Preface

This report sets out to describe how salami chain is working in Hungary, Poland and the Netherlands. It was written for students studying food chain management and also for people who are interested in food, quality management, pig industry and how salami processing does look like not just in the Netherlands but even in Poland and Hungary.

The chain is very complex and continuous process. If one of the parts of this system doesn’t work correctly some difficulties can appear and the whole chain is disorganized. It is very important to cooperate and have right information. The report consists of three main parts because of describing three different chains in the three countries (the Netherlands, Poland, and Hungary). The body of report has the same structure for each country. Firstly basic facts and figures about the product are mentioned. The chain is described and information about marketing, logistics, quality assurance and food safety are given per each company. A SWOT analysis is provided together with bottlenecks and success factors. There is description of developments and leaders in these chains, too.
The report gives brief and clear comparison of each chain in every of these countries.

Table of contents
Preface1
Summary3
Introduction4
1. Salami chain in the Netherlands5
1.1. General facts and figures connected with pork and salami5
1.2. The chain7
1.3. Sausages and salamis making9
1.3.1. Generally about salami10
1.4. Profile Zwanenberg Food Group10
1.4.1. Marketing12
1.4.2. Logistics15
1.4.3. Quality assurance15
1.4.4. Food safety15
1.4.5. Packaging16
1.4.6. Important developments16
1.5. Participants in the chain17
1.5.1. Farmers 17
1.5.2. Producers (company)17
1.5.3. Consumers17
1.6. Significant leader18
1.7. SWOT analysis 18
1.8. Bottlenecks19
2. Salami chain in Poland20
2.1. General information about salami chain20
2.2. Farmers and pigs production21
2.3. Slaughtering21
2.4. Processing21
2.5. Food safety22
2.6. Quality assurance22
2.7. Marketing23
2.8. Logistics24
2.9. Recent developments25
2.10. Leader in the chain and chain organization/cooperation26
2.11. SWOT analysis26
2.12. Bottleneck27
3. Salami chain in Hungary28
3.1. The way from the farmers to the shops28
3.2. The special processing of Pick Salami30
3.3. The wide palette of food by Pick30
3.4. Marketing32
3.5. Logistic system32
3.6. Mergers and Acquisitions32
3.7. Quality assurance33
3.9. Recent developments35
3.10. The leader of the chain35
3.11. SWOT analysis35
3.12. Bottlenecks36
Conclusions37
Recommendations38
Bibliography39
Summary

In the project, there are presented salami chains in different European countries: Hungary, the Netherlands and Poland. The purpose of this project is to describe salami chains and to make an overview of the kind of participants which are working together. Next aims are to present recent developments in every country, different business aspects like marketing, logistics, quality assurance, food safety and chain organization. The goal of this project is to introduce SWOT analysis, bottlenecks and success factors of the chosen chains. The whole project is divided into three main chapters in which are also depictured salami chains in Hungary, the Netherlands and Poland.

Pig sector is an intensive-farming sector. At most intensive is in Poland (64%) then in Hungary (13%) and at least the Netherlands with 9% of pig sector. Nevertheless, the Netherlands is the country which belongs to the top 4 rank in export of pork. The strongest salami tradition among these countries is in Hungary as well as in the other Eastern European countries. However, this product becomes more favourite in Western European countries as borders are opened and people travel more. People’ preferences have been changing and people have started to demand healthy and safe food. Pig sector was among the first to introduce quality guarantees. The salami chain consists of many activities with long term result. Companies have to take care of food safety and high – quality of meat. If the company wants to retain its customers or gain more, it needs to promote its brand name and ensure safety of its products.
The chain in every of these compared countries is very similar. It is because participants are the same in every country and dominant leader is company. The participants have to cooperate very close. Having right information is also very important as we talk about food and safety. Differences can be seen in farming as in the Netherlands are mostly big pig farms and take more risk because of density and lack of land. The quality of meat is very high and control for quality and food safety is very well organized and developed. The consumers have been changing their preferences and starting to believe more meat products and discover new varieties of salamis. Hungary has market with a lot of faithful customers who buy salamis because of tradition and do not think much about safety. Quality is important for them as they can choose among many brands and varieties.
Introduction

Salami is kind of meat product which is very popular mostly in the Eastern European countries. It has a long tradition. Salami varies in every country. It has different shape, design and different ingredients are added. Pork is the most widely eaten meat in the world, providing about 38 percent of daily meat protein intake worldwide, although consumption varies widely from place to place. According statistics released in 2003 for European Pig Populations indicate that the new member states enjoyed a 3% growth rate with Poland's population at over 18 million pigs (64%) and in Hungary 13%. Lower labour costs have been attributed to the growth of the pig populations. The pig population is 9% in the Netherlands. Consumers today demand high-quality products in various innovative forms through the entire year at competitive prices. The chain is characterized by a forward flow of goods and a backward flow of information. Quality and food safety are very important in this sector.
This report gives information about (pork) salami chain in three countries: Poland, Hungary and the Netherlands. These chains are different in every country because every country has its own food safety policy although some standards and regulations are the same because of united policy of the European Union. Every country has its own difficulties and strengths. The comparison of the chains is provided. This report gives some advices what could help to improve the cooperation among each part of the chain. It concentrates on main aspects like marketing, logistics, quality assurance, food safety and chain organization. There is also a description of the dominant leader and important development. Swot analysis gives clear overview of important aspects of the chain including description of bottlenecks and success factors.
This report is made for food chain management students who are interested in chain in different countries (Poland, Hungary, the Netherlands), in pork industry, salami and food safety or quality assurance.
1. Salami chain in the Netherlands
1.1. General facts and figures connected with pork and salami

The Dutch pig sector has a reputation for producing pigs of a consistently high quality and a uniform weight class.
With its IKB (Integrale Keten Beheersing – in English: Integrated Chain control) – the Dutch pig sector provides total surveillance of animal production. The pig sector has for many years been guaranteeing the safety and quality of its pig meat. Key elements of the IKB schemes are exchange of information combined with a system (Identification & Registration) for tracking and tracing animals, and extra requirements relating to feed, hygiene and the use of veterinary drugs. These aspects make the Dutch pig sector competitive to other countries.

Population and production
For the first time since 1999, the Dutch pig population showed a slight increase. In April 2004 there were 11.2 million pigs (+0.4%) in the Netherlands. The number of farms where pigs are kept however decreased 7%, to 9,980. The larger number of pigs resulted in a 0.8% growth in production, to 20.3 million animals. Out of this total, 2.3 million were exported as fattened pigs (+1.8%), 3.7 million as piglets (-8.5%) and 179,000 as sows for slaughter (-6%). The remaining 14.1 million were slaughtered in the Netherlands, along with 337,000 imported pigs. This resulted to a 3.9% increase in the number of animals slaughtered, to a total of 14.4 million with an average slaughtered weight of 89.7 kg. This resulted in a production of 1.3 million tonnes of pig meat (+3.4%).
The decline in the number of farms with pigs continued in 2005. The present number – just under 9,700 – is only a third of that in 1990 (at the end of 1999 there were 16,426 pig farms with a total of 13.6 million animals in the Netherlands) . Almost all the disappeared farms had kept pigs as a sideline activity. The number of farms specializing in pigs on the contrary increased.

Exports
Exports of pigs, pig meat, pig meat products and bacon increased 7.8% in 2004, to 1.2 million tonnes (calculated in slaughtered weight). The export value increased 11.2%, to € 2.1 billion. Exports of pigs showed a 2.7% drop whereas those of pig meat and bacon increased substantially (+13%). Exports of (cooked/canned) pig meat products experienced a slight decrease (-0.6%). The increase in the export volume is largely attributable to the larger number of animals slaughtered (+4.8%). The three largest export countries as far as pig meat, bacon and (cooked/canned) pig meat products are concerned are the United Kingdom (34%), Germany (21%) and Italy (19%). With exports of live pigs included, Germany is the largest market for the Dutch pig sector.
Increased exports
In 2005 the Dutch pig sector’s exports increased to 1.25 billion kg (4%). Together with the higher selling prices, this increase resulted in a 7% increase in the export value of the overall pig sector, to 2.2 billion. The export value of live pigs in particular increased because far more animals were exported and the exported animals were sold at higher prices.

