge variations in the market estimations and some differences in the opinions on
the market trends, most of the sources were consistent when it comes to the description of
current market landscape and future prospects on the market.

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The literature review has revealed that the meat industry of Poland has experienced a
considerable growth since the accession to the EU, benefiting from the common market and
country's comparative advantages in this sector. However, after the crisis of 2009, the market
experiences the stagnation, and local producers are increasingly focusing on exports. Polish
meat industry is rather competitive, however, it lags behind some other countries when it
comes to innovativeness. One important reason for that is lack of industry integration. The
literature review has also revealed that Porter Five Forces analysis framework is very effective
way to analyse the competitive environment. The review also revealed that some niches, such
as organic food, are regarded as rather promising.
Considering the five forces analysis, the buyer power is high, supplier power is moderate, threat
of new entrants is also rather small, while threat of substitutes is small but growing fast. the
current level of rivalry is rather high, it is expected to increase even further.

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1. Introduction
This chapter show how and why the researcher has chosen the topic of the research and what
is the background and the context of this research.
Meat is a crucial element of the average diet of Polish people. With the average per capita
consumption of about 80kg per year, Poland has one of the highest level of meat consumption
in Europe and World. Polish consumers do love beef, lamb, pork and poultry. Meanwhile the
self-sufficiency in case of meat production is very high in case of Poland; moreover, Poland
exports meat in a number of European and Asian countries. In general, the food sector is a
crucial sector of nation’s economy and indicates the level of the development of a region.
However, the preliminary study has revealed that in case of the processed meat industry, Polish
companies lag behind the companies from developed EU member states, particularly when it
comes to quality and marketing capabilities. The researcher has an experience of working in
this industry and interest in the research on this industry, which is why the topic of Polish
processed meat industry was selected. The researcher was not able to conduct an original and
useful study on consumer preferences among Polish consumers, because such research would
require considerable resources (see methodology), thus the topic of business environment in
Polish processed meat industry was selected. The literature review has revealed the lack of the
analysis of competitive landscape and competitive prospects in case of business environment in
Polish processed meat industry. In addition, the existing studies mainly focus on the
microenvironment of the entire agro-culture or/and food sector of Polish economy, but not on
the meat industry. However, it should be noted that different research companies developed a
number of existing reports on the market shares and market size.

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Taking into account the lack of such research and interest of the researcher in this topic, the
following two major research questions were formulated:
1. What is the completive landscape in Polish processed meat market?
2. What are the competitive prospects for Polish processed meat industry players?
Answering the first question will also include the brief analysis of microenvironment using the
Porter Five Forces framework and brief analysis of the major market players on the meat
market of Poland. The second research question will be mainly based on the synthesis of the
information from the existing literature, and from the analysis of the results and
Three representatives of the industry who kindly shared some of the information and their
internal corporate reports to help the researcher investigate this topic provided some
additional thought. However, the research mainly uses the synthesis of a number of secondary
data sources, including those available only in Polish and those not available online (internal
reports, internal statistics from some of the companies). Hence, despite of the lack of the
emphasis on primary data collection, the research can be considered as an original one. This is
why the researcher believe it important to write about.
The analysis of porter five forces on the market will be the part where the results are discussed
in the context of the original aim of the analysis of business environment for Polish meat
market players, taking into account the information presented in both the literature review
part and information collected from different sources. Some of the sources contradicted each
other and the researcher had to compare and contrast different views to present these results.
The discussion part will help to answer the two research questions directly.

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The research will subsequently explore why Polish meat companies face the increasingly
challenging competitive landscape and how they can improve their positions using the better
creation and delivering value to the customers.
1.1. Background information
Considering the definition of market, different sources and respondents have different
interpretation of what can be regarded as the market of processed meat. For this research, the
market includes not only the processed meat but also poultry and products with a
predominantly meat content. In some considerations over the business environment, the larger
context is used, as meat processed segment is the part of the meat industry. While the meat
alternatives and substitutes are considered in certain part of the analysis, they are excluded for
the overall research focus, similarly to meat snacks, and chilled plain whole, deboned or
portioned meat.
In terms of the absolute sizes, the market can be considered as rather stagnating in the recent
years, and most of the forecasts predict it will remain on the level of about 90,000 tones in the
following years (Figure 1)

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Figure 1. Volume of the market of processed meat in absolute size
However, this also means that per-capita consumption is only on the level of 2-3 kilos out of
overall 80 kilos of meat consumed, which means a huge potential for growth if the
consumption patterns of Polish people would change and become similar to the ones German
or Czech consumer have.
The market value is however increasing rather fast, it has increased from about 1.5 billion of
PLN to more than 2 billion of PLN in 2015; the growth is explained by the increase of average
price per piece of production due to gradual increase of the quality of products (Figure 2).
Figure 2. Value of the market of processed meat in PLNs
The total market is divided between the chilled processed meat (about 1.1. billion of PLNs) and
shelf stable processed meat (about 800 million of PLNs) as the following Figure 3 shows.

