4 growth trends in the global processed poultry market

Dec. 13, 2018

Whether it’s creating more processing capabilities or entry into new markets, industry players are keen on growth.

Manufacturers of processed poultry meat have been capitalizing on expansion opportunities recently. Whether it is an expansion of their processing capabilities or entry into new markets, industry players have been keen on taking advantage of expansion strategy and growing their market share.

According to Allied Market Research, the global processed poultry meat industry will generate revenue of $289 billion by 2020. Following are some recent activities in the industry that have potential to drive market growth.

1. Moroccan doors open for U.S. market players

A 14-year ban on U.S. poultry products and meat in Morocco has recently been reversed. Though there was a free trade agreement with Morocco in 2004, the The poultry operators need to obtain a health certificate, which is in "accord with a valid model provided by mutual agreement between the Moroccan National Health Security Office of Food (ONSSA) and the competent US authorities," according to the Moroccan Ministry of Agriculture. In addition, there must be a certificate outlining that animals will be slaughtered as per the Islamic halal religious requirements.

Extensive negotiations led by the U.S. Trade Representative’s Office this year came to fruition and led to the opening of the market. The National Chicken Council (NCC) and the U.S. Poultry & Egg Export Council (USAPEEC) applauded the news.

"We’re very pleased, after 14 years since a free trade agreement was signed between our countries, for poultry to finally to have access," said Jim Sumner, president of USAPEEC. Sumner outlined that the initial quota for imports will be limited. "The good news is that by 2024 for turkey and by 2030 for chicken, we will have full access," he said.

With this ban reversal, the U.S. becomes the only country to have duty-free access for chicken in Morocco, allowing U.S. manufacturers to have processed chicken and turkey products in the market. Initial estimations show that Morocco will be a $10 million market for U.S. manufacturers and will contribute to more revenue over time. Many U.S. companies will look to expand in Morocco as a result.

 2. Expansion in new countries

Charoen Pokphand Foods (CPF) announced its plans to expand into Thailand and other foreign countries. The company said the rise in demand in international markets, especially the Association of Southeast Asian Nations (ASEAN), was the driving force behind the decision.

Sooksunt Jiumjaiswanglerg, co-president and CEO of agroindustrial business for CPF, outlined that the firm would focus on overseas growth. There will be a focus on expansion of export sales and foreign operations will be shifted from domestic consumption to exports.

CPF’s production takes place in nearly 30 countries. Under the company’s expansion plans, there will be an integrated poultry project in Vietnam along with feed mill breeding farms and a processing plant. The plant is expected to be completed by the end of 2019, and the export of processed chicken to Asian countries such as Japan will begin. Overseas operations of CPF in countries such as India and the Philippines showed profitable figures in the first half of 2018.

3. Expansion of new processing capabilities

Along with expansion into new regions, processed poultry manufacturers have been taking steps to increase capacities. ZPM Sława, a meat processor from Poland, plans to raise processing capacity after its acquisition of a plant in Poland’s western region from Tarczyński. Anna Starosta, sales and marketing director at ZPM Sława, told GlobalMeatNews that the company intends to scale up the production from 40 tons to 60 tons of various meat products per day after the acquisition of Tarczyński. The current workforce would be maintained for now, but the firm will increase the workforce over time to increase production capacities.

Starosta said that the company will focus on development of new products based on market demand and trends in nutrition including new lines of turkey and chicken. There will be promotion of Indusie turkey meat frankfurters, which are low-fat and contain 95 percent turkey meat. Though the company is gaining major revenue from its domestic market, it has made its presence in foreign markets, too. Its plans for 2019 include investment in existing storage capacities.

The company plans to expand its foothold in foreign countries such as Japan, Georgia and Hungary. Along with offering poultry, ZPM Sława also provides beef and pork products. It has nearly 110 products in its portfolio.

 4. New products reflecting changing consumer preferences

Consumer preferences have shifted considerably, and processed poultry meat manufacturers have driven their innovation based on them. Butterball, a processed turkey meat manufacturer, has renovated its turkey brand with new product offerings and consumer-friendly labels and packings. The company has hired Jeff Mundt as a vice president of research, development and innovation. He brings 25 years of experience in food innovation, new product launches and branding.

Bill Klump, chief marketing officer of Butterball, said, "We have a significant growth opportunity to build out our product portfolio through aggressive, thoughtful innovation efforts, and we need a champion to head that initiative and drive our brand."

Klump added that the research conducted by the company has shown that the needs of core consumers have changed considerably and the company has assigned a dedicated team to find new product opportunities. The newly released product portfolio will contain no artificial ingredients, hormones, steroids, nitrates or nitriles. Moreover, these products will be minimally processed. The new packaging design is intended to ease shopping and outline benefits that are essential for consumers.

Pratik Kirve holds a bachelor’s degree in electronics and telecommunication engineering and currently works as a content writer at Allied Analytics LLP. Kirve may be reached at [email protected].

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