Selling prices
In 2004, the average reference price for fattening pigs (class E) was € 1.31 per kg of slaughtered weight (excluding VAT), which represents a 13.6% rise relative to the price in 2003. The price of piglets according to the Utrecht Pig Exchange was € 30 per piglet (+12.6%). The selling prices of piglets and pigs rose in 2004 as a result of the expansion of the EU, and the greater demand for pig meat on the global market due to import bans on other types of meat on account of animal diseases. Piglet prices rose substantially in 2005. This upward trend was supported by a strong demand from Germany, but also from the new EU member states Poland and Hungary.

Consumption
At 688,000 tonnes, Dutch consumption of pig meat remained virtually unchanged in 2004 (+0.1%). This corresponds to 42.3 kg of pig meat per capita. Pork consumption is by far the highest of all meats in the Netherlands. In spite of the rise in the selling prices of fattening pigs, the average shop price was the same as in the previous year. This is partly because shops are slow in adapting their prices to the higher purchasing price, but also due to the price war amongst Dutch food retailers that also helped to keep retail pig meat prices low. 1
Slight decrease in consumption
The consumption of pig meat was last year a little lower than in 2004. Consumption per capita decreased to 41.9 kg (-1%). This decrease was largely due to the higher retail prices charged for pig meat.
Consumption of meat and meat products (in kg per head) in the Netherlands 1990-2004
This figure is about half of the consumed quantity based on carcass weight (= including bones).

Table 1: Consumption of pork in the Netherlands
Year
1990
1995
2000
2003
2004
2005
Consumption (kg)
42.5
44.2
43.6
42.4
42.3
41.9
Source: www.cbs.nl

Better market situation
The trend towards improvement of the market situation remained unchanged in 2005. Production increased slightly, exports, especially of live animals; saw a substantial increase and the price level of fattening pigs was virtually no lower than that of 2004. Sow farmers realized better results due to the higher prices paid for piglets and lower feed prices. Fattening pig farmers did less well on account of the higher purchasing prices of piglets. This was however largely compensated by lower feed costs. As capital charges decreased too, the income/costs ratio of an average fattening pig farm improved.

1.2. The chain

The meat chain extends from the animal feed, genetics/breeding, multiplication, farm and slaughterhouse sectors to the processing industry, portioning, wrapping, distributing, and selling and the wholesale and retail sectors. This chain of activities is generally a result of long term, strategic management decisions, and, therefore, fairly constant at the short term.

1.2.1. Inputs into the pork production chain:

The input into the pork production chain, which refers to the way the chain activities are carried out and to the kind and amount of material used in the chain. Input is qualified by means of input values, for example, amount and composition of the feedstuffs, type of pigs and the way of breeding, kind of veterinary care and medicines, amount of energy, type of transport and labour. Some inputs, such as feed and veterinary care, may themselves be the result of a (sub)chain. Input, input values and chain activities are often closely associated with each other since one feeds a kind of feed, transports pigs over a certain distance with a particular truck, wraps pork in a specific material, and so on. Input values are generally a result of short-term, operational or tactic management decisions.2
Drawing 1: Salami chain in the Netherlands

Source: Own study

1.2.2. Breeding

Fattened pigs which have reached their target weight are usually transported in trucks
to a slaughterhouse.

1.2.3. Slaughtering

Lairage in slaughterhouse: At arrival slaughter pigs are usually accommodated and slightly showered during at least two hours in large groups in the slaughterhouse. In this stage veterinary inspection of live animals takes place to ensure that only meat from healthy animals will be used for human consumption.
Slaughtering, stunning of pigs is usually done electrically or by means of carbon dioxide. Intestines and other organs (including hairs and hoofs) are removed from the carcass. Carcasses are veterinary assessed and bruises and other aberrations are removed. After grading and weighing, the carcasses are stored and cooled for at least 24 hours.

1.2.4. Cutting, portioning, wrapping

After arriving pigs from the farmers to the slaughtering houses and killing them by butchers, they will carry out primary butchery by selecting carcasses, sides, or quarters from which primary cuts can be produced with the minimum of wastage, separate the primal cuts from the carcasses using the appropriate tools and equipment following company procedures, trim primal cuts and prepare for secondary butchery of sale, and store cut hygienically and safely. Secondary butchery involves boning and trimming primal cuts in preparation for sale. A butcher will also manufacture meat products for sausages. Cutters cutting meat to have needed form traditionally work indoors, in large, refrigerated rooms, with temperatures ranging between 2 and - 4 degrees Celsius. These environments are kept sanitary, and are washed every day with powerful antibacterial cleaners. In larger retail outlets or plant-facilities, working environments are generally equipped with power tools such as band saws and circular slicers. Meat cutters are also generally required to be in good physical shape; the duties of a meat cutter include standing for long periods of time, regularly lifting over 25 lbs, and working in cold conditions. The duties of cutter often include trimming of primal cuts into saleable cuts, making ground meat out of trimmings from the primal cuts, ensuring meat cuts are displayed in an eye-catching manner and are of sufficient quality, and serving customized orders to customers. He is also responsible to keep their working areas clean, and ensure that proper sanitization procedures are followed.

1.2.5. Carcass and meat processing

Here, in specialised cutting and processing units, which may or may not be integrated in the slaughter plant, most products for the retailer are prepared.

1.2.6. Packing and storing

The finishing line weighs product, produces the formed plastic containers, gases and seals the food product in the container, checks gas and metal contaminants, labels the pack top and bottom and logs traceability data. Salamis are packed to different types of wraps and consist of different kind of materials (pet+al+pe; opp+al+pe; pet+al+cast; opa+al+pe; opa+pe; petx+pe; pet+ evoh;pacast+pe; pet+al+pe; opp+al+pe; pet+al+cast).
Pack shows ‘use by’ date, weight in grams, ingredients, price, freezing and storage instructions. Pack prolongs product life, helps to unaltered freshness and colour of the meat, and avoids the problem of product weight shrinkage.
Salamis are stored in a cooled-storage room in the boxes and pallets. Company uses just in time system.

1.2.7. Distributing

Salami is transported, frozen or cooled and often over long distances to retailers, supermarkets. Company uses its own transport trucks.

1.2.8. Consumer

Most of salami is sold to the consumer by supermarkets, retailers. Salami is usually presented fresh to the consumer in a cooled showcase.

1.3. Sausages and salamis making

Sausages are not a new invention; people have been making and eating them at least since the 9th century BC, when sausage was mentioned in Homer’s Odyssey. Many people do not differ salami or sausage as they come from different countries and every country has its own shape ant taste of salami/ sausage.
Sausage making was first conceived as a use for leftovers of meat. Originally, the meat was minced, salt was added, and the resulting mixture was filled into intestines. Today, sausages are made with different types of packaged seasonings, fresh herbs and spices, rusks or breadcrumbs, water or ice, blood, gelatine, organ meats and fat. Different seasonings give sausages their unique flavours, while the addition of grains or breadcrumbs changes the texture. Salami is a dry sausage, usually made of beef and pork, highly seasoned with garlic, salt, pepper and sugar.
The eating quality of pork is a combination of appearance, flavour, tenderness and juiciness. Tenderness is often considered one of the major attributes of importance and several works have concentrated on understanding the basic background of tenderness. These all attributes should be met in finding good kind of pig for producing high-quality salami.
There is general agreement that the pork industry needs to acquire a “license to produce” (Denktank Varkenshouderij, 1999) from the various groups of actors involved. This implies that the pork that is produced and therewith the whole pork production chain (or chains) should not give rise to many or strong societal and economical concerns and should thus be “acceptable” for most, if not all, (groups of) actors in our society.