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Figure 3. Major segments in the market of processed meat in PLNs
There is a huge variation in how different sources interpret the market shares of the major
players in processed meat industry and thus how they consider the competitive landscape.
Some notice that the major share is held by the retailers, taking into account their large sales of
own-labeled metal; other sources focus not on the brand owners, but on the original producers
which often gives the largest share to medium enterprises who act as the producers for other
companies. In any case, most of the report notice that Smithfield Foods (Animex is its local
subsidiary) and Sokolow S.A. are the two major companies in this market (Figure 4).
Figure 4. Processed Meat: Company retail market share by value

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2. Literature review
This chapter presents the existing studies on this topic and provides the overview on the
existing debates about the competitively of Polish meat industry. Thus chapter will also briefly
show why Porter Five Forces was chosen as the framework to interpret the results on the
competitive landscape of Polish meat industry.
The analysis of existing literature has shown that there are few academic studies on Polish
meat industry, and no academic study exist on the competitive landscape of the processed
meat market/industry of Poland. However, a number of studies have analysed the topic of
competition within the Polish industry, the history of Polish meat industry, the competitiveness
of Polish meat industry and the ways the competitiveness can be enhanced.
2.1. Poland’s Meat Industry in Recent years
Poland’s EU accession had a very positive impact on the growth of export rate of highly
processed products in the meat industry (Grzelak and Roszko-Wójtowicz, 2015). The meat was
among the major agro-food export products in the latest years, account for 20% of agro-food
export; integration of meat industry with larger European companies was fast, but worse than
expected (Grzelak and Roszko-Wójtowicz, 2015).
In 2003, for the first time in a decade, Poland was able to have a positive balance of trade in
agro-products; the growth of the meat exports from $0.5 to about $1 billion has played an
important role here (Czyzewski and Smedzik-Ambrozy, 2013). Despite the country lags in the
level of efficiency in the agricultural sector compared to the Western member states of the EU,
the agricultural sector has increased its efficiency significantly in 2005-2015 (Czyżewski and
Smędzik-Ambroży, 2015). In 2005-2015, the gap between the development of the food sector

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in Poland and the EU-15 has decreased significantly; the pace of the development of agro-food
industry was one of the fastest in the EU, largely due to the benefits of the Single European
Market (Tereszczuk and Mroczek, 2015). Considering the financial situation in 2005-2010 after
the accession, the overall situation has slightly improved in food industry; the meat sector was
among those performed higher than average in the food industry (Czerwinska-Kayzer et al.,
2014). EU funds and programme of subsidies loans helped to improve the competitiveness of
Polish meat industry in 2002–2013 (Kierepka et al., 2014). In 2005, the Polish market for
packaged foods and meats market grew by 1.8% in 2005 and the volume was 9.3 billion kg; the
market value was $22.5 billion (Datamonitor, 2005). About 49% of market sales were via
supermarkets and hypermarkets; the market was very fragmented as three major companies
had less than 9.2% of total market value. These three major companies were Drop S.A.; Drosed
Siedleckie Zaklady Drobiarskie S.A. and Pamapol SA. In the following two years, the market had
a robust growth of 3.5% per year. In 2007, the major segment of package food and meat
market were bakery and cereals, while meat, fish and poultry had only 16.8% of the total
market of $22 billion. The economic crisis originated in 2008 had a considerable effect on the
consumer behaviour of Polish people considering the meat consumption; about 20% of
surveyed consumers has changed its meat consumption patterns significantly (Kosicka-Gebska
and Gebski, 2013). The most important changes were the reduction of the total volume of meat
consumption, increased the share of cheaper meat, and buying meat in smaller portions
(Kosicka-Gebska and Gebski, 2013). Poland has experienced a considerable decrease of its food
market capacity since the economic turmoil of 2009, however, the local food industry was
rather competitive and the companies were able to compensate the decrease of local sales by
exports (Rytko, 2016). For example, the exports of food and drinks have increased by about
400% in 2005-2014 (Rytko, 2016). Polish meat is among the products that are now competitive
on the European markets (Rytko, 2016). Polish meat producers were among the “global market

