The future of egg processing over the next 10 years
In an increasingly interconnected world, processors are ever-more subject to same pressures, irrespective of location.
Joost van Loon, from Dutch egg and egg products concern Weko, Morten Ernst, sales director with Sanovo, Dave Rettig, president of Rembrandt Foods and Cesar de Anda, treasurer of the International Poultry Council, addressed delegates during the recent IEC conference, sharing their opinions and predictions about some of the changes the egg processing industry will undergo over the next 10 years.
Van Loon gave the European perspective, Ernst shared his expertise about the Asian market, while Rettig provided the North American outlook and de Anda described the future situation in Latin America.
All four of these industry experts highlighted traceability, and expressed their strong belief that, over the next decade, traceability will become an even more important issue to the egg industry as a whole. This will have major implications for egg products, and van Loon explained that in Europe, new developments are already underway to enable the traceability of both liquid egg and powdered egg products.
The four major issues that will affect egg processing during the next decade are sustainability, animal welfare, traceability and rulings about world trade. This was the message from van Loon.
Sustainability is already becoming increasingly important in the European egg market, and van Loon predicts that it will become even more so during the next decade. He believes that this trend is predominantly driven by multi-national organisations and the major food retailers, but that producers and processors must respond to these market demands.
Animal welfare issues have had a major impact on European egg production over recent years, and this will continue. 2012 will bring a ban on conventional cages within the European Union, and van Loon believes that enriched cages will play an important role in satisfying demand during the next decade.
Nobody can be certain of how world trade will be managed during the coming years, whether export refunds will end, and what taxes may, or may not, exist. However, as European processors plan for intercontinental trade, they must prepare for a future in which they will be selling their products outside of Europe. Therefore, they need to be competitive on price, while still complying with the conventional cage legislation, using the alternative production systems required by EU law.
Van Loon strongly believes that European eggs are of a high quality, and that this quality will improve even further and provide an even greater competitive advantage.
Traceability is already a major issue within Europe. All European eggs are now coded to show their country of origin, the method by which they were farmed, and which specific egg farm they originated from. This information allows eggs to be easily traced back to producers and farms. Developments are already underway within Europe to enable liquid egg and powdered egg to be traceable in the same way; enabling greater consumer choice within Europe.
60% of the world’s eggs come from Asia. By 2015, it is predicted that worldwide egg consumption will increase to 70 million tonnes, 70% of which will come from Asia.
Asia’s population is growing very fast, and its demographic is also changing. By 2030, there will be an additional 450 million people in the continent; this will be made up of a large elderly population and a growing number of affluent people. This shift in demographics will result in a higher demand for eggs and egg products.
A new Asian trade agreement came into force in January 2010, allowing tariff free trading between China and the 10 member states of South East Asia and Asia. Ernst believes that this will lead to the creation of a trade block, where goods are traded tariff free.
During the next 10 years we will see a fusion of foods in Asia. Ernst explained that there will be a growing trend towards foods with added health benefits, and foods with a Western influence. Japan is already being innovative with food and packaging and, from past experience, Ernst expects China to follow this lead.
Consumer awareness in Asia is growing rapidly, and already there is an increasing demand for traceability. Food safety is becoming an important issue within this continent, and consumers of the future will demand safer egg products from producers.
Rettig believes that the global market is becoming increasingly integrated - and inter-dependent. He told the IEC that the future for the food ingredient sector in North America involves creating more functionality from egg products, including binding and whipping properties and nutritional benefits.
Rettig reiterated the messages from van Loon; traceability, sustainability and animal welfare are all major issues for egg processors in North America, and he expects them to become even more prominent during the coming 10 years.
The US is expected to experience growth in its food service industry during the next decade, particularly in convenience food markets. Food safety will also become an even greater issue during the coming years.
Like van Loon, Rettig explained that in North America, the industry is still unsure exactly how government and the World Trade Organisation will influence trade, but he urged members to be ready to react to the government and consumer trends, saying that: “The correct reaction creates winners; the incorrect reaction creates losers”.
De Anda believes that the market within Latin America will change quite dramatically over the coming 10 years. Currently, 4-7% of the eggs produced in Latin America go to industry; by 2020 this may become two out of every 12 eggs.
As many Latin American companies provide food ingredients, basic food service and exports are growing. This will lead to the creation of many new companies, offering more products and at even more competitive prices, creating a very tough market environment in Latin America. However, experience of similar scenarios in other industries suggests that after three to four years of these tough market conditions, Latin America will see the consolidation of its egg processing businesses.
De Anda explained that the Latin American egg industry follows the same trends as in Europe, but approximately 5-10 years later. Therefore, over the coming 10 years, traceability, sustainability and animal welfare are the issues that Latin American countries will be facing.
In the near future, de Anda believes that Latin America also needs new policies, legislation and regulations within the industry. He stressed how important it is for people within the egg industry to help politicians and local governments to create these policies, ensuring that the industry benefits, producing better products and at a higher quality.
De Anda told IEC members that for businesses to be more profitable in the future, they must add greater value to their products. He urged people to see eggs not just as a commodity, but as a speciality product, with excellent health benefits, what he called: “a diamond in our hands”. De Anda believes that, in Latin America, the egg is only now being discovered, and during the coming years its real value and full health potential will become apparent.