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2018-10-08

Interview with Peter Wesjohann, CEO of the PHW Group

Interview with Peter Wesjohann, CEO of the PHW Group, largest German poultry breeder and processor.

Berlin, 13 November 2018. A study - conducted by the Justus Liebig University in Gießen on behalf of the Heinz Lohmann Foundation and published in July 2018 - revealed that, overall, Germany remains an attractive location for agricultural and food sector enterprises. During the period from June to October 2017, the institute carried out three rounds of surveys, amounting to a total of 234 interviews with experts from the following four industries: baking, brewing, dairy, and poultry. In the third round, the experts addressed the results from a representative online consumer survey with 2,009 respondents. This online survey also covered preferences for vegan foods, insect protein, and cultured meat.

1) Based on the study results, what do you think the prospects for cultured meat, produced in a laboratory, really are?

In my opinion cultured meat will play a growing role as soon as products are available. The market will certainly continue to grow as acceptance and familiarity increase, and further product refinements are made, so that we might someday no longer be talking about a niche product. However, I don't like black-and-white scenarios. We believe that traditionally produced meat will still maintain a large market share in 30 years' time.

2) The PHW Group has already secured shares and access to the technology. What were the reasons for taking this action?

We believe in growth through diversity. In more specific terms this means that we, as a company, have always taken unconventional paths. We began investigating alternative concepts of animal husbandry long before the organic boom, thus enabling the consumer to consciously choose a specific animal husbandry concept.
It all started in the year 2000 with our pasture-raised chicken (our "Weidehähnchen") from free-range management, followed in 2002 by our organic chicken. The valuable experiences we gained during that time served as a basis when defining the Private Farm Poultry Concept (Privathof-Geflügel) in 2011. This focuses on increased animal welfare and is marked with the entry level of the animal welfare label, awarded by the German Animal Welfare Federation (Deutscher Tierschutzbund). In march 2015 we launched a diverse range of vegan products to offer consumers who wish to follow a meat-free diet a good alternative to poultry meat.
After developing our vegan product range, we took the next resolute step at the beginning of the year when we began exploring the options of cultured meat. If we as a society aim to reduce our consumption of conventionally produced meat, there are three stakeholders who all have to act in unison: food manufacturers, food retailers and the consumers. My task as a food manufacturer is to create the widest possible range of diverse and convincing products. That's what I am doing.
We offer consumers a broad product range from conventionally produced poultry meat to Private Farm Poultry, all the way to a vegan product selection. Moving forward, we will also contribute to making cultured meat available to consumers in a few years' time.
This is the strategic background on which our investment in SuperMeat is based. We want to stay on the cutting edge and secure the expertise we need early enough, in order to profit from potential market opportunities in the future. Therefore we are broadening our range of products and defining ourselves as a provider of high-quality proteins.

3) It seems that this young, more urban product is not attractive to farmers. Should the production be carried out by farmers or is it more likely that new, urban laboratories will cultivate these cell cultures? Will this accelerate the structural change of agriculture?

I can imagine many different scenarios - including production on farms. But let's be realistic: It is impossible to provide a serious and reliable answer to that question at this time. Notwithstanding this, the overall market for poultry and thus poultry husbandry will continue to grow. As such, poultry farmers will profit from this trend in the coming years, especially if we manage to offer consumers an interesting and broad product range as we move forward.

4) When do you expect regulatory market approval for Europe?

We have not yet dealt with this aspect. First we need to develop real products. Once these are foreseeable, we will speak with the authorities.

5) According to the study conducted by the Heinz Lohmann Foundation, 16 percent of the respondents would already be willing to buy this kind of meat. This percentage is higher than the organic market share. Will this figure accelerate the decision for an early launch?

Over the past year, we have intensively evaluated different start-ups that are planning to develop cultured meat. After an extensive process of due diligence, we have chosen the Israeli start-up SuperMeat. And this is for one main reason which is very important to us: The company applies a practice-oriented research approach. SuperMeat is focusing on launching products from the meatmix range as quickly as possible and is not - like some others - attempting to master the high art of developing a chicken breast fillet. The researchers are aiming to launch marketable products within three to five years. Naturally, once products are available, we not only want to use our extensive knowhow regarding logistics and the production of convenience and vegan products, but especially our broad sales network, which will help the launch of SuperMeat on the German and the European Market.