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winners” in the period of 2005-2015 (Ozturk et al., 2015). Poland has enhanced its comparative
advantages meat trade not only on the EU markets, but also in the Eastern European markets
(Szajner, 2016). Poland was able to provide a significant volume of export of meat to China, this
resulted in the fact many Chinese investors became interested in the local meat industry
(Drelich-Skulska et al., 2014). The liberalisation of trade with the ASEAN–countries might have
the same positive impact on Polish meat exports as the accession to the EU, the possible
positive outcomes are growing the volume of exports of pork and shortage of poultry meat in
this region. However, in the case of poultry meat, Polish exporters face the increasing
competitive pressure from Brazilian and American counterparts (Kita, 2016).
2.2. Competitiveness in Polish Meat Industry
The market capacity and market competitiveness are two major areas to consider when it
comes to food industry of a particular nation (Rytko, 2016). The market itself had high volume-
low margin structures, and retailers had a very strong buyer power, despite the large chains
controlled less than 50% of total market. The period of 2005-2007 was the start of a rather
evident trend when some retailers attempting backwards integration with supermarkets
developing their own brands of meat products, putting market players under even greater
pressure. Retail grocery concentration is also evident among the academic researchers, and it
bring a number of new factors to the business environment of the agro-business in Europe
(Špička, 2016). Considering the supply power, Polish meat producers now try to find the new
ways to hedge the risks associated with the supply of input products and raw materials
(Krawiec, 2013). Considering the labour force, many specialists and workers of meat industry
from Poland who workers all over the Europe are now going back to their homeland because of
the greater opportunities in employment due to the growth of Polish meat exports, which also

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means additional opportunities to local industry thanks to the influx of experienced labour
force (Wagner, 2015).
Polish and, for example, Dutch meat industry are very successful on the international markets,
however, the latter also benefit from wider implementation of innovative technologies, thus
offering products of higher added value or compensating the lack of natural resources (Janiuk
et al., 2016). Among the crucial success factors that can bring higher sales in the market of
processed meat in Poland are better pricing strategic, greater adaptation to changing local
tastes, learning by doing, better implementation of innovations and e-commerce (Feldmann,
2016). However, underestimation of competition and competitive environment, developing the
retail network slowly and lack of fund to enhance the expansion are among the major reason of
retail market failures in Poland (Feldmann, 2016). In case of commoditized and liberalised
markets, such as meat market of Poland, increased attention towards branding might help in
achieving better competitive positions (Larsen, 2014). Marketing activities have to be
intensified. While the meat producers in Poland increasingly appeal to wellness and quality,
they also now benefit from the value of tradition in marketing, because appealing to tradition
in marketing also often reflect the naturalness raw materials (Bryła, 2015).
2.3. Innovations and competitiveness
In the food-and-farming sector and meat industry in particular Polish companies has been
ranked as the least innovative among the EU countries in the recent decade; however, the
situation was gradually improving (Luczka, 2014). According to Luczka (2014), the important
factor was the disintegration of the industry, as companies were not able to benefit from the
economies of scale in establishing new equipment investing into R&D activity. Meanwhile, a
number of studies have shown that profitability and competitiveness are directly associated
with the intensity of R&D activity and innovative efforts (Szopik, 2007; Szybiga and Prymon,

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2009). Enhanced network interrelations also lead to the higher innovativeness of the industry
(Ratajczak-Mrozek, 2009). Meanwhile, the Polish meat industry players mostly invest in
purchase and modernisation of machines and software licensing, while training is less common;
the major stated aims of investments in innovations are improving the quality of products and
enhancing the competitiveness of the market (Luczka, 2014). The study by Luczka (2014)
revealed that Polish meat companies do not cooperate with each other to attract the
investments or benefit from bulk purchase of equipment or other innovative solutions.
2.4. Frameworks to analyse the competitive landscape
The competitiveness can be measured at three levels, at the corporate level, at the industry
level and at the national/international level (Krugman, 1994; Pitts and Lagnevik, 1998). These
three levels are not always interrelated because the high competitiveness of the nation does
not mean it is successful in all the sectors (Rytko, 2016). Most of the competitive theories are
based on the ideas of comparative and/or competitive advantages (Banterle, 2005). The
competitive landscape analysis helps to identify the primary rivalries that exist on the market. It
is crucial to reveal and analyse the major competitors on the market and then how they
interact with each other and with other forces on the market (Hitt and Reed, 2000). The
framework of Porter's five forces model is the most widely used way to analyse the competitive
landscape on the market (Grundy, 2006; Galbreath and Galvin, 2008). The following Figure 5
shows what factors are taken into considerations when using the framework of Five Forces

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Figure 5. Porter’s Framework of Five Forces: Major Factors to Consider
It should be noted that Five Forces analysis was widely used in the analysis of competitive
landscape in food industries and meat market in particular (Kumar and Budin, 2006; Wijnands
et al., 2008).
2.5. Polish Consumer Behaviour: New Promising Niche
The analysis of Polish consumer behaviour shows that the market can be divided intro three
major clusters, which are the enthusiasts, conservative and ultra-conservative (Żakowska-
Biemans et al., 2017). Thus, the conservative “agenda” remains important in the marketing
strategies in Polish meat market; for example, the major factors for eating meat were the taste
perceived healthiness and suitability to prepare traditional Polish meals (Żakowska-Biemans et
al., 2017).
However, the paper by Bryła (2016) concludes that marketing strategy of focusing on organic
food can be rather effective as polish consumer generally believe organic products and meat, in

