The world chicken
and meat industry face an uncertain future, judging by a long report published
by Meatingplace Magazine about a speech recently to the Chicken Marketing
Summit at Hilton Head, South Carolina.
Richard Kottmeyer, vice president of agriculture and food for
investment banker Luxoft, combs through reams of Big Data numbers to spot
trends, and he provided 10 “insights”.
1. The trend toward
antibiotic-free is going to “bite back.” To the extent that procuring AB-free
poultry complicates the supply chain, adds smaller producers to the mix and
adds to the risk of some food safety snafu, Kottmeyer said. “Statistically,
it’s almost certain that one of the companies in this room in the next five
years will get ‘Chipotled’,” he said, meaning its sales will plummet because of
a food-poisoning scare.
2. China’s new policy of encouraging less meat and
egg consumption is “going to give a great deal of credence to the ‘let’s eat
less meat’ movement … [and] we are going to see that that is one of the more
important trends in lowering protein consumption on a global basis.”
3. Trends in flavour
profiles favour vegetables and will add to the decrease in protein consumption
in developed countries.
4. Animal welfare is
going to replace GMOs in the food chain as the hot-button issue among consumers
and the industry will need to redefine its marketing messages accordingly. The
question of what constitutes “welfare” is an emotional one, Kottmeyer
explained, while GMOs (genetically-modified organisms, mainly Roundup-Ready
corn and soybean varieties) and the question of their efficacy and risk is one
that can be scientifically calculated. “Consumers are more comfortable talking
about emotions than data. It’s not an issue of science when you’re talking
about how consumers feel about how animals are being cared for.”
5. The vocabulary in
discussions of animal proteins are shifting from buzzwords, such as “organic”
and “natural,” to benefits-based “systems languages,” such as “heart healthy,”
“protein” and tangible benefit statements. Consumers are “confused over what
the words themselves mean. They want to know tangibly what (those qualities)
are going to do for them,” Kottmeyer said.
6. Consolidation will
continue in the global protein industry, but “not from the buyers you would
expect. … Consumer want niche-ification, but from major players, not small
ones.” So look for big companies to continue snapping up smaller ones with
niche markets to offer.
7. Despite a global trend
toward eating less meat, U.S. consumers will not be convinced to do so on
health grounds primarily. “We simply have too much confirmation bias regarding
meat consumption,” Kottmeyer said. “We simply want to believe that protein is
good for us.”
8. Consumers tend to fall
into one of three categories: the “healthy aware,” who are convinced they know
what’s good and bad about food, and can be “hard to deal with”; the
“disoriented” consumer, comprising most middle-class, Middle America consumers;
and the “not interested.” The protein industry’s best marketing bet is to move
the “disoriented” consumer into the “not interested” category by making them
feel comfortable about the animals’ welfare and other social issues related to
proteins. “Invite them into the operation. Marketing to them via ‘clean label’
claims simply won’t work over the long term,” Kottmeyer said.
9. Poultry is not winning
in the “chicken-as-protein” category, Kottmeyer warned. Recent consumption
increases are more a reaction to historically high beef prices than they are a
love affair with chicken dinners. His research has shown that while poultry is
seen as more healthful and kid-friendly, “The way I feel about eating beef or
pork suggests there’s more protein in it than poultry,” Kottmeyer said.
Chicken’s relatively low cost of production per pound, however, favors market
growth in developing countries. “Likewise, a trend toward vegetable consumption
lifts poultry more than other trends. It combines better with those flavors,”
Kottmeyer said. “Don’t see a lot of poultry tied into vegetable consumption,
but it should. The combination is one of the clearest indicators in the data.”
10.
Long-term changes around population shifts and changes in
culture and preferences related to food will have a much greater effect on
future protein consumption than any trend-conscious, “buzzword” marketing that
processors may be investing in now. Kottmeyer argued that data suggesting high
consumer interest in “sustainability” is essentially a pre-determined response
based on the way the questions are asked. Consumers come down on the side of
“greater transparency” because they want to give the “right” answer, not
because they really want to have to sift through additional information.
