New challenges for butchers

Dagema is an abbreviation for „Da(erme)-Ge(würze-Ma(schinen)“. That means „intestines, spices, machines“ in German. The company was founded by eight specialist wholesalers in 1953 to build synergies in the purchase of classic articles for butcher shop needs. This is still Dagema‘s highest priority.

Today Dagema eG cooperates worldwide with about 1,000 contracted suppliers. New business areas go beyond classic butcher’s trade. That’s why Dagema is a competent counterpart for foodstuffs industry, food retailers and gastronomy. We talked with Dagema management board member Markus Isenmann about actual market developments, future requirements and the impacts of the Corona virus.

Dosen-Zentrale: Mr Isenmann, what are the main subjects Dagema is caring about at the moment?

Markus Isenmann: The classic stationary market is changing a lot. Every year about 400 butcheries disappear only in the Southern federal states of Germany. The price transparency provided by online trade causes a price erosion. At the same time some of our wholesalers have difficulties in pricing their services such as consultancy or storage. This situation is aggravated by the lack of specialists. It doesn’t matter if lorry drivers, salesmen or IT specialist are wanted – it’s difficult to fill employment vacancies. There is especially a lack of trainees.

„Because ot the decreasing number of butcheries our members reorient themselves and develop new business areas: gastronomy, food retailing and the planning and implementation of objects.“

Markus Isenmann, Dagema board member

Dosen-Zentrale: The impacts of Covid-19 pandemic have left deep marks in many sectors of the economy. What does Corona mean for butcher’s trade concretely?

Isenmann: Due to the Corona crisis many consumers return to values like regionality and artisan food production. Butcher’s trade could benefit from this development. On the other hand the catering business, an indespensable second pillar for most butchers, has nearly completely fallen apart.

Dosen-Zentrale: Many Dagema members are gastronomy and catering suppliers. What are their sorrows, expectations and hopes for business at the end of this year?

Isenmann: This will depend on the devolopment of new infections and the protection measures which will be derived from that. Naturally we hope the limited earning opportunities of gastronomers won’t be reduced even more.

Dosen-Zentrale: Do incidents like the ones that recently occured at Tönnies company have an impact on Dagema, its members and the single butcheries?

Isenmann: We see two controversial impacts: On one hand every meat scandal increases the number of consumers who eat less meat or give it up completely. On the other hand the butcheries that have an artisanal production and are rooted in the region offer an alternative for conscient consumers who would like to avoid cheap industrial meat.

Dosen-Zentrale: How has Dagema’s business changed in the last five years?

Isenmann: Because ot the decreasing number of butcheries our members reorient themselves and develop new business areas: gastronomy, food retailing and the planning and implementation of objects. As competition has increased significantly alternatives to the low price segement beyond the existing premium products are required for all market sectors.

Dosen-Zentrale: Which trends or rather developments do you see in the butcher business?

Isenmann: Obviously the specialisation and the occupation of market niches whether biological, regional, premium quality, catering or mobile sale. Only butchers who have a conclusive concept will be able to survive the fight against the sausage and meat counters of food retailers.

Dosen-Zentrale: What are the requirements for your suppliers?

Isenmann: Brand manufacturers are asked to develop innovative ideas to distinguish from the enty-level price segment. Suppliers have to be more flexible in the future as mass products will be replaced by individualised products in small amounts.

Dosen-Zentrale: What are the advantages and chances of a purchasing network like Dagema now and in the future?

Isenmann: They are the same as in the period when Dagema was founded. The tougher competition caused by online trade will force the remaining stationary dealers to bundle their purchasing volumes. On the other hand investments are needed to access new markets and these investments can’t be managed by a single dealer. In times of digitalisation it’s extremely important to provide information about suppliers, article data and documents. Dagema creates synergies for the whole group rendering this service.

Dosen-Zentrale: Mr Isenmann, thanks for this interview.

Foundation: 1953
Employees: 54
Headquarters Willich, North Rhine Westphalia, Germany
Members: 28
Total area: 33,394 square meters
Stockage area: 13,330 square meters
Suppliers: about 1,000
External sales: more than 630 million euros