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particular, can be healthier, tasty but also more expensive. The companies who want to
participate in this sector should ensure the local consumer trust in the quality and more strict
controls they employ in meat processing (Bryła, 2016). The major obstacles to the boom of the
market are rather a low consumer awareness, but also low availability/visibility of organic
products, not to mention the higher price that might be tool high for Polish consumers (Bryła,
2016). Polish lags in the development of organic food sector compared to some other EU
countries; however, this also means the country has a large potential for the growth of this
sector (Bryła, 2016). The most frequently bought organic products were fruit and vegetables
(58-69%), while 42% of organic food lovers also tend to buy organic processed meat rather
frequently (Bryła, 2016). In general, Niche segments, such as organic and halal food, can bring
not only the additional revenue for local meat producers, but also shed some light on the new
ways to improve the effectiveness and sustainability of the business (Adamek, 2015)
Finally, Olewnik‐Mikołajewska et al., (2016) notice that despite the market is dominated by
conservative consumers, the significant share of the customers are ready to try new and
innovative products. The higher share of such consumer are among the among respondents
purchasing meat and sausages in natural food shops, many of those who buy meat in large
malls and supermarkets are also among the “innovators” or “early adopters”.

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3. Methodology
This chapter shows how the research was conducted. Initially, the researcher wanted to analyse
the consumer preferences in the meat market of Poland. However, the analysis of the studies
on the consumer preferences and consumer behavior in case of Poland and meat industry
shows that it requires the resources unbearable for an individual researcher. For example,
Żakowska-Biemans et al. (2017) note that the study can bring results if at least 500 of
respondents from difference segments would participate in it. Similarly, the study by
Olewnik‐Mikołajewska et al. (2016) on the consumer behavior of Polish meat lovers noted the
important threshold of few hundred of the respondents. The research mainly uses the synthesis
of a number of secondary data sources, including those available only in Polish and those not
available online (internal reports, internal statistics from some of the companies). Hence,
despite of the lack of the emphasis on primary data collection, the research can be considered
as an original one. Considerable share of information (internal reports) and additional
suggestions about the Polish market were given by three respondents who helped to collect the
data:
 Aleksandra Smorawa, Director of Strategic Planning from Pamapol S.A.
 Aleksandra Michalik, Assitant to Managing Director at INDYKPOL S.A.
 Jaroslaw Dubinski, Polski Koncern Miesny DUDA3
Considering the ethical sides, all the respondents were informed about the reason of enquiry
(including the topic of the research and later change in the focus of the topic). The participation
was absolutely voluntary and they were asked to share only non-confidential information (thus,

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private, but the one that is not confidential). There was not any deliberately misleading of the
participants in any way.
Considering the reliability, it can be concluded that the research has rather high reliability as
most of the suggestions are based on the numerical data from internal and external sources,
which can be tested and reinterpreted with the same result. The validity is ensured by the
implementation of a well-known and proved frameworks.

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4. Results
In terms of the analysis of external environment including in the framework of porter five
forces, the collected data has revealed that many sources contradict each other, particularly
when it comes to the share on the market, size of the company and volume of the sales. One
possible reason is that market can be defined using different approaches, some sources talk
about meat and poultry market, others focus only on the market of meat, third type of the
resources analyse the food market of Poland and meat segment being the part of it. There is
also considerable difference between what is defined as Polish meat market and Polish meat
industry. In addition, there might be considerable differences in the evaluations of level of sales
between the industry reports (for example, by Marketline or Euromonitor) and internal
information that is often more precise but also can exaggerate some statements. The
researcher thus had to compare and contract different statements and opinions to present the
most realistic and reliable ones.
4.1. Porter Five Forces
The followingpartdiscussedthe revealedresultsusingthe frameworkof PorterFive forces.
Buyer power
Taking into account that local consumers can benefit from a large number of agricultural
products not only from Poland but also Europe, the power of buyers is not weak. In addition, in
case of Poland, large retailers, notable are, Groszek, Tesco, Biedronka, Metro, and others; up to
20 major market chains are the major buyers of meat products on the market. Major buyers
have different policy towards processing, some are acting as wholesale dealers and buy
unprocessed meat, but in most of the cases only food processing companies buy unprocessed
meat. In any case, the large chains have very strong negotiation power with both meat

