Charting trends in the animal protein sector – 2018 conference review
Senior executives, managers and investors in meat manufacturing, marketing and retail from across Asia converged at the Anantara Siam Hotel in Bangkok, Thailand on 15-16 January 2018 for an exclusive two-day conference to gain valuable insights into consumer demand.
Presentations and speakers at the 2018 conference included:
Consumer trends that impact the meat industry
David Hughes, Conference Chairman and Emeritus Professor of Food Marketing at Imperial College, London, UK welcomed delegates. In his opening address, he said the uncertainty in mature markets, environment issues, the digital and technology drive that is reshaping consumption habits and rapid urbanization are some trends that are bearing upon the meat industry. “Food shopping is driving consumers to mindful choices such as natural products that are ethically and/or locally produced and those with environmental claims,” he said.
Catering for busy lifestyles
Addressing rapid urbanization in key cities in Asia and its impact on living spaces and time, Philip Steggals, Managing Director of Kadence International, a global market research company, feels strongly that urban consumers are ready to pay for convenience. “Convenience is driving food choices as urban citizens are time-strapped and have to contend with smaller kitchens. Technology is offering a premium for time and delivery on demand for food and groceries is growing significantly,” he said.
Asean millennials: One size fits all??
This presentation was delivered by Goro Hokari, Prompohn Supataravanich and Ampa Theerapatsakul of Hakuhodo Institute of Life and Living Asean. They defined millennials as those born between 1980-1999. Within this group too there are behaviour patterns and mind-sets that vary and shape consumer behaviour. They cannot be put into similar clusters, they surmised.
CPF wants to be sustainable kitchen of the world
There will be around 9 billion people in 2050. On the food supply side, more natural resources are needed to feed the population, which has the potential to harm the environment. Thailand’s Charoen Pokphand Foods (CPF) has implemented sustainability strategic directions. According to Patcharaporn Sagulwiwat, CPF’s Assistant Vice President of Corporate Social Responsible & Sustainable Development, the company is leading the way to sustainability through food security (by providing tasty, safe and good quality food products), self-sufficient society (by developing win-win partnerships), and balance of nature (by reducing environmental footprint). “By implementing the sustainability program, we want to be a sustainable kitchen of the world,” Ms Patcharaporn said.
Convergence of food service and food retail
Food service and food retail are converging, adjusting to consumers who are looking for convenience across channels. They want food that is convenient to buy, prepare, consume and dispose, according to Prof David Hughes. This trend has led to the growth of ready-to-eat and fresh convenience. E-commerce giant Alibaba is a good example where late last year it took a USD 2.9 billion stake in China hypermarket operator in a bid to fuse e-commerce and physical stores. Another example is convenience store chain 7-Eleven in Hong Kong which converges its offerings including ready-to-eat food, snacks, bakery, and coffee among others into one. “The future is omni-channel because one product doesn’t fit all channels. And food firms will ponder on linking the physical and digital presence (phygital),” said Prof Hughes.
FCR is growing in Asia
Fast casual restaurants (FCR) are growing in Asia, driven mainly by the growth of the middle-class population that is looking for better & healthier choices and more varieties. This category also has higher menu selling prices. “This category is quick to grow with smaller retail sites. However, it’s a competitive market and maintaining loyalty is challenging,” said Rob Gosney, Australia-based Protein Product Development and Innovation Advisor. Continuous improvement, which is part of innovation, is important in this category. For instance, Singapore-based Zest Group that has two FCR brands (ABC and ALT Pizza), is going to develop new animal protein (chicken breast, pork and beef) products to meet its customers’ demand for high standards of quality and safe food, said Mr Gosney who is helping the company to innovate.
Asia needs to transform on ‘producing more with less’
Asia continues to drive the growing appetite for meat, according to Jean-Yves Chow, Senior Vice President, Food & Agri Sector Coverage at Mizuho Bank. This is supported by strong underlying global growth contribution where emerging Asia contributes more on the growth. However, Mr Chow said in terms of ‘producing more with less’, Asia is the major factor in the meat-feed-grain equation. Asia needs to transform. The first option is to change from backyard farms to mega farms to optimise production efficiency. Smarter trade options may also work. For instance, China is importing more pork which means less reliance on corn, soy and water as every 1kg of pork imported equates to at least 3kg less of feed production.
Growth disruptors in the chicken business
Population and demographics, consumer habits and mindfulness and technology are some of the disruptors in the poultry sector today, said Gordon Butland, Director G&S Agriconsultants Co Ltd, Thailand. “By 2050, the global population will be 9.7 billion and Africa, India and Asia will account for the highest numbers. This then would determine where and how your business will grow,” said Mr Butland. He added that growth disruptors also include changing consumer habits and perceptions of the food industry, activists that lead opinions and consumers who are mindful of food sources, animal and employee welfare, and the environment.
The science of product innovation
Robert van Barneveld, Group CEO and Managing Director – SunPork Group, emphasised that understanding a target market involves more than looking at the market as a whole as in say China or Thailand. “You need to dive down into understanding your target consumer. At SunPork, we adopt the Karo model in which products are defined by three elements – basic, performance and excitement,” said Dr Barneveld. “All products have to have some basic elements. We then add performance attributes that create excitement, and this is what differentiates the products,” he said.
Growing inquiries for raised without antibiotics certification
The ban on use of antibiotics in livestock farming is a hot issue. KFC for instance, announced last year that it will discontinue purchasing chicken treated with antibiotics used in humans by 2018. Animal protein producers, including Asia-based producers, are making changes. One of the ways is by being certified by NSF International, a global independent organisation in public health and safety. Peter Bracher, Managing Director for Asia Pacific said more players in the chicken sector are applying for the raised without antibiotics certification. “We are now working with several animal protein players in Thailand, with enquiries are also coming from Vietnam, India and China,” he said.
Plant-based meat alternative from Singapore
Growing population, climate change, and sustainability and disease concerns led Ricky Lin to set up a start-up focusing on innovative functional foods called Life3 Biotech, based in Singapore. Helped by Leong Lai Peng from the National University of Singapore, he developed Veego, a plant-based protein which he says is a healthy & nutritious, natural, sustainable and versatile product. “The product was created not to displace meat, but to be an alternative,” said Mr Lin. On market opportunities, he said plant-based protein as a meat alternative is estimated to reach USD 5.9 billion globally by 2020 where the greatest growth will be in Asia.
Food producers should be proactive towards food safety
Food safety scandals have global repercussions, according to Sara Aparicio Hill from the international law firm K&L Gates. At the same time, food safety scandals are a real challenge for authorities. In China for instance, the government insists on ‘strictest’ controls in food safety and urges harsher penalties for those who endanger the public’s well-being. Towards food safety issues, Ms Hill recommended that food business operators should be proactive and make compliance with food safety rules as part of the company culture.
Product innovation is critical
Product innovation is a critical element of an effective pig carcase disposal model, according to Robert van Barneveld, Group CEO and Managing Director of Sunpork Group of Companies in Australia. He explained that innovation strategy needs to take price pressure of primals to account for the fact that 40% of the pig carcase sells below the cost of procurement. “A robust product innovation process is required for success. Consumer trends and modern markets are well suited to the introduction of new and innovative pork products,” he said. Sunpork’s German pork knuckle is one of the company’s product innovations with good sales. Preferred by multi-age consumers, the product has ‘low-risk’ production, high yield, simple process, long shelf life, simple packaging, great presentation and good margin.
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