1.3.1. Generally about salami

Salami is a cured (fermented and air-dried) sausage of Italian tradition. The name comes from the Italian verb salare, meaning to salt. Salamis tend to be more boldly seasoned (particularly with garlic), coarser, drier and, unlike cervelats, rarely smoked. Salamis are usually air-dried and vary in size, shape, seasoning and curing process. With the casing uncut, whole dry salamis will keep for several years. Once cut, they should be tightly wrapped and refrigerated for up to two weeks. Salami is best served at room temperature and can be eaten as a snack or as part of an antipasto platter, or chopped and used in dishes such as soups and salads. 3
Semi-dry sausage should be kept two to three weeks in the refrigerator. Dry sausage is kept four to six weeks in the refrigerator.

1.4. Profile Zwanenberg Food Group

Zwanenberg Food Group was founded in 1929. The company's expansion started in 1981 with the acquisition of Lupack in Raalte. In 1983, a canning factory was opened in Almelo. In addition to the expansion into the area of canned foods, the company also decided to invest more money in the meat and sausages product group. This resulted in the acquisition of the dried sausage activities of De Leeuw in Borne in 1989. 1996 marked the acquisition of Unilever's Zwan brand activities as well as the acquisition of the Linera licence in the Netherlands. These moves strengthened ZFG's canned food and meat and sausages interests significantly. Huls, a specialist in dried sausage, was added to this impressive list in 1998, to be followed by Hooymans (tongue and liver speciality products), Offerman, Kraak (sliced meats) and Cebeco Meat Products (cooked meats and meal components).
Zwanenberg Food Group has production sites throughout the Netherlands as well as two in the UK, and actively markets its products abroad through wholly owned subsidiaries in export markets such as England and the United States of America. Its Canned Foods business unit exports to a great many countries all over the world.
With 1,600 people employed at 14 sites and a turnover of approximately € 350 million (2004), Zwanenberg Food Group (ZFG) is one of the leading producers of meat and sausage products and canned meat in Europe. 4

ZFG sells its products under the brand names of:
Zwanenberg

Zwan

Kraak-vers

Linera

Offerman

Hooymans

Kips'

Huls

Luilekker Land

Limco

Zwanenberg Food Group has five business units:
snacks
meat and sausage products
canned food
individually packaged dried sausages
Zwanenberg UK

Table 2 Products

Product name
Packaging
net weight product
Shelf life in months
Storage condition
Cooked Sausage fine
vacumised
300 g
6
chilled
Cooked Chopped Sausage
vacumised
300 g
6
chilled
Salami with garlic
vacumised
250 g
6
chilled
Salami without garlic
vacumised
250 g
6
chilled
Smoked Sausage
vacupack
250 g
6
chilled
Garlic Sausage Smoked
casing
250 & 800 g
6
chilled
Sausage with Spices
casing
250 & 800 g
6
chilled
Garlic Sausage Natural
casing
250 & 800 g
6
chilled
Frankfurters
vacumised
350 g
6
chilled
Source:www.zwanenberg.nl

1.4.1. Marketing

The company gives a big emphasis on marketing and promotion its brand to be well- known in the home country as well as abroad.
It promotes itself by:
top class brand
cost leadership
web-site in English with general information, contact and export cooperation
sponsoring and TV promotion (First Division football club FC Twente)
excellent market position
advertisements ( newspapers, television, big boards)
innovations, new products on the market ( halal products)

Brand strategy
Zwanenberg Food Group's business units sell their products under the brand names of Zwan, Zwanenberg, Linera, Kips', Limco, Hooymans, Offerman, Kraak-vers and Huls. Zwanenberg Food Group has achieved a strong market position with these brands and the group's policy is to strengthen its existing market position further. Brands are a key instrument in fulfilling Zwanenberg's objective of differentiating the company through perceived quality. Zwanenberg Food Group's management policy is directed at market segments with high added value.
For ZFG, brands are an important means of highlighting the quality of its products. In 1996, ZFG acquired the famous brands Zwan and Zwanenberg, representing top quality in meat products since 1875. Nowadays, ZFG exports its products to more than 100 countries, with Zwan products on offer in 74 countries worldwide.

Export brands
ZFG produces a number of highly valued export brands. These brands have in common that they represent top quality products and, without exception, enjoy excellent market positions in the countries of distribution.

Zwan

Lupack

Niers

Boekos
Bristol
Dutch colony
Homburg
Laan

The world famous Zwan brand enjoys considerable international prestige, while a number of other brands occupy prominent regional market positions. The Zwan brand has a longstanding reputation worldwide in the sector of high quality canned meats. To maintain and to further this reputation, Zwan devotes much effort to advertising and promotion. In these activities, it does not operate alone but in close collaboration with its local importers. Zwan supports them with a marketing budget to sustain the brand's high market position, and can provide a wide range of promotion material.
Cost leadership
The company has been attaining cost leadership in all the sectors in which the company is active. This is achieved by economies of scale and superior production efficiency. Zwanenberg Food Group's size and production volumes position the group well to develop other markets successfully and profitably.
Private label
Thanks to advanced production methods, Zwanenberg Food Group is able to produce chicken, beef and pork products under private label.
Halal-certified products
Since 1994, Zwanenberg Food Group has specialised in producing halal products using certified halal raw materials. In the course of its years of catering to this market, ZFG has selected a limited number of highly reliable suppliers. The entire production is conducted in strict isolation and under close supervision. ZFG markets these products under its own brand name and under private labels and exports them across the world. The halal certificate is periodically tested against strict criteria.
Sponsoring
Zwanenberg is the sponsor of First Division football club FC Twente for many years. The objective is twofold. Firstly, this form of communication has helped to substantially improve Zwanenberg's name familiarity. Dutch First Division football is extensively televised in the Netherlands. Furthermore, this initiative has improved company recognition and popularity on the labour market. Secondly, Zwanenberg uses its sponsorship of FC Twente as a relationship marketing instrument. Major customers and other key stakeholders are regularly invited to attend one of FC Twente's home matches. There are opportunities to exchange the latest industry news in the stadium, see old friends and make new friends and acquaintances.5

1.4.2. Logistics

ZFG has 14 production facilities in the Netherlands and the United kingdom and sales offices in the Benelux, Germany, the United Kingdom and the United States. ZFG exports its quality sausages to over 100 countries worldwide, with Zwan products on offer in 74 countries worldwide.
ZFG exports its meat and sausage products and canned meats to a great many countries worldwide, including Europe, the United States of America, the Middle East, the Far East, West Africa, Asia and Australia.
In most regions, ZFG works with independent agents and importers. Around half of ZFG's product volume is destined for export.
Zwan Export is, by tradition, very internationally-minded. It has its own shipping department to arrange and oversee the transport of its top quality salamis. ZFG is perfectly equipped for the export market. In the interest of updates and support, its export managers frequently visit the importing countries to inspect local conditions and to see for themselves the challenges that agents and sales offices face, and to offer appropriate assistance. They are involved to gain first-hand knowledge of developing consumer habits and the latest market trends.