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companies and processing companies, meat companies are ready to provide discount as they
are bulk buyers with strong contractual arrangements. However, as negotiation power is more
on the side of retailers, the contracts are usually in favour of retailers. Another factor that
decreases the power of meat companies in favour of buyers is low switching costs. In most of
the cases, major meat companies cannot have any strong product differentiation, this also
increases the buyer power. It was noted previously that promoting own products as organic
and locally sourced can enhance the product differentiation, thus there is a potential for the
growth of this niche that could decrease the buyer power somewhat. On the other hand, the
common European market limits the buyer power, as producers are able to export own
products in case they are not satisfied with the purchase prices of local retailers, the global
exports of Polish meat industry is also growing fast. Some trend of forward integration in the
segment of organic and locally sourced is evident as some farmers sell the products directly
thanks to the farm store outlets. Despite this segment is now small it has a potential to
influence the behaviour of large buyers. In general, it can be concluded that the buyer power is
strong.
Supplier power
Because of the growth of farming in Poland and increasing intensification of equipment
renovation globally, there is a strong and ever increasing demand for agro-machinery, agro-
and food equipment and other inputs and products necessary for food industry. In terms of
fertilizers and compound animal feedstuff, several large players on the European market offer
the consistent level of quality and reliability supplies. There is a high volatility of input products
in the meat industry. Paradoxically, the meat industry much depends on the prices of nitrogen-
based fertilisers, which in turn are interrelated with the fluctuations in the prices for natural gas
and other commodities. In general, the current situation on the market of commodities

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decreases the power of suppliers. The common European market also increases the
opportunities for switching the suppliers; however, in some cases, the switching costs might
not be low. In addition, the growing demand from organic products including the organic meat
also increases the pressure towards the suppliers of usual compound animal feedstuff. All these
factors make the supplier power in the meat industry/market moderate.
New Entrants
There is an evident trend of industry consolidation, in much it is due to the growing pressure of
European regulation that is often seen as an obstacle to the new market players. Many
consider the increasing complex of European regulation as the way large European agro-food
companies lobby the increase of the barriers of entry. In addition, because of the growing
importance of technologies and innovations in the industry, the entrants need considerable
resources to purchase the latest machinery and the provision of working capital for current
operations. This, the problems of higher operating costs and low profit merging often means
the unbearable entry barrier. The industry consolidation is largely due to the necessity of
benefiting from economic of scale amid such an environment. Because of the land and
equipment, small market players has no opportunities for expansion, in most of the cases they
are bought by the larger players. However, in case of Poland, the entrance of the new players is
partially facilitated by a number of loan programs that promote local agro-cultural industry. In
addition, the meat industry has very low level of differentiation, which also facilities easier
entrance of new market players; some of them offer differentiated products and thus can
occupy the new and growing niche. Finally, the market entrance is also facilities by the very low
brand loyalty, in most of the cases, the final buyers of meat are not aware of the supplier of the
product. The threat of new entrants can be considered as moderate, because the complex

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business environment and rather modest rate of growth weakens it, but a number of other
factors increase this threat.
Threat of substitutes
It can be concluded that in the case of meat products, there is not considerable threat of the
substitutes. However, some might not want to eat meat (“vegans”), but industry experts
believe the share of such consumers will not rise to a certain level that would threaten Polish
met industry. In addition, Polish consumers has the lowest level of average seafood
consumption among the large European countries. Thus, Polish meat producers are confident
that the demand for production will remain strong. In a certain way, the small but growing
niche of locally produced organic meat can be considered as a threatening substitute to
traditional industrially produced meat. But the “switching costs” in this case can be considered
as rather high. Local producers should have a certain strong specialist knowledge about how
meat should be produced and licensed, taking into account strict European regulation. On the
other hand, three are more than 1.5 million of farmers in Poland that are considered as
underemployed and they sooner or later can realize the potential of producing the meat and
other products that can be regarded as “locally sourced and organic”. This factor can be
regarded as rather important and worth considering. However, in general, it can be concluded
that the threat of the substitutes is low for this market.
Degree of rivalry

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In general, the current environment means that all the market players are primarily competing
for establishing long-term contract relationships will large and medium retail chains. The trend
of retail consolidation and consolidation on the meat market means that this increases the
rivalry for decreased number of retailers among the larger companies. Another important
factor is the lack of any differentiation, which also pushes the rivalry higher. In meat industry,
differentiation is usually for small niches (i.e. halal meat, organic meat), and this does not
decrease the rivalry on the market in general. The share and importance of modern equipment
and latest development in agriculture is increasing from year to year, the suppliers has a certain
power, while the profit margin becomes thinner. On the other hand, the provision of state and
EU subsidies for agro-producers decreases the rivalry somewhat, mostly with the help of
Common Agricultural Policy, another important factors is subsidies loans for agro-producers in
Poland. However, with the recent reform of the Common Agricultural in 2013-2015, the
importance of subsidies is decreasing, and Common Agricultural Policy is expected to decrease
in the near future. All these means that while current level of rivalry is rather high, it is
expected to increase even further.
4.2. Some major market players in Polish meat market
The result part not only includes the information on the meat producers, but also major
retailers as now they are engaged in backwards integration and increasingly engage in meat
processing and meat production.

