1.1 POULTRY PROCESSING AND POULTRY PRODUCTS
Poultry processing has a centuries-long history, having progressed from manual small-scale operations to highly automated large-scale industrial processes. The progression of the poultry processing industry towards automation is a result of high demand for poultry products owing to the spike in global population. This article gives a brief overview of the poultry industry, its drivers and challenges, new technology, and an understanding of the value chain.
According to the USDA (United States Department of Agriculture), ‘Poultry processing is the term used by the poultry industry to describe the conversion of live poultry into raw poultry products fit for human consumption.’ Poultry product production has grown rapidly during the past decades, contributing significant quantities to the world’s food production and consumption. Poultry processing is an important part of the economic development of many countries and has been received positively by several governments seeking to boost their countries’ economic performance, including introducing policies in support of the sector. For instance, the Government of India has made several policies to promote its Pink Revolution focused on the meat and poultry processing sector, such as no excise duty or income tax on the meat and poultry sector, transport subsidiaries, 100% permitted FDI to tap available opportunities in the sector among others.
The rise in the demand for processed poultry products, especially in the developing world coupled with the rise in per capita consumption of protein has led to the expansion of the poultry processing industry in recent years. Moreover, as per OECD/FAO Agriculture Outlook, poultry will continue to be the fastest-growing meat over the next decade and will take 47% of the market. Thus, the market is undergoing tremendous changes, such as the growing demand for quality products, sustainability, and safety.
The following snapshot shows the market for feed additives used for poultry livestock. It indicates that the demand for feed additives is poised to rise significantly for poultry. It is being driven by the sustained and growing popularity of poultry protein and products. This in turn reflects the high demand for poultry processing as well.
Innovations in poultry processing technology have played a major role in the evolution of the global poultry processing market, which has witnessed huge advancements in diverse aspects. Innovations with respect to automation and quality enhancement are under the radar of the major players in this industry to make it more efficient, cost-effective, and profitable.
1.2 TECHNOLOGY RELATED TO POULTRY PROCESSING
The poultry industry has witnessed several changes over the years. For instance, automation has become a big part of the industry. The industry is changing due to a lack of skilled workforce, climate change, and a shift in eating habits. Additionally, the industry giants are focused on making their production automated, energy efficient, and sustainable. Technology integration would aid producers in dealing with issues of automation, efficiency, and sustainability challenges faced in the industry.
WATER JET CUTTING
Water jet cutting is a technology that utilizes a high-pressure stream of water to precisely cut or shape materials. In the poultry processing industry, water jet cutting systems are employed for portioning and cutting poultry products. This technology offers several advantages, including precision, cleanliness, and versatility.
Water jet cutting is versatile and can be used to cut a variety of poultry products, including bone-in and boneless cuts. It is suitable for cutting through bone, meat, and cartilage without causing damage to the product. It also results in reduced product waste. The precision of water jet cutting minimizes product waste by ensuring that cuts are made exactly where needed. This is beneficial for optimizing yield and reducing costs in poultry processing.
HIGH-PRESSURE PROCESSING (HPP) TECHNOLOGY
Food processors have shown exponential growth in interest and demand for HPP over time. The cold pasteurization method known as HPP is mostly used to get rid of germs and pathogens that are present in food goods. It helps maintaining the minerals and vitamin content of food products while also enhancing their quality. Additionally, it is utilized for the processing of a variety of food items, including fruits, vegetables, meat, fish, juices, and others. HPP turns out to be a successful substitute for traditional heat pasteurization.
HPP (High-Pressure Processing) is widely utilized in the processing of poultry products and aids in maintaining the nutritional value of the product. Salmonella, Listeria, and E. Coli are among the microorganisms that are eliminated from HPP-processed poultry. A number of chicken processors have started using HPP treatment in order to extend product shelf life without compromising the integrity of the label. Additionally, HPP aids in lowering the usage of chemicals and preservatives such as salts and lactates in poultry products.
1.3 KEY DRIVERS IMPACTING THE GROWTH
The poultry processing market is projected to grow at a significant rate. The market has been growing due to the rising production and consumption of meat and poultry products, and the advancement of technologies in the poultry processing industry. Moreover, the industry is driven by several macroeconomic factors such as an increase in world population, a rise in global per capita income, and the open world market.
Increasing demand for processed poultry products – According to the OECD-FAO Agriculture Outlook 2021-2030, poultry meat is expected to represent 41% of all the protein from meat sources by 2030. Therefore, the demand for processed poultry products, such as ready-to-eat and ready-to-cook meat products, is rising globally. The growing proportion of millennials, the number of working women, and on-the-go consumption patterns are factors driving the demand for processed meals, including processed poultry products. Around the world, a lot of processed foods are consumed, including sausages, canned meat, cured meat, cooked meat, and skinless and boneless chicken. Turkey, Iraq, Cuba, Japan, and the United Arab Emirates are among the nations with one of the highest demands for processed poultry products.
Rise in per capita consumption of proteins – The rise in per capita consumption of proteins is a significant trend observed globally, driven by several factors. Proteins are essential macronutrients that play a crucial role in human health, contributing to muscle development, immune function, and overall well-being.
As per a research article published in October 2022, titled – ‘Impact of COVID-19 pandemic on consumer behavioral intention’, there was a significant link found between the consumption of nutritious meals and consumer purchasing habits. It also stated that post-pandemic, consumers are more focused on their health, security, and safety. Thus, COVID-19 is expected to boost the demand for protein ingredients at a much higher rate in the global market. An increase in awareness among people to strengthen their immune system to prevent themselves from being infected easily is compelling them to maintain a healthy lifestyle and proper diet.