1.4.3. Quality assurance

Product and process quality are given the highest priority at Zwanenberg Food Group. The group's production facilities are all HACCP certified (HACCP stands for Hazard Analysis Critical Control Points). HACCP is a process management system, which allows ZFG to guarantee the food safety of the products it produces. Working to HACCP principles entails identifying all the critical points in the production process and then instituting control measures to ensure that the process meets quality standards at all times. Both the exporting producers within the Zwanenberg Food Group and the distribution centre in Aalsmeer have been awarded a CEE accreditation. Zwanenberg Food Group has its own laboratory and internal quality control department. Suppliers are audited and raw materials checked rigorously at company laboratories. The traffic light procedure for suppliers is used. Only suppliers with a green light are allowed to deliver their products to Zwanenberg companies. Suppliers with a red light are not allowed to deliver and those with an orange light have to be double-checked. All the results of the monitoring procedure are communicated with the supplier. Detection methods for rapid and accurate indication of the presence of contaminants or undesired micro-organisms were developed. An example is the Calux analysis for rapid dioxin analysis. Furthermore, many Zwanenberg subsidiaries are BRC (British Retail Consortium) and /or IFS (International Food Standard) certified. Both of these quality systems require the institution of adequate verification procedures, quality checks and process monitoring of any aspects that are directly or indirectly associated with the production process, such as employees, factory fittings, systems, hygiene in the broadest sense, product specifications and packaging, building design and factory site layout. 6

1.4.4. Food safety

Company has to take care of the effects of its products to human health. It has to keep all regulations for hygiene and follows advices of EFSA (The European Food Safety Authority) on existing and emerging risks. RASSF ( the Rapid Alert System for Food and Feed) is a useful tool for exchange of information between food and feed central competent authorities what is very appreciative for the company as it exports a lot in the member states. Quick information-exchange allows member states to immediately identify whether they are also affected by a problem, take the appropriate measures and ensure for consumer safety.
(International) memberships:
Fenedex
NCH
PVE (Association of Meat Products)
Certifications:
HACCP
USDA
EEC
BRC
ISO

Fairs:
ANUGA; Kõln - Germany
SIAl; Paris - France
PMLA7

1.4.5. Packaging

Company uses the latest packaging methods; the extensive assortment is packaged in aluminum and plastic vacuum, depending on the customer's wishes and the technical specifications and possibilities. In close consultation with the customer, a professional packaging design can be made for the private label, specifically suited to the local market(s). Salami is vacuumed to safe taste, colour and fresh. It can be sliced. Company has a high-quality flexographic printing service, and also a choice of materials tested for any type of salami and sausage meat, for sliced or cuts of cold meats vacuum or ATM packed.

1.4.6. Important developments

Company keeps close tabs on developments in this field, therein assisted by its own laboratory. It uses the latest machineries and processing methods. Great attention is paid to product development and innovation. Significant swings in international consumer habits and market trends make this a primary requirement.

1.5. Participants in the chain

All participants have to cooperate together because of food safety. Final product has to be safe for health of the consumer.

1.5.1. Farmers

There are 9 980 farmers in the Netherlands. Farmers are people responsible for breeding healthy animals.
In the Netherlands, there is IKB (Integrale Keten Beheersing – in English: Integrated Chain control) to ensure the safety and quality of the pig meat. It provides total surveillance of animal production Key elements of the IKB schemes are exchange of information combined with a system (Identification & Registration) for tracking and tracing animals, and extra requirements relating to feed, hygiene and the use of veterinary drugs. The IKB Pig scheme was introduced in 1992. By the spring of 2000 some 11,500 pig farmers were participating in the scheme. That's about 70% of the total number of pig farmers in the Netherlands. 86 of these farmers comply with the requirements of the Free-Range Pig scheme. 8
The pig production farms are mainly family run enterprises. The origin of the farms date from over 50 years ago when pigs were kept on mixed small family farms on sandy soils to provide extra income as well as manure for cropland. Decreasing farm size as a result of dividing the farm among children and loss of agriculture land due to urbanisation of the rural areas, expanding cities and infrastructure, and industrialisation resulted in more emphasis on pig production. Most pigs are kept in the provinces of Gelderland and Overijssel in the East and the provinces of Northern Brabant and Limburg in the South. Co-operatives developed for purchase and mixing of feed, co-operative banks provided credit; and private feed companies and slaughterhouses settled down in these areas. 9

1.5.2. Producers (company)

Company is responsible for observing all hygiene and food safety regulations. It has its own laboratory for that and quality management. Meat is controlled to prevent contamination on people. They follow international standards and cooperate with many international institutions. A lot of meat goes to export (4. rank in the world) therefore following standards and regulations is much more than important.

1.5.3. Consumers

The Netherlands has a good reputation as a producer of high-quality food. In shops, pork produced according to the IKB system is recognizable by a special PVE/IKB Quality Mark. In the spring of 2000, pork bearing the PVE/IKB Meat Quality Mark could be purchased at over 2080 meat outlets. The majority of these outlets are supermarkets, but they also include over 250 independent butchers, 80 of which are 'free-range butchers'.
Dutch people take care of brands they are buying as well as quality standards keeping.
According the survey the Dutch people are still not confident in the safety of meat and ready-to-eat products. They buy more traditional food. Nowadays, they are discovering new kind products and trusting them more.

1.6. Significant leader

Significant leader in salami chain is the company. It is interconnected among farmers, butchers and consumers. The company needs to know who will be the last consumer and what needs he/she wants to meet. The company needs to know how to promote and sell the product. It is the company’s name which the consumer does see if anything happens.
Company exports the products and makes the “raw material“ famous, too. It makes its brand famous abroad as well as the country itself.

1.7. SWOT analysis

STRENGTHS

WEAKNESSES

1. Location and transportation
infrastructure
2. Farm production efficiency and low
cost
3. Production oriented research
4. Integrated and coordinated
structure
5. Education and training
6. Financing
7. Access to protected EU market
8. Developed quality control system
9.Good export abilities

1. Limited domestic market
2. Manure surplus and environmental
standards
3. Product quality perception
4. Overcapacity in slaughtering
5. Lack of market oriented research
6.High cost and low return for the farmers
7.High land prices
8.Strict governmental regulation
9.Not such a popular product

OPPORTUNITIES

THREATS

1. Reduce cost by rationalizing
slaughterhouse capacity
2. Structural reform of hog and pork
industry
3. Strengthen animal health and
quality control standards
4. Enter non-EU export markets
- Japan
- Other Asia-Pacific markets (Korea,
China)
5. Enter new EU countries’ markets
- Central and Eastern Europe

1. Manure disposal
2. Cheaper feed grain elsewhere in EU
(CAP reform)
3. Competition from other countries
- rebuilding industries in Central and
Eastern Europe
- Taiwanese strength in Japanese
market
- industrialized US hog/ pork production
4. Animal health and welfare standards
5. pork consumption decreasing
6. increasing price for pork

Source: Own study

Success factors:

the Netherlands has a well developed distribution system with excellent highways,
railways, and waterways. Transportation links with the large and modern port of Rotterdam, among others, facilitate exports of salami and meat products from producing areas in Europe and overseas
hog production in the Netherlands has an advantage over hog production elsewhere in the EU through the easy access to imported, low-cost feed ingredients. This can make feed costs lower in the Netherlands than elsewhere and reinforces the cost advantage gained from good production efficiency. It makes the final product-salami less expensive
the Dutch educational system offers specialized and vocational training in agriculture. Many Dutch farmers participate in some form in continuing education and night courses
ability of holdings and research and teaching institution to collaborate effectively within flexible networks and chains
Rabobank is a good source of financing to the farming business. The Dutch government can guarantee loans for hog producers via Rabobank
entering the new markets in the Eastern and Central Europe with increasing ability to compete on price and having products suitable for specific demands
the Dutch industry is taking steps both to improve the health status of animals and products in the whole value-added chain and to make it easier to issue health guarantees to buyers of the product
social climate, policy on taxes and innovation, competition legislation, spatial planning
research and training flexibility, quick introduction of production methods that are more environmentally friendly
farmers’ unions, product boards and cooperatives provide on-going advice and raining
the government operates the system of agricultural information in close consultation with the industry. Several hundreds experts in this system provide information through the media, meetings, and individual support of a well-established system for education and traiing in agriculture and food, in combination with an apparent ongoing interest on the part of government to maintain and improve this system, is a source of competitive strength for Dutch meat producing industry
exports are destined to countries in the EU and overseas, because of low overland transport costs, low-cost pork producing country

1.8. Bottlenecks

Dutch consumers are only now beginning to move away from traditional products
Dutch industry is weaker in market –oriented research
high price of land – higher rental prices, higher costs
declining (stagnating) of pork consumption
the risk of spreading diseases because of high density of farms
2. Salami chain in Poland
2.1. General information about salami chain
Production of salami starts from animal production, from farmers who sell pigs to company. Company takes control of slaughtering of pigs, processing, and food safety, quality assurance, marketing and logistics. Than Sokołów S.A. sells readymade product salami for wholesalers or distributors through its shops.

