Duc looks abroad to combat declining sales

Duc, the French poultry processor, has reported a 10.5 per cent decline in 2002 sales to €127.7 million due to the continuing difficulties in the French market. But the group remains confident that it can overcome these problems by moving its focus to foreign markets and innovative products.

Operating results for the year dropped into the red to the tune of €3.7 million, while net losses reached €3.3 million, a sharp decline compared to profits of €3.3 million and €6.6 million respectively in the previous year.

Duc said that the French poultry sector had been affected by overproduction at a time when consumption was in decline. The situation was further compounded by low prices for beef and pork and substantial imports from Brazil and Thailand.

Branded poultry products suffered at the hands of discounted items but also from a major marketing push from Label Rouge (premium quality) products, Duc said, adding that it had taken a number of measures to limit the impact of the crisis on its business.

These measures include a repositioning of the Duc brand to focus on 'easy cooking' - a reaction to growing consumer demand for ready meals and convenience food. In concrete terms, this means the launch of the Facil'Découpe, a pre-cut chicken, and Facil'Cuisson, a chicken which has been seasoned and is ready for roasting.

But these are just the first in what Duc claims will be a long line of innovative products developed by its marketing and R&D departments. Given the favourable reaction to Facil'Découpe, launched late last year, the company clearly believes it is on the right track.

In addition to these innovative new products, Duc is also planning to expand into some of the more traditional poultry sectors where it has not previously had a major presence. These include the quality-controlled sector, where it has launched a range of products under the Prestige brand for the wholesale and catering markets, a range of halal products and other Label Rouge and standard products.

Export markets will also play an increased role in Duc's business in the future, the company said, although the focus will be as much on technology transfer as on selling products. Duc signed an agreement with the Ukrainian company Ruby Rose Agricole in November 2002 allowing the company to take advantage of the French group's know how, and other similar agreements are expected to be signed during the course of 2003.

Despite the difficult economic surroundings, Duc​ continued to invest during 2002, with €4 million going towards the construction of a frozen food plant and a water treatment facility.

The company said it expected sales in line with those of 2002, despite the continued downturn in the market likely in 2003. Profits are expected to grow again after the declines in 2002, while the fruits of the company's international expansion should be seen by 2004.