This shift in preferences contributes to a higher per capita consumption of protein-rich foods. Poultry products such as chicken, turkey, duck, and quail products are well-known sources of proteins. This is thereby propelling the market for poultry processing.
1.4 POULTRY PROCESSING RESTRAINTS AND CHALLENGES
Disease Outbreaks – Disease outbreaks, such as avian influenza (bird flu), can have a severe impact on the poultry industry. Outbreaks may lead to mass culling of birds, trade restrictions, and economic losses for both producers and processors. The need to cull infected birds to prevent the spread of the disease leads to the loss of entire flocks. This loss not only includes the cost of the birds but also investments in feed, housing, and labor. This can further disrupt the supply chain which can in turn affect the availability of poultry products in the market.
Moreover, outbreaks can cause countries to impose trade restrictions, including bans on the import of poultry from affected regions, to prevent the spread of the disease to their own poultry populations. Poultry farmers will certainly be affected too due to increased production costs owing to investments in biosecurity measures, invest in disease testing, and incur additional expenses related to veterinary care and medications. These increased costs can strain the financial viability of poultry operations.
Therefore, disease outbreaks, particularly those affecting poultry, pose significant challenges to the poultry industry. The impact of disease outbreaks can be widespread and can affect various aspects of poultry farming and processing.
Increase in consumer appetite for vegan diets – With greater awareness of climate change and animal suffering, more individuals are opting for healthier alternatives for the planet. The growth in awareness related to the health benefits of adopting a vegetarian and vegan diet has led to an increase in the demand for plant-sourced food products. According to the Good Food Institute, the sales of plant-based foods grew three times faster than overall food sales in 2021. Manufacturers have been forced to develop novel sources of plant proteins due to the rise in the number of vegans and the preference for vegetarian diets. This rise in the number of vegan and vegetarian consumers is expected to pose a threat to the poultry processing industry in the long term.
1.5 VALUE CHAIN ANALYSIS
The value chain for the poultry processing market gives a more comprehensive understanding of the effective distribution of products to the end-user and stakeholders. It helps understand the market by recognizing the most valuable activities. The value chain analysis also helps understand the market for poultry processing and the relationship between stakeholders and their participation. The value chain for the market is highly integrated. It includes several activities, such as poultry farming, live bird transportation, poultry processing, distribution, and marketing and sales to the end users of the product, each of which is elaborated as follows:
Poultry Farming – This step includes breeding, hatching, and other poultry farm operations. The value chain begins with breeding programs to produce poultry breeds that are optimized for meat production. Hatcheries then hatch eggs to produce day-old chicks, which are sent to poultry farms.
Poultry farmers raise the chicks to maturity. This involves providing proper nutrition, housing, and healthcare. The goal is to produce healthy and well-developed birds for eventual processing.
Live Bird Transportation – This step includes transporting birds to processing plants. Once the birds reach market weight, they are transported to poultry processing plants. The transportation process is a critical link to ensure the welfare and health of the birds during transit.
Poultry Processing – It is the most important step of the value chain. It includes various steps such as slaughtering, evisceration, chilling, cutting and portioning, quality check, packaging, among others. The step also includes R&D to enhance processing techniques to make the overall processing more efficient and optimized.
Distribution – The distribution channels are the backbone of any marketed product as they act as a bridge between manufacturers and end users. Poultry product manufacturers and retailers are a few key buyers of poultry products. Distribution is possible through both online and offline channels.
Marketing & Sales to End Users – The end users in the industry are restaurants, food service providers, retailers, and others. The poultry processing industry constantly develops new ideas to meet consumer demand and sustainability needs. A competitive market, economic effects, disease outbreaks, and consumer shift towards vegan diets are a few of the difficulties faced by the industry.
1.6 POULTRY PROCESSING MARKET: ECOSYSTEM MAPPING
The market mapping of the ecosystem is categorized into demand-side and supply-side companies.
The supply-side players in the poultry processing market consist of entities involved in the production and processing of poultry products. These players contribute to the supply of poultry products to meet consumer demand. Key supply-side players in the poultry processing market include – poultry farmers, hatcheries, feed manufacturers, and others.
The demand side of the ecosystem includes entities and individuals that consume and purchase poultry products for various purposes such as retailers, restaurants, foodservice providers, food manufacturers, and others. These players contribute to the overall demand for poultry products in the market.
Moreover, it is to be noted that in the poultry processing industry, there are few players that are integrated into the value chain. These players are involved from the start to end of the value chain. For example, players such as Cargill, Incorporated (US) had acquired Sanderson Farms and is a feed manufacturer as well and JBS S.A. (Brazil) which offers fresh and frozen meat along with prepared meats commercialized through brands.
1.7 WAY FORWARD
The poultry processing market is poised for a dynamic future marked by a combination of technological innovation, sustainability initiatives, and evolving consumer preferences. As we move forward, embracing advanced processing technologies, such as automated deboning systems, AI-driven quality control, and sustainable packaging solutions, will enhance efficiency and ensure product quality. The industry’s commitment to animal welfare, reduced environmental impact, and responsible sourcing will play a pivotal role in shaping its trajectory. Collaborative efforts across the supply chain, including farmers, processors, and retailers, will be crucial in adapting to changing market dynamics and meeting global demand.
Striking a balance between meeting the rising demand for poultry products and addressing challenges such as disease control, regulatory compliance, and environmental sustainability will be key for sustained growth. By fostering innovation, adopting sustainable practices, and staying attuned to consumer trends, the poultry processing market can navigate the path ahead with resilience and responsiveness to create a future that is both prosperous and sustainable.
