News and analysis on the global poultry
and animal feed industries.
Morten Ernst, Sanovo International
on September 14, 2007

Food safety concerns in China boost demand for premium foods

The government and urban consumers now hold food safety as a concern, increasing the demand for premium foods produced with safe ingredients.

It might sound strange, but the outcome of Avian Influenza (AI) outbreaks in China has been a breath of fresh air for food processors. The government and urban consumers now hold food safety as a concern, increasing the demand for premium foods produced with safe ingredients.

"Other positive results from the AI outbreaks and the related negative publicity have been demands for more product information through labeling," Morten Ernst, Sanovo International, said at the International Egg Commission conference in London.

The Chinese government has recognized the importance and necessity for food safety by implementing regulations that ensures the consumer higher quality and safer end products. In addition, the food safety bureau is continuing its focus on developing egg handling and processing regulations.

With China hosting the Olympics as well as the World Fair in Shanghai in 2010, there is still a fear of the potential nightmare scenario of what a livestock disease outbreak that could affect humans might do, Ernst said. Beijing has set up an expert panel on food security, he noted.

Established Regulations

Although established regulations are many steps away, guidelines of processing egg products are already in place. With most of the international food processors in China using pasteurised egg products, the current government's challenge is to urge local food processors to also use pasteurised egg products for the safety of the consumer.

Ernst said that large food companies are being encouraged to work with farmers to grow products or breed poultry and produce eggs under a unified set of standards and quality control mechanisms. There are national and local standards, and many producers have their own. Multi-national food processors often have their own specifications and requirements for the ingredients they buy - including eggs and egg products.

The central government is implementing a "safety guaranteed foods" policy, under which only foods from designated processing facilities are allowed into the retail channel. "This will force food processors to improve their production methods and their selection of raw materials, and should increase the demand for high quality processed egg products," he said.

More than 60 percent of the country's urbanites were willing to pay more for produce certified safe or organic, Ernst added. Wal-Mart started selling organic products in all of its Chinese stores now totalling 71 in 2005. As a result, egg sales rose 50 percent in the 12 months through to November 2006.

China has about 14 egg product plants in operation, with another three starting up this year. The existing plants had a combined annual egg breaking capacity of 90,000 tonnes, which will grow to about 110,000t when the three additional plants start up.

A few of these 17 processors are integrated, with two of them operating their own feed-mill and million-bird layer farms. Both of these were planning large expansions of layer capacity as well as increased egg products capacities. Of the remainder, some have strict control of both feed and layers through contracts, while others bought their eggs in the open market, direct from farms or through egg traders.

Almost all process egg powder, mostly whole egg, with most of the powder going to the huge noodle and bakery industries.

Pasteurized Egg Products

Ernst said that throughout Asia, concerns over AI have resulted in most local food processors showing increased interest in pasteurised egg products and egg powder.

To make the food industry change from fresh eggs to using products was a massive challenge in countries where food regulations, and food safety were either not established or in their infancy, he said.

"The thinking which has made egg products popular in the developed world is not yet a factor in Southeast Asia. Labor is cheap, hygiene is often not a concern, and convenience does not matter," he said.

Ernst added, "The low level of utilization of existing egg products' processing facilities in China and Asia excluding Japanis proof that this industry has a long way to go."

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