06 May 2015 | Online since 2003



8 March 2013|News,Pigs,Poultry,Produce

Can China's poultry move out of pork's shadow?


In China, poultry producers have long lived in the shadow of the pork industry, which remains the meat of choice throughout the nation.

Whilst this trend is evident in the highly correlated prices between each market, a new report suggests that China's poultry industry is beginning to develop its own growth path.

The poultry sector has great growth potential thanks to changing food preferences and growing demand from the ever-increasing quick service restaurants (QSR) sector.

To capitalise on this potential, producers must address a number of barriers that constrain the industry at present, namely concerns around food safety and poor farm management.

Poultry production in China is expected to continue to grow faster than pork thanks to the efficiencies it offers to both producers and consumers.

The poultry industry is already the most industrialised protein segment, producing some 17 million tonnes of annual output which accounts for 18 percent of global production (second only to that of the US).

Analyst Chenjun Pan, said: "Low current per capita consumption rates and a growing acceptance for eating poultry meat amongst the younger generation, creates a strong growth potential that should enable the industry to take a meaningful share of meat consumption away from pork".

Much of the growth will come from the burgeoning QSR and emergent frozen/processed food sectors. At present, QSRs are the major driving force for poultry demand thanks to a double-digit growth rate and menus biased to poultry.

China's leading QSRs, KFC and McDonald's, have increased their outlet numbers to 4,000 and 1,500 respectively, with KFC claiming 39 percent of the fast food market. Even if the QSR segment fails to maintain this rapid growth rate, there is still considerable opportunity in China's nascent frozen or processed food market.

Poultry production in China is still much less industrialised than in other leading producers such as the US, Thailand or Brazil.

Vertical integration is quickly gaining popularity (a model adopted by poultry leading players including Fujian Sunner and Shandong Nine-Alliance), but contract farming is likely to remain the dominant business model as a result of prohibitive capital requirements, a lack of experience and rising land costs.

In addition to production scale, China lags other poultry producing countries in terms of farm management, productivity, food safety and disease prevention.

Disease outbreaks have brought serious consequences to producers and processors in the past few years; outbreaks as far back as 2003's combined Sars (Severe acute respiratory syndrome) and the H1N5 scares have caused panic about poultry consumption.

In 2012 alone, avian influenza and other diseases have affected the industry several times. Similarly, the feed model has come under fire with consumers raising concerns over the use of growth promoter and medicines in poultry production.

It will take a considerable amount of time for poultry companies to rebuild trust among China's consumers.

China's poultry market has more growth potential than any other meat industry. The current product portfolio has not fully reflected the advantages of poultry meat and poultry companies are expected to benefit from growth in new segment, especially the development of a wider range of frozen processed products.

In the long term, the industry should focus on boosting efficiency through further industrialisation and crucially on improving food safety controls. If the industry can overcome these hurdles, poultry is well placed to move out from behind pork's shadow in the coming years.

Download




Comments


No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


5 May 2015
ASSISTANT MANAGER
Develop your skills by preparing and serving a great range of delicious grills, spit roasts, farm assured chicken and fish......

16 April 2015
Tyre Bay Fitter
Tyre Bay Fitter Due to continued expansion we require a Tyre Fitter to join the team at our busy Milton Common Depot. The wor...

16 April 2015
Solicitor Agriculture
Benefits: Competitive. Location: Cambridge and Northampton The role Our client’s Agricultural Business Unit is continuing to ...

23 April 2015
Research Agronomist – Crop Trials - North West
Urgently needed to join a well-established R&D Team – we are looking for an experienced Field Trials Specialist, R & D Agrono...

30 April 2015
Dairy Canvasser
Dairy Sales Canvasser. We are currently contracted to the largest dairy doorstep delivery company in the UK. The role respons...



Top stories you may have missed
10 April 2015 | Agri Safety

The permanent eradication of Bovine Viral Diarrhoea [BVD] in Scottish cattl...


10 April 2015 | Dairy

The abolition of milk quotas in Europe on 1st April has resulted in a numbe...


10 April 2015 | Cattle

The top 14 milk producing countries in Europe will increase their productio...


10 April 2015 | News

Matt Ware is the NFU's head of government and parliamentary affairs, based ...


10 April 2015 | Arable

There is a 'desperate need' to improve farmgate returns given low incomes a...


9 April 2015 | Arable

Rapid stem extension, after a slow start to spring, is likely to create spl...


9 April 2015 | Finance

The time has come for landlords to expect to see reductions in farm rents, ...


8 April 2015 | Cattle

Cogent’s reputation as a source of the highest calibre sires has been enhan...


8 April 2015 | Arable

The spread of exotic and aggressive strains of a plant fungus is presenting...


7 April 2015 | Animal Health

The FSA’s new Food Crime Unit wants the industry to share information, some...