Drawing 2 Salami chain

Source: Own study
2.2. Farmers and pigs production

Pig production in Poland is very widely distributed. There are over 1 million pig breeders in Poland who keep relatively small herds. This is almost the same number of farms breeding pigs as in entire EU-15. Only 10% of pig production farms have herds exceeding 50 heads. Over 85% of pigs are slaughtered and processed in specialized plants, and rest is slaughtered in the farms for farm households needs. Pig production is growing quickly due to changes in market structures and price relations. Large scale producers can receive much higher prices than smaller ones from meat processing plants for delivering large number of pigs in the highest class of EUROP classification.
Pork producers should have a contract with processing companies. The producers who do not have contract with the companies receive 10% lower price for pork deliveries. It is estimated that the difference of costs between small and large producers is about 15%. There are fifty meat processing companies which are interested in contracts with larger producers, delivering products of high quality in large amounts. For the low producers the alternative is to get bigger or to establish producer groups with other similar producers. For low producers it is also difficult to fulfill requirements established by the European Union. In the smallest farms pork productions do not reach the market and is devoted for consumption in the household.
The contracts between farmers and meat processing companies can cover one or more years. Contracts usually include minimum of delivery/procurement per year, monthly or quarterly amount of deliveries, minimum of pigs per one delivery and payment periods for delivered pigs. Prices differ according to the quality of meat specified in EUROPE classification. Multi-year contracts include additional premiums for delivery on time.10
Sokolow S.A. has off-take contracts for supplies of livestock. It is long-term collaboration of all taking part in the production of fattening pigs, i.e.: producers of breeding gilts and boars, producers of piglets, producers of fattening pigs. Thanks that Sokołów S.A. influence on quality of pig’s meat and salami. Company ensures receiving contractual pigs by using special transport.

2.3. Slaughtering

The whole infrastructure is not only the technological line, but as well a livestock warehouse for pigs, separate sections for intestine processing, cold storages for shock freezing of carcasses, meat-cutting, the hall for meat-handling and packaging, a carwash for trucks, a mechanical and chemical preliminary treatment facility for technological waste.
The technology of meat production is of the world’s highest quality of sanitary and hygienic level. To make this undertaking real, company chose solutions ensuring the quality with possibility of cost minimization like animal gas stunning resulting in a better end-quality of meat, condensation scalding in a scalding tunnel, a singeing furnace, slaughtering waste pressure removal system and shack freezing tunnel operating at -25°C.
2.4. Processing

Salami is made from a mixture of chopped pork, wine, salt, and various herbs and spices. The mixtures include additional ingredients to assist in fermenting: nonfat dry milk, dextrose, lactic acid starter culture (bacteria), ascorbic acid, sodium nitrite, and sodium nitrate. The raw meat mixture is usually allowed to ferment for a day and then the mixture is either stuffed in edible natural or non-edible artificial casings or hung to cure. The casings are often treated with an edible mold (Penicillium) culture as well. Mold imparts flavor and prevents spoilage during the curing process. 11
2.5. Food safety

In order to win in the tough market competition, the producer must be able to affect the material quality even before he buys it. Hence, SOKOŁÓW S.A. has launched and is persistent with a modern, unique system of material quality improved, hallmarked “Into the Future Together”. It is addressed to producers already connected with the Company by off-take contracts for supplies of livestock, and to all others, who apply modern practices and are interested in becoming engaged in long-term contracts.
The program has a comprehensive scope, and it involves long-term collaboration of all entities taking part in the production of fattening pigs, i.e.: producers of breeding gilts and boars, producers of piglets, producers of fattening pigs, fodder producers, companies which improve environmental conditions, banks and branch establishments of "SOKOŁÓW" S.A. The program is continued thanks to the production of high-quality breeding gilts in "Agro-Sokołów 2", which are distributed among producers. Its aim is to establish for the swine producers the optimum economic and breeding conditions for production by:
* ensuring high quality breeding gilts and boars, top quality fodder and comprehensive advisory services in respect of feeding and options for improvement of environmental conditions;
* the possibility for modernization and modern equipment of production facilities, as well as securing appropriate veterinary prophylactics, all on preferential terms;
* the possibility to use preferential bank credit for the financing of gilts and boars, piglets and fodder.
The program ensures sales demand and development opportunities to the breeders, a sales market to the producers of devices and fodder, and a high quality material to the Company. The final outcomes are the products of Sokołów on the shop shelves, combining top quality and the best price.12

2.6. Quality assurance

In accordance with the quality assurance policy, the clients, as they buy SOKOŁÓW products, must be confident that the products are healthy, tasty, durable and convenient.All plants of the SOKOŁÓW Group produce in accordance with good production practices, under constant supervision of the Veterinary Inspection, applying the HACCP control system. The Jarosław plant already meets ISO 9002 requirements; it has also obtained the AQAP-120 certificate, allowing production of goods for the needs of NATO forces. The implementation of the ISO 9001 Quality Assurance Systems in other plants of the Company is at the completion stage (award of appropriate certificates is expected this autumn). SOKOŁÓW S.A. has export licenses to EU countries, USA, Canada and Korea.
The quality and durability of the Company’s products is owed to modern technologies and well chosen recipes. All the plants are equipped with modern packaging lines (including MAP technologies), which allow the products to be delivered up to the growing expectations of the market.All this, however, would come short of ensuring commercial success, if the products were not simply tasty. Therefore, a product development centre has been established, which not only develops new product technologies, but also to assess and improve their taste qualities – also on the basis of consumers’ opinions.13

2.7. Marketing

Because marketing focuses on customer needs and wants, this requires that companies identify these needs and wants and then develop marketing programs to satisfy them as a route to achieving company objectives. 14
Sokołów S.A. is one of the biggest meat company in Polish meat industry, with share capital amounting to 100 ml USD, sales volume - about 160 000 ton, sales value - USD 500 million and market share about 15-16 %.15
Sokołów S.A. is very popular. How much it is presented on graphs below.

Graph 1 Spontaneous Sokolow S.A. brand awareness

Source: Own study based on http://www.sokolow.pl

Graph 2 Awareness and buying of Sokolow S.A. brand

Source: Own study based on http://www.sokolow.pl
Sokołów S.A. is very innovative; the company offers costumers a wide range of product assortment. There are four brands of salami: Gold, Salami z Dębicy, Gratka, Sokolik,

Gold brand products are true gold among all smoked meats available in Poland. Carefully composed seasonings, appropriate technology which makes use of specialized devices and maintains high sanitary and hygienic standards, ensure the distinguished flavor and smell. Production of salami is based on oldest, natural methods of preserving raw meat, i.e. salting, fermentation and drying. The specific production processes of the Gold series products allow for their long storage without losing taste and smell qualities. The consistency of these cold-cuts allows their cutting in very thin slices.

Salamis from the Iglomeat salami plant in Dębica comes in a wide choice. Gourmets are offered fourteen types to choose from. The salamis are available in many coverings, e.g. green pepper, cheese, jager fix, onion or garlic. The high quality and variety of the range will satisfy even the most demanding of clients, and the moderate price will certainly encourage to trying this delicacy.16

Considering the needs and preferences of customers, Sokolow S.A. successfully launched the new “Gratka” (“Bargain”). The new brand soon became for many buyers a sign of very good price and guaranteed quality. A wide range of products in all product groups, as well as full availability in distribution networks make it easier for customers to make their choices.
“Gratka” are products made according to carefully prepared recipes and highest hygienic standards. These characteristics, supported by the producer’s extensive experience, determine good taste of the products, fully appreciated by consumers. Products of the “Gratka” brand are distinguished by a special label with the name suggesting an attractive price of the product.

