Innovation in the poultry industry must evolve from the ideas of simple product development and "value-added" to meet the sector's ongoing needs in the current economy, according to Paul Fox, CEO of O.K. Foods and panelist on the National Chicken Council's industry outlook panel held on October 11.
See video of the panel discussion here.
The idea of innovating, said Fox, might have been defined along different terms in the past. “I think that innovation is really important," he said. "I think that really by definition if you want to be better than average you have to differentiate yourself in some way. That could very well be along the lines of product development.” But there are now other ways to look at it. “I think we have to be innovative in the way we think," said Fox. "And I think the definition of what that looks like in practice changes, and changes fairly rapidly.”
Even in current economic times, however, it's important to upgrade your facilities and stay in peak condition, said Michael Popowycz, vice chairman and chief financial officer of Case Foods. “You’ve got to find a way to try and get one step ahead; you want to be a little bit more competitive than everybody else,” he said. “In terms of product development, as we go into a downturn, it’s going to be awful difficult with $8.50–$9 corn to try and create new products and market those products over the next 12-month period.”
The panel also discussed the near futures of food service and international trade as regards the poultry industry. According to Thomas Hensley, president of Fieldale Farms, the constant innovation in the food service sector when it comes to chicken products means only good things for poultry producers. “Our food service customers are expecting a 3 percent to 4 percent increase in sales this year, so they’re optimistic for the future and so am I,” he said.
International trade is also expected to show an upward trend in 2013, according to the panel. “2012 was a great year for the industry export-wise, and I think 2013 will be as good if not better," said Popowycz. "Beef prices are going to be pretty high over the next 12 to 18 months, and I think that will help a lower-cost protein alternative for individuals. Exports to Mexico were good, exports to Canada were good, sub-Sahara Africa has turned into a great virtual market for U.S. product. I see that continuing to grow in the 7–9 percent range per year.” India is another market to watch, according to the panelists. The middle class has tripled in the last five years, said Popowycz, and with the country's poultry consumption up 8 percent to 10 percent per year, "we need to get in," he said.
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