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Tesco Polska Sp
Tesco Polska Sp is a major market player with more than 30,000 employees, with the revenue
of more than PLN12 billion (about €2.7 billion) and more than 460 outlets owned by the
company. The Large corporate group, Tesco, which is based in the UK, owns the company.
While the company is planning to cut certain costs in the ordinary retail format, it increasingly
spends on new retail formats, including online channels with free delivery. By the end of this
year, the company plans to decrease its sales area by more than 40 thousand square meters.
Another decision is the stop of the expansion program in smaller cities of Poland. Considering
the Tesco Polska Sp zoo, the subsidiary plans to increase the revenue thanks to offering
additional services including meat processing, food preparation and fuel stations. It can be
noted that the company has a very strong coverage, as all the large Polish cities are covered, it
also has a great national outlet network among smaller cities and countrywide coverage in the
most profitable areas. The company plans to increase the share of own-produced meat under
own label, particularly in the case of Tesco Polska SP zoo that offers lower-end products. The
company also plans to reconsider the existing contracts with suppliers as the part of cost-
cutting efforts. The company benefits from the experience and market power of its parent
company, Tesco. The growth of the private label sales is the part of the current strategy of
growth.
Pamapol SA
Pamapol SA is a medium-sized company particularly focused on processed meat; it has less
than 600 employees, and the revenue of PLN300 million (less than €70). Pamapol SA was
established in 1993 by two brothers – Mariusz and Pawel Szataniak – is the strategic and

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dominant arm of Pamapol Grupa Kapitalowa (capital group). The company’s headquarters are
located in Rusiec near Belchatów. Pamapol became a joint-stock company in 2004, when it
transformed from a public limited company. Since June 2006, the company has been listed on
the Warsaw Stock Exchange.
Pamapol has particularly strong positions in the segments of packaged food and ready meals,
while the company does not plan to increase the sales of unprocessed meat because of the
lower profitability of this segment. The company's major goal is offering the large range of the
high-quality and reasonably-priced products, focusing on the urban consumers who want tasty
semi-processed meals that are easy to prepare. The company has also solid positions on the
market of canned/preserved food and soup. The company can be considered as rather good in
changing towards the needs of consumers at is has drastically changed its product mix before
and three years after the listing on the Warsaw Stock Exchange, to reflect the changes in the
business environment after the crisis. The company has a strong marketing department that
focuses on finding the changes in the market trends and in consumer states and eamdsn in
Poland to change the product portfolio. The company plans to open its line of organic meat
products (although the term “organic” can be disputed). The company has the nationwide
coverage and contracts with several major national retailers. Considering the innovations, the
company has established the latest processing facilities in Rusiec, the new product range
Pamapol Dania Gotowe is rather innovative on the market of ready meals. The share of the
ready meals is however decreasing in the total revenue of company in 2013-2015, however, the
share of canned/preserved meat and soup is growing. The major reason according to the
company is intensifying competition in the lower-end segment. The company still holds the
third place in the national share of canned and preserved ready-meals in Poland, the current
strategy states the major goals is to achieve the first place by 2025. The company believes that

27
current heavy investments into promotion, including the investments into new media ads can
bring the larger share. Final step in the strategy is the gradual growth of the share of premium
products among its product portfolio (including “organic” meat and other products).
Jeronimo Martins Polska SA
Jeronimo Martins Polska SA is a large company with more than 55,000 employees and the
revenue of about €13 billion. The company is part of Portuguese corporate group, Jerónimo
Martins SGPS, which operates in food distribution production, with stores located in Poland,
Portugal and Colombia. The major share of the revenue comes from Biedronka discounters,
which offer a variety of products, including premium, economy and private label. The company
is increasing the share of own products, including the meat products.
The company’s overall value share of packaged food was equal to 6% in 2015 and it ranked in
first place among companies present in Poland. The company has a small growth, mostly due to
the growth of the share of discounters and private label, including the private label meat and
organic products. The company is expected to increase it revenues in the following years,
because of the projections of the growth of discounters segment.
Sokolow SA
The company had the revenue of about €750 million in 2015, and the net income of about €30
million in 2015. The company's headquarters is located in Sokolow Podlaski. The company has 7
production plants in Sokolow Podlaski, Kole, Robakowo, Debica, Czyżewo, Jaroslaw and Tarnow
and livestock farms, Falcons Falcons Service and Logistics. The company also has an office in