Sokołów S.A., in co-operation with Mother and Child’s Institute has prepared meat products especially for the sake of the youngest ones. Products of Sokolik line have been developed to satisfy children’s everyday demand for the most important elements, such as: balanced animal proteins, hemo iron, zinc and other bio-elements and vitamins, including mainly vitamin B12.
Moreover, Sokolik products do not contain gluten and lactose. High quality of products is guaranteed thanks to strict supervision of sanitary and veterinary services as well as of ISO and HACCP quality assurance systems which are applied by the producer.
Marketing of the products is accompanied by the promotional campaign focusing on the Sokolik figure. Sokolik is a friend of all the children, who guarantees that no meal will ever be boring. 17
2.8. Logistics

Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers’ requirements.18
For company, thanks to possesing own transport- trucks,it is possible to keep complete cooling chain from the producer until to the consumer with monitoring of temperatures (by GPS system).
To ensure freshness and high quality, all products are delivered on a daily basis directly from the production plant to the shops using own special transport trucks.
Sokołów S.A. possesses about 400 proprietary shops and 43 own warehouses. Presence of salami products is noticeable on shelfs of most hyper and supermarkets, as Auchan, Carrefour, Geant, Kaufland, Makro, Minimal, Selgros, Tesco, Real and in wholesale network..

2.9. Recent developments

Recently, Sokołów S.A. has concluded the agreement with the Creditors’ Council regarding the purchase of Pozmeat Plant in Robaków, near Poznań. The Management Board’s proposal in this matter was fully supported by the representatives of the Group’s strategic investors i.e. HK Ruokatalo and Danish Crown, the members of the Supervisory Board.
The acquisition of Pozmeat Plant confirms the continuation of Sokołów Group’s involvement in the consolidation process of meat industry in Poland. Significant increase of both production and slaughtering capacity creates new prospects for further dynamic development of the Group. It will also favour to increase the sales revenues as well as strengthen the Group’s position on the domestic market, particularly in western part of Poland.
In the opinion of the Management Board it is also essential to create hundreds of new jobs, which should decrease local unemployment. The acquisition of the Plant in Robaków will also allow to introduce further production specialization in the Group plants and development of cooperation with breeders and farmers within the program “Together into the Future”. The location of the purchased Plant close to the western border is of great importance as well. It will boost the Group’s export possibilities into the EU countries as well as improve the recognition of Sokołów brand and its position on these very demanding markets.
Igloomeat-Sokołów tries all time to meet or even exceed customers expectations, that’s why on market appear new products.
Igloomeat-Sokołów introduced new salami in slices in the market. New is also kind of package and graphics (use to every brand of salami in slices). Also salami refined in slices appeared on market. In this way company tries to diversify of costumer needs.

Igloomeat-Sokołów introduced on market salami with natural mould: salami bretońskie, salami bretońskie with pepper, salami bretońskie-wianek, salami segedyńskie.

Salami Chips Savoury and Salami Chips with garlic are products with natural spices and sliced, which can be used as a snack in travel or in cinema. One bag weight 80g.19

2.10. Leader in the chain and chain organization/cooperation

Significant leader dominating in this chain is company producing salami Sokołów S.A.
Company is responsible for buying pigs from farmers. Thanks contracts between farmers and company it’s possible to control pigs production and influence on quality of meet. It’s mean that Sokołów S.A. takes part also in first step in chain of pork production. This close cooperation give company stable delivery from proven farmers.
Sokołów S.A. is also responsible for slaughtering pigs, processing salami, quality of salami, packing, labeling, marketing and distributing products to shops and wholesalers.
Sokołów S.A. is very big and good prosper company Sokołów S.A. is one of the biggest meat company in Polish meat industry. The firm is all time developing in different ways, one of them is buying other small companies. Thanks that Sokołów S.A. has very important position on market and is still expanding.
Sokołów S.A. try to differentiate their products. That is why company offers to costumer wide choice of product assortment. Thanks that everybody can find something interesting.
Individual suppliers, producers and marketers who are associated through a supply chain coordinate their value creating activities with one another and in the process create greater value than they can when they operate independently. 20
In food chain in salami in Poland there are different kinds of cooperation, for example special programmes. They are aimed at the development of a modern raw materials base and a closer co-operation between the company and producers of pigs and oxen, and also producers of fodder and semen. The co-operation is based on contracts for the supply of animals concluded for many years, according to which the partnership is awarded for the loyalty, quality and promptness of the supplies.
Sokołów S.A. as a significant leader has major influence on salami chain organization. Company collaborates with farmers, is liable for a lot of process, as a slaughtering, marketing, logistics, distributing products to wholesalers and to the own shops. That’s why Sokołów S.A. organizes almost all chain, from the farmers to the consumer, controls most of steps in salami chain and thereby risk is minimized.

2.11. SWOT analysis

Strengths
good relationship between suppliers and producers
strong traditions in pork sector
good marketing
high level of technology in companies producing salami

Weaknesses
a lot of suppliers are small-sized farms
farmers get the small part from profits, low income
increasing cost production of pork
lack of knowledge
lack of cooperation between farmers

Opportunities
cooperation of farmers to become bigger
price increase (better for farmers)
producing of regional products
large European market
greater export after joining EU
new investors
inflow of new technology

Treats
diseases
price increase (worst for customers)
competition with European farmers and salami producers
high costs of modernization Polish farms

Source: Own study

2.12. Bottleneck

Almost 10.5 million people lives in household which use agricultural land. It is 27.4% of nation’s population. Over 40% of farms, especially smaller ones, produce mostly for their own needs (self-supply) and very little for the market. Large parts of Polish agriculture have features of peasant economy. Average size area of a farm is 5.76 ha and in the group of farms with 1 ha and more average size is 8.44 ha. There are strong ties between farm and household. In farm families self-supply of food is very important.
Several factors influence a slow process of organization of producers groups:
attitudes of farmers (distrust of partnerships and cooperatives, tradition of individual activity, negative past experiences);
economic reasons (large capital diversity of agricultural producers, unwillingness of strong farms to participate in organizations associating also weak farms);
lack of cooperation patterns in rural society;
lack of leaders who would undertake organization of producers groups.

Small scale and dispersion of pork producers makes difficult to influence significantly contracting conditions offered by meat processing companies. It would be recommended to cooperate between small producers in order to deliver bigger amounts of good quality pork and receiving higher prices.
Small producers of pigs have much worse access to the market than bigger ones. Cooperation between farmers in the form of producer groups or cooperatives is developing very slowly.

It is necessary to further integrate elements of meat market on the basis of commercial ties. In most advanced EU members integration of food chain rests on private ordering. Governments support establishing of vertical organizations integrating producers, processors and trader of food products arranged in branch structures. What more, agricultural producers need stronger organizations in order to represent their interests. There is also lack of sufficient contracting arrangements between actors of food chain in Poland. It makes relations in food chain unstable and non predictable. In order to reduce market asymmetry, small and medium producers should organize producer groups. The process of establishing such groups is in the initial stage in Poland. 21
3. Salami chain in Hungary

The salami is one of the most beloved foods in Hungary. The meat – mostly the pork, beef, mutton, and the fowl – fills the most important part of the feeding. Still fifty years ago, the number of the animals was the symbol of the status. In 20th century, after world wars, a significant part of the population left the countryside, and migrated to the cities. These acts played down the importance of the animal husbandry. The Hungarian animal husbandry was blooming before 1914, but the world war killed the demand. The horrendous poverty, the ticket system to the meat, bread, and the basic foods broke down the developing of meat – including the salami – industry.
But the recipes, the manufacturing processes were deep in the drawers. The stabilization after the world wars revived the demand of the meats in higher quality. The market leaders, which survived the wars, the lootings set back the production on the level before the wars. The salami become wanted food again.
In our days, more Hungarian meat factories produce a wide choice of salamis, kolbász (which is a special Hungarian sausage), and meat products. In my report, I would like focus on the biggest Hungarian salami factory. It calls PICK SZEGED Salami Factory and Meat Processing Plant Co. The seat of the company is in Szeged. Szeged is the 4th largest city in Hungary. The city is the regional centre of south Hungary. This area is very famous for the agriculture. Notable part of the population is living in villages, and hamlets. This environment is very useful for the market garden, and to grow pigs, cattle, and sheep. 22
This report will try to introduce the reader to the chain of salami manufacturing and the most familiar types of the Hungarian salami, in the aspect of the Pick Szeged Salami Factory.

