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News and analysis on the global poultry
and animal feed industries.
on February 8, 2010

Growth in China’s turkey industry

In the past, turkey was mainly eaten in China by foreign residents or tourists, but this is changing.

Eight years ago, Zhou Xiufen, a forty-four year old housewife in Shandong province, saw turkey – a rare bird in China – for the first time. After Zhou injured her legs in a car accident, she had to rest at home alone. In order to help her kill time, Zhou's husband bought her three turkeys. These turkeys produced 81 babies in 2002 and 2003. "Once a stranger walking past saw my turkeys, and he spent 100,000 yuan to buy 30 of them," Zhou said. Even though Zhou did not know why the man bought her turkeys, she realized that she had a potential business opportunity.

Zhou started her own company, Weifang-based Zhouxiufen Turkey Foods Ltd., which has since grown to 300,000 birds last year. Her company sells day-old turkeys, frozen turkey meat and processed turkey products across China.

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Eight years ago Zhou Xiufen started with three turkeys. Last year her company, Weifang Zhouxiufen Turkey Farm, raised 300,000 turkeys. Photo courtesy of Weifang Zhouxiufen Turkey Foods Co., Ltd.

Although Zhou's story might be the best known in China, other companies are also getting into the turkey market, taking advantage of consumer interest and new distribution channels. According to the USDA FAS, China's turkey consumption increased 588% from 2004 to 2008, from 8,000 metric tons to 55,000.

Local producers cannot meet rising demands due to the small scale of their operations. As a result, imported turkey amount by weight increased from 4,000 tons in 2004 to 50,000 tons in 2008, according to the USDA. Imported turkey accounted for 91% of total China’s turkey consumption last year. "China is a growth market for the turkey industry," Hu Jijun, a manager at the Beijing office of the USA Poultry & Egg Export Council (USAPEEC), told WATT PoultryUSA. "China's broiler consumption is 600,000 tons every year, while its turkey consumption is only 50,000 tons. China's turkey market still has huge potential." By October 2009, anticipated turkey consumption and turkey imports will reach 65,000 tons and 60,000 tons respectively, according the USDA.

New consumers 

In the past, turkey was mainly eaten in China by foreign residents or tourists, but this is changing. "Chinese people replaced expatriates as the major consumers of turkey products," Hu said. "This change is reflected in the import volume of different types of turkey products. Turkey parts account for the largest amount of total turkey imports now."

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Hormel’s smoked turkey breast meat in City Shop in Shanghai, China.

Unlike many Western customers, Chinese do not place a premium on meat. Instead, cooked turkey parts, typically wings or legs, are popular among Chinese people. As a result, the import amounts of frozen turkey parts, frozen whole turkey and prepared turkey respectively reached 45,157 tons, 15 tons and 3 tons in 2008 respectively, based on the latest statistics from China Customs.

During the past three years, turkey parts import rose sharply, in line with increasing Chinese turkey consumption. Imported frozen turkey parts increased from 16,756 tons in 2006 to 45,157 tons in 2008, an increase of 169.5%, according to China Customs. By comparison, imported frozen whole turkeys and imported prepared turkey increased by 20.5% and 53.5% during the same time period.

In the big cities in particular, it has becoming easier for consumers to buy turkey. "Sometimes, I make a turkey sandwich for my Chinese wife for breakfast," Yotam Ariel, a twenty-six year old expatriate in Shanghai, told WATT PoultryUSA. "She likes Hormel's smoked turkey." Both cooked turkey meat and fresh turkey meat have been sold in China’s retail sectors – such as supermarket chains Metro, Carrefour and Lotus.

Turkey, Chinese-style

Turkey meat – turkey breast meat in particular – has long been consumed by foreigners in China, popular in restaurants catering to expatriates. But today, local distributors are adapting turkey to local tastes, and to new distribution channels.

"Domestic processing plants usually purchase turkey parts – such as legs, wings and gizzards –  to make cooked turkey products," Yu Guifa, an independent turkey distributor in Jiangsu province, told WATT PoultryUSA. Cooked turkey parts are also sold to local customers who are unfamiliar with cooking turkey, said Yu. Meanwhile, Chinese people also buy cooked turkey products – seven-kilo whole cooked turkeys, for example – for their friends as gifts during the spring festival.

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Reminiscent of N.Y.-dressed poultry, processed turkeys in China may be sold with head and feet still attached. Photo courtesy of Weifang Zhouxiufen Turkey Foods Co., Ltd.

 

The wholesales prices of turkey drumsticks and turkey wings respectively reached 30 yuan per kilogram and 10 yuan per kilogram in December 2008, according to Yu, or roughly $2 per pound for drumsticks and 67 cents per pound for wings.

Imported turkey – mainly consisting of frozen turkey parts – are also used by processing companies, according to Chinese turkey importers. "My company imported two containers of 500 to 700 gram turkey legs every month, each container weights in about 20 tons," Chen Tiehu, a sales manager at Rugao-based Sanyang Foods Ltd., told WATT PoultryUSA. "Because of different diet preferences, turkey legs from foreign sources are much cheaper than that from local producers. The price of imported turkey is only 9,000 to 10,000 yuan per ton now, or between 60 cents and 67 cents per pound." Chen's company usually sells about 50 tons of ready-to-eat turkey products to domestic customers every month.

In addition, as domestic and foreign producers work in closer cooperation, more turkey products are expected to be made in China, said experts. "Turkey meat can replace pork to make hot dogs," USAPEEC’s Hu said. "Foreign turkey producers are eager to work with local operations to develop this new product."

Last November, five leading meat producers – including Jiangsu-based Yurun Group, Henan-based Swineway Group, Shandong-based Jinluo Group, Shandong-based XiwangFood Co., Ltd. and Shandong-based Qingdao BoNiYa Food Co., Ltd. – joined in a Sino-American turkey industry forum in Zhengzhou. "Although higher production costs blocks the development of processed turkey products in China," said Hu. "Domestic large operations showed strong interests in these new products. We will continue working on further cooperation in the future."

Local weakness

China’s turkey annual production increased from 4,000 tons in 2004 to 5,000 tons in 2008, an increase of 25%, according to government data. This was much lower than the growth of consumption, which rose from 4,000 to 55,000 tons during the same time period.

"I can only provide turkey to my clients during second half of the year," He Ning, a general-manager at Zhejiang-based Jinyuan Turkey Farm, told WATT PoultryUSA. "I do not have enough money to buy more breeders." He's farm sells 25,000 birds annually, while most Chinese turkey producers average less than 10,000 birds, according to He.

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