28
Warsaw. Its strongest brands are: Sokoliki, Gold, Feast Qulinarne, Naturrino, Darz Bor. The
company produces about 28 thousand tons of meat and meat products per month. Current
strategy is expanding the range of the products by introducing products for the people who
care about a balanced diet - that do not contain phosphates, sodium glutamate or artificial
colors (including a series of Feast Qulinarne - beef with Sokolow, Naturrino whether, for
example. Chips, Beef, Pork and Poultry). About qutner of total production is exported, mainly to
European countries.
Animex Sp - Smithfield Foods
Animex, (according to some estimations) is the largest players on Polish market of processed
meat. The company specialises in the production of pork, poultry, meat preparations and down
and feathers. The company ismanufacturing for the domestic market and export more than
quater of its total production. Animex has 9 factories in Poland, (Elk, Suwalki, Iława, Morliny,
Starachowice, Debica, Szczecin, Opole, Kraków), and employs more than 7,800 people. Animex
markets its products under the brands of Krakus, Morliny, PEK, Yano and Mazury. The company
operates as a subsidiary of Smithfield Foods.
Indykpol
Indykpol is the major player on the segment of turkey meat and processed meat goods. The
major focus is made on the whole birds, poultry elements, turkey meat and turkey processed
goods. The company uses its company's name as the major brand; significant part of the goods
goes to the European Union market. The company had the revenue of about $320 million and

29
increased its own revenue by more than 15% in 2013-2015. The company has a rather slim
profit margin, the net profit was about $7 million, but the company has managed to increase its
profit by about 50% in 2013-2015. The company expanded on Russian market (Tatarstan) in
2007 and had a relative success there. In the year of 2009 crisis, the company established the
renovated and well-equipped line for slaughter and butchery the Lublin plant, it also started the
Jedynak kabanos sausage. In 2010, it has merged with Biokonwersja and renovated its line for
slaughter and butchery in the Olsztyn plant in 2010. In 2011-2012, the company has bought
Wytwornia Pasz w Olsztynku.
5. Discussion
5.1. Competitive Landscape
According to some estimations, Sokolow SA is the largest market player on the rather
deconsolidated market of meat in Poland, it had the share of 13.4% in the total market as for
2015. The share of the second largest player, Animex Sp zoo was about 8.1% in 2014 (and was
expected to achieve the level of 8.3% by 2016). However, the company has been recently
acquired by the Chinese meat international conglomerate - Shineway Group, holds more than
16.1% of total market share in Poland (includes its different subsidiaries).
The Animex Sp discounter Jeronimo Martins Polska SA is an important player on the market
because of the large assortment of private label meat (however, it should be noted that
considerable share of meat production is actually outsourced). The overall portfolio of meat

30
products helped to company to achieve the level of 81% of total value share of the market. All
three leaders are benefiting from the nationwide coverage, either with the help of partnering
retailer, or with the help of own network of outlets. Sokolow SA and Animex Sp zoo mostly
focused on the frozen and chilled processed meat. Jeronimo Martins Polska SA has rather
strong positions in all the segments of meat market (except for organic), mainly because of its
Biedronka private label brand that is considered as a trustworthy ones among the customers of
budget retailers.
The highest growth rate in 20-15 was by the Polsoja sj, it has increased its sales in the segment
of meat substitutes (its core segment) by about 25% in 2014-2016. The company increases its
sales of meat substitute products, based on soy and tofu, thus it is not affected by the threat of
meat substitutes. The company benefits from a weak competition in this segment, it also offers
premium soy-and tofu-based products for vegans, often the prices much higher than meat-
based products.
Major tool to attract the consumers is offering price promotions, discounting has also become
prevalent since 2009-2010. All three largest market players have their own distribution
network, which means greater market power, all three spend excessively on the promotion and
marketing strategy to increase their share in the Polish market. In-house sales and distribution
system decreases the total operational costs, while increasing the profit margin.
Polish consumers are pay rather high attention to what is written on the package of processed
meat compared to other European customers, they mostly pursuer the products of higher
quality; in recent years there is a greater emphasis on the price to value ratio. The market of
processed has a number of prominent international brands. However, it should be noted that
the foreign brands often use the meat that is locally produced. Jeronimo Martins Polska SA is
now becoming very competitive on the market thanks to its Biedronka brand.