3.1. The way from the farmers to the shops

The natural makings - at the different parts of Hungary - are reasonably various. Almost fifty per cent of the countryside is plain. In this area is very famous for the boondocks. Several family lives in little farms, isolated from the cities. The main sources of income spring from stock-raising, and from the agriculture.

One of the parents or both of them are working in the family business. They grow animals – pigs, cattle, sheep, and poultry – in the farms, and in the right time they can sell it to the forestallers.

They are the first chain link in the salami chain. This style of the living, the premium income, the permanent demand of the pigs, cattle, etc. ensures the adequate supply. These farmers and smallholders grow most part of the necessary amount. The residual part of the required deal is from hog producers.

Source: Own Study
The Pick Szeged, as a forestaller contracts with every supplier. It’s essential, that the cornered raw material has to be in high quality. The most part of the average products can be produced from normal meat. These don’t need any special meat. But there are some products, which could be made from pigs, which have special qualities. The company ensures with contracts the persistent high quality, and the trustiness. The farmers know the requirements of the Pick, the type of the pigs, feed, the optimal weight, and etc. The breeders have two groups. In one of the group are the mikro, and little breeders, they have at the most 20-30 pigs on his farm. In general they don’t have own engines, trucks, or combines. They buy the feed for the pigs. Another group of the breeders have a medium-size business. They are specializing in only one or two type of the pigs. Generally they have own trucks, engines, and every necessary equipment to grow up the pigs in high quality, and within a short time.

3.2. The special processing of Pick Salami

The special Hungarian salami requires a very meticulous and precise work. Only the first class stock of meat is allowed to process the salami. The commodity is made from old, senior pigs around 180-200 kg. The fibre is going to divide into pieces 25-30 dkg, and they are going to dehydrate 48 hours long, in -4o C. With this procedure can be manageable the moisture content of the meat. Another necessary ingredient is the bacon, which also has to be prime bacon. Frozen meat and bacon are going to cut and combine in a special engine, called a kutter. But the most important is the size. It has to be like rice. After this operation the next step is the seasoning. It shouldn’t be too spicy. The use of the pepper is not aloud, because it’s visible on the slices which are worse the appearance. The flavouring is made by some garlic and red paprika. At the end they are going to add a nitrate salt mix. The prepared meat pasta is going to get into a special type of bowel. It has very high steadiness, good resistivity, micro pore structure. The micro pores are very important, because the special type of mould can go inside through this micro pores. This “nobly mould” takes the characteristic taste of the salami. The last step is the cold fumigation (it takes 8-10 days ), and curing ( 90 days ).

3.3. The wide palette of food by Pick

The Pick, as the biggest meet factory in Hungary, and as a market leader, produces a wide range of meat products. Also the fresh meat, and salamis, hams, smoked, and non-smoked products. The company try to cover the full Hungarian market, and demand. The main profile is based on the dried products. These products are able to sell in the whole country, and abroad. The fresh products are taking a smaller part of the product scale, because these can only be sold in the near from Szeged, from the company. To transport the fresh meat, is too expensive, and it would be give an extra advantage for the concurrency. So the most important part of the product palette is the smoked, dried, packed, transportable products.
The leader is the special Hungarian Wintersalami, which is available in four different sizes. The normal is 1,25 kg, the middle is 0,8 kg, the tourist 0,4 kg, and the mini 0,25 kg. The company has to thank their reputation for this product. Everybody knows it in Hungary. The famous Pick salami is a beloved ingredient of every breakfasts, dinner, snack party, etc.
Of course, the Pick couldn’t be growing so large with only the success of salami. They recognized ad the beginning, that to the dynamic growing they need high quality products, motivated and qualified employers and maybe the most important: varied palette of products. Today the scale of Pick’s products is very wide. It consists of more than one hundred type of products.
The symbol of the company is the Original Hungarian Wintersalami. In addition are very important

Further salami sorts:
Szegediner Paprika Salami
Juliska Salami
Ungar Salami
Dry sausages without mould:
Snack hot sausage
Balaton Salami
Puszta Peitsche
Paprika sausage
Paprika sausage pair
Debrecziner
Cabanossi
Chilli snack
Sortiment carton
Hot Chili sticks
Hell-fire sausage
Makó hot sausages
Salami Snacks sausage
Witch sausage
Favorit sausage middle
Further products23:
Mangalitz smoked fat
Mangalitz paprika fat
Paprika fat
Edelham sliced
Spring cut
Pick Doktorkaya kolbasa
Pick Lyubitelskaya kolbasa
Délhús Bacon sliced
Ringa Products
Although the Pick is most beloved brand in field of salami and meats in Hungary, the leadership knows, without continuous developing the profitability would be decreasing in short time. The Pick invested a lot of money to the exploration. In the focus is healthy. New products, lower fat content, new type of pigs, naturally the food displays, and expositions make possibility to ensure the customers about the persistent development.

The newest informations about the prises, accolades are available on the official website of the Company.

3.4. Marketing

It is not enough to produce the best, in high quality, with experienced and motivated workers; the main aim is the profit. To sale the products sometimes could be so big challenge, than vary the processing chain. With good marketing acts, well prepared advertisements, product presentations, tasting, promotions, etc the demand could more times larger, than without.
The national and international experience, high qualified experts, young and motivated teams are the key, to achieve a dynamic, shtick, and attractive marketing activity. The Pick, as market leader invests big amounts to employ the above mentioned persons.
Tasting in hypermarkets, promotions in shops, advertisements in magazines and newspapers, and of course hard marketing campaign on TV channels. These tools and the above mentioned high qualified employers created an appealing image, which is functioning as an engine in the business.
Very important, that the traditional Hungarian Pick salami is one of the most famous Hungaricums. The reputation, the experience, and high quality fought it out, that the Pick’s logo gets a place usually in advertisements, exhibitions, and tourist attractions of Hungary.

3.5. Logistic system

At the beginning of the production the Pick produced the 100% of products at the main domicile, which situated in Szeged. The transport was transacted eminently by trucks, or sometimes by train. Hungary is not a too big country. Through the small size of the country the logistic system, the carriage of products was based on “daily transporting”. It means that the incoming orders were aggregated by deadlines, and the company ensured the needed amount of products every day. The majority of the products were transported by cooling trucks. The majority of processing concentrated in the main domicile, in Szeged, that’s why that the central of the logistic system situated also in Szeged. Through sort distance, also the furthest point of country is attainable by trucks every day.

3.6. Mergers and Acquisitions

Today the Pick is the biggest meat, salami, and paprika factory in Hungary. The company is the leader member of the Pick Holding, which comprises more big companies in the country. The main owner of Pick’s shares is Sándor Csányi, who also the CEO of biggest Hungarian bank, the OTP. Mr. Csányi, as owner tries to buy up, the strategic important competitors24.
Presently the Pick Holding comprises four big companies, such the Herz Salami Factory, Ringa Meet Factory, Red pepper and Cannery Factory of Szeged, Délhús Co., and the Butchering Factory of Makó. The number of employers is over 3000 in the main domicile, and much more, than 7000 in the whole holding.

3.7. Quality assurance

The good reputation based on quality, home and international recognition, first-class products – among these the PICK salami as a symbol of Hungaricums, furthermore many of up-to-date products – necessitate the co-ordination of facilities, modern knowledge, experience and preparedness.
The right objectives and their fulfillment are supported by the commitment and effort of managers and workers, the legal and ethical functioning of the Company as well as by TQM results, ISO 9001:2000 quality management system and also the foodstuff safety controlling system based on the internationally certified HACCP system, too. All these enable the company to preserve the food industrial leading role at home, the good reputation in Europe and in the five continents hereafter. The successes up till now inspire the Pick to make further efforts and maintain a continuous strive for learning and developing.
Consumers require more and more consciously – and with good reason- that only those raw and processed products could be marketed which have maximum safety beyond the expected and accustomed sensory and nutritional value. The HACCP method (a regulation for ensuring food safety) is more and more widely used as a tool for reaching the above requirement.
The producer and trader are equally responsible for safety. The food processor has to ensure that the products, produced by him, are not harmful for health, they are safe and have uniform quality. The trader has to ensure that the products, the food, handled by him, maintain their safety and quality properties during the trading process. These expectations are summarized in laws and regulations which are in harmony with the EU prescriptions at the time of joining to the union implicitly. One of the biggest challenges for the producer and trader is to monitor and abide the domestic laws and orders controlling food processing and trading. These laws prescribe the steps of monitoring from the farm to the fork and the demonstration of the food safety. The individual identification of live animals and the traceability of the carcasses and meat parts deriving from them are very important in this chain.
Pick Szeged Rt. pays special attention to traceability, the adjoining veterinary control and safe slaughtering process operations. These altogether ensure the prevention of animal diseases, the healthy condition of the animals slaughtered by us, safety and a guaranteed quality of pork carcasses meat parts and meat products. Pick Szeged Rt. has taken part in the project for elaborating the national labelling and filing system of pigs. Our corporation has established a computerized system for registration of the ENAR code and data of owners of the animals to be slaughtered, so this way the identification and traceability could be comprehensive from the breeder to the slaughtered carcass/meat parts25.
Beyond the identifiability and traceability of living pigs there is a strict veterinary and food hygiene control at Pick, involving the individual investigation of each pig to be slaughtered and the veterinary inspection of carcasses on the slaughtering line. The veterinary inspection of each pig and the applied identification system ensure that PICK Szeged Rt. delivers pork carcasses and meat parts deriving only from pigs which are identifiable and unconditionally suitable for human consumption.
The inner regulation of the Company is in harmony with this authority control. It carries out a process control within the framework of a quality control system focusing on hygiene, food safety and quality in the course of the slaughtering process and the meat product processing. Our quality assurance system and food safety control are regularly audited by the SGS Hungary. These audits testify of our dedication to quality hence Pick Szeged Rt. does not only declare its commitment to food safety and quality but it is audited by an independent organization. We apply a monitoring and supervisory control over the entire processing procedure which demonstrates the hygienic and safe operation objectively, fulfilling not only the EU but the USDA FSIS requirements as well.

3.8. Food safety

The main effort is to develop such realization of the mission and strategy of PICK SZEGED Co. which is based on first-class products and the satisfaction of purchasers and consumers, which ensures the equilibrium among the interests of the owners, co-workers, society and environment, and which blends century-old traditions with modern manufacturing culture. 26
To this end, the company develops his products and technology, alimentary and gastronomical knowledge, and they strengthen his participation on the market, represent the country on the international market and in many organizations, sponsor the institutions of knowledge, health and culture.
The aim of the quality policy is to assure the excellence of products, the safety of food hygiene, the efficiency and creative atmosphere at the workplace, these form the pillars of short- and middle-term programs. The steadily revised and renewed objectives determine the continuous measures and acts carried out in favour of the development of manufacturing and commercial cultures.

3.9. Recent developments

To hold the market leader position, it’s very important, to develop day to day. The Pick, as a modern european company research the claim of costumers continually. After several years Hungarian customers also realized the important of healthy feeding. The Pick follows these claims, and center of development is the healthy. Consumers require more and more consciously – and with good reason- that only those raw and processed products could be marketed which have maximum safety beyond the expected and accustomed sensory and nutritional value.
The HACCP method (a regulation for ensuring food safety) is more and more widely used as a tool for reaching the above requirement. Many new products testify persistent expansion. The most famous is the Hungarian Mangalitze pig. This type of pigs has a very healthy meet. The measures shows, that the cholesterol contain of this meat is very low. The Pick developed more products of this type.

3.10. The leader of the chain

Although the chain of salami processing comprises more than seven steps, the leader of this chain is the company. We can say, that only the piggeries, so the farmers are outside of this chain. Almost the 90% concentrated in the company. This case takes much more organized, controlled, and amenable the processing flow. The company controls the quality of meet at the beginning, but the rest of the chain is happening in the company.

3.11. SWOT analysis

Source: Own study

3.12. Bottlenecks

However the Pick has market leader position in the country, have to know the most dangerous bottlenecks. Example competitors in the Hungarian meat and salami market. A new competitor, which can offer something new, that the Hungarian customers would like to buy, but the supply is not available. The big size of company could be advantage, and also disadvantage. The bargaining position of employers is much bigger, than in middle, and small size enterprises.
Now days the company has a very hard, and stabile position in the Hungarian market. Good relationship with the suppliers, and farmers, good working retail network, etc. These circumstances could be also dangerous, because the company could became too confident in the business policy.Conclusions

Analysing collected informations connected with salami chains in different European countries as Hungary , the Netherlands and Poland, it is stated that:

The size of farms is very different in each country. The comparison of every country shows that the size of farms in Hungary and in Poland is very similar- under 10 ha and average number of pigs is less than 20. Average size and the number of pigs of Dutch farms is much bigger than in Poland and Hungary.
Chains in every described country are very similar. Production of salami starts from animal production, from farmers who sell pigs to company. Company takes control of slaughtering of pigs, processing and food safety, quality assurance, marketing and logistics. Then company sells readymade product salami for wholesalers or distributors through its shops.
People’ tastes in each country are different. More spicy and smoked types of salami and sausages are more beloved in Middle-East Europe, than in the Netherlands. The Dutch people prefer garlic in salami, and fresh taste.
The contracts between farmers and salami producers are very important in salami chain, in each country, because in this way the companies can improve and control the quality of raw material. In each country there is this kind of close collaboration, but it is more difficult in Hungary and Poland, because of size of farms.
The development of countries determinate the level of transportation systems. The Netherlands are high developed, rich country, so have very high level of infrastructure and logistics, alike Hungary and Poland.
In Poland and Hungary there is lack of knowledge and new technology in pig’s production. These countries should learn from the Netherlands how to produce good quality and safe products, get information about new technologies and developments.
High costs of modernization Polish and Hungarian farms makes difficulties in farming.
In the Netherlands there is low cost of feed but the price of land is high, therefore companies have to pursue to keep the price of salami stable to compete with new member states of European Union.
After accessing Hungary and Poland to EU these countries have gained the opportunity to enter other larger markets.
In every compared country the significant leader in salami chain is company producing salami. In this way company controls and organizes almost whole salami chain.
Company producing salami has the major responsibility for quality control and food safety of products.
Using available information and dates it is said that salami chain is very complex system consisting of many activities as pig breeding, slaughtering, meat processing, packing, distributing and consuming. Each of this activity is very important for the chain because if one of them is interrupted the whole chain stops working and alternatives for re – working must be found.

Recommendations

The Netherlands should more focus on the market than on research.
Promotion of salami and pork is very important as well as to make Dutch consumers sure in consummating of pork without any doubts.
The cooperation between producers and consumers can be improved by government’s regulations and the European Union standards.
Polish and Hungarian farmers should focus on horizontal collaboration, make groups, create boards, cooperate together to have larger influence on salami producers.
After accessing Poland and Hungary to European Union there is big opportunity for pigs and salami producers to have new larger market and withdraw extra subsidies from EU funds.
Polish, Hungarian and Dutch pigs and salami producers should work together, exchange information, knowledge and create international system to share experience.

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Chain in salami