31
Local Profi SA can be considered as very perspective players because it offers innovative
products that blend the meat and seafood and offers the new flavors in its ready-to-eat meals;
it also focuses on promoting its branded meat as very healthy, organic and without artificial
ingredients. Sokolow SA has launched a massive promotional campaign at the end of 2015,
with the focus on promoting its chilled red meat products as “crunchy” and particularly
attractive and tasty. The company also realizes the importance of new consumption trends of
urbanized consumer and emphasizes the convenience of the products and ease of their
preparation. On the other hand, Polish market is still rather conservative, as most of the
consumers prefer to cook and prepare meat by themselves.
The processed meat is in the major focus of the marketing activities and promotional campaign
in the Polish meat industry. The major market players now implement and comprehensive
promotional campaigns that includes the BTL in-store promotions, the sue of national
television, including the non-conventional ads on TV, the use of printed media that is still rather
popular in Poland and the promotion via social media marketing. In their promotional
campaigns, the major focus is usually on the quality and price-to-quality ratio of the products,
one often story used is the larger amount of meat in the final processed product and lack of any
artificial and non-organic ingredients. The experts note that packaging becomes and important
source of advantage in the market, as the resent success of Sokolow and Biedronka new
products suggests. In 2015-16, the major examples are the meat products by Sokolow SA that
now uses the attractive cardboard boxes developed in a way consumers would prefer it not
only for convenience but also attractive design. Urban consumers want are increasingly buying
the processed products with sophisticated recipe, including the combination of meat or fish
content. On the other hand, the major share of consumer are now rather or very price-
sensitive, and they are more interested in economy products or products with a greater price-

32
to-value ratio. Private label products are now increasingly considered as products with the
price-to-value ratio.
5.2. Competitive Prospects
There is an evident trend of growing quality in processed meat segment as the method to
increase the competitive positions, it is expected to continue further. The growing number of
consumers want to consumer products labelled as organic, they want to be sure that the meat
has less artificial preservatives, while the meat products are mostly actually made of meat. The
major Polish and international retailers in Poland are expected to increase the share of private
label products in all the segments, in many cases, however, this only means a decreased market
power of meat producers, as retailers often outsource the production and control the quality.
Experts predict that the revenue of processed meat is expected to grow less than 1.6% in 2016-
2020 (in constant price value), which means an intensification of competition and
consolidation, as major market players stated the considerable increase of their sales as their
major goal for the following ears. One important factor that might decrease the growth of even
further the increasing popularity of vegetarian diets and other diets with lower share of meat
among the consumers. While it will not decrease the volume of the market, it will certainly
affects its growth rate. However, with the greater share of higher-quality product in meat
processed segment (which means that “meat” products will have a larger share of meat), the
growth might remain on the forecasted level. Meanwhile, the shelf stable meat is expected to
increase it share in the following years, in addition to the chilled stable meat substitutes. Both
segments are expected to grow few times faster than the meat market, mostly due to
increasing number of vegetarians and vegans in Poland and those who want to decrease the

33
consumption of meat as the part of their diet. In addition, the frozen processed fish/seafood is
also expected to grow, also because of the increased focus on healthy diets among the Polish
consumers.
The average prices for meat are forecasted to decrease, because of the growing competitive
pressure inside and outside the meat segment. Another crucial factor is the growth of the
volume and growth of the share of private label products, they would mostly impact the prices
for processed frozen meat. Companies are forecasted to enhance the value among the existing
product line, while some companies are expected to enlarge their product lines to include the
fish products and meat-substitute products for vegans. Existing large market players are
expected to use different brands to promote the new “organic” meat products. The major focus
in promotion is expected to be the enhanced health and general focus on wellness; there will
be a certain shift from “quality and taste” to “quality and health benefits” in the promotion of
meat products. Experts predict the increase of investments in social media promotion and in
traditional promotion given this shift and enhanced competition.
Generally, the new launches of products are expected to stimulate the competition even
further, the particular attention should be paid towards the segments of “organic” and healthy
meat products, convenient and well-packaged ready-to-eat meat products and meat substitute
products.
Conclusion
In conclusion, it can be suggested that the research has answered its two major questions
revealed in the introduction part.

34
Despite the huge variations in the market estimations and some differences in the opinions on
the market trends, most of the sources were consistent when it comes to the description of
current market landscape and future prospects on the market.
The literature review has revealed that the meat industry of Poland has experienced a
considerable growth since the accession to the EU, benefiting from the common market and
country's comparative advantages in this sector. However, after the crisis of 2009, the market
experiences the stagnation, and local producers are increasingly focusing on exports. Polish
meat industry is rather competitive, however, it lags behind some other countries when it
comes to innovativeness. One important reason for that is lack of industry integration. The
literature review has also revealed that Porter Five Forces analysis framework is very effective
way to analyse the competitive environment. The review also revealed that some niches, such
as organic food, are regarded as rather promising.
Considering the five forces analysis, the buyer power is high, supplier power is moderate, threat
of new entrants is also rather small, while threat of substitutes is small but growing fast. the
current level of rivalry is rather high, it is expected to increase even further.

35
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