An important question was asked and answered by a panel of four chicken industry executives at the National Chicken Council 57th Annual Conference. Can the industry afford to let up on innovation and wait for an improved economy and more sustainable production costs? The answer from the panelists was an emphatic no. (Login to www.wattagnet.com to see poultry panel presentation here.)
Instead, the chicken industry must continue to innovate and address new consumer needs now, said the executives. They also said the timing is opportune for the chicken industry to gain domestic market share from beef and pork.
New consumer needs need to be addressed now
“We thought 2011 would be a challenging year economically for the U.S. chicken industry, and it exceeded our expectations,” said Mike Helgeson, chief executive officer, GNP Company. But, he said, “The hallmark of the industry’s success has been our ability to innovate and offer consumers more reasons for buying chicken. So the answer is no to the question about letting up in our innovation; we can’t afford to let up. The industry needs to meet consumers’ changing shopping habits. We also need to offer chicken in channels of distribution and forms that meet their needs.”
With consumers struggling to meet food budgets, Helgeson pointed to ground chicken as a lower-cost, more-healthy alternative to ground beef.
Suppliers join in innovation
William Andersen, senior vice president, Keystone Foods, challenged industry suppliers to join in the effort to bring innovative, more affordable chicken products to market during the downturn. “Challenge your teams that it is not business as usual. Come up with innovations that we can take to our customers that will generate excitement and demand in the marketplace."
He challenged suppliers to focus on product affordability: “With live-bird weights rising, our customers are asking for new ways to deliver affordable piece counts.”
The right sizes for parts?
Addressing the subject of broiler weights, Mark Kaminsky, chief operating officer and chief financial officer, Koch Foods, posed the following question: “Are we sure as an industry that we are producing what the consumer wants?” He questioned whether products being offered at retail give consumers the right value proposition.
“I think the industry would be well served in making sure smaller pieces go to retail in order to have happier consumers who buy more consistently,” he said.
Helgeson also posed questions about parts sizes at retail. “We need to ask how the consumer uses the end product. How does it meet their needs and how well does it function? Is an extremely large breast fillet what a consumer really wants in terms of a cooking and eating experience? I suspect that many products have probably exceeded the size that is desirable from a consumer standpoint,” he said.
Slow economy is market-share opportunity
The chicken industry is in a position to continue gaining market share, even if total meat consumption remains flat, according to Kaminsky.
“Chicken is the most competitive meat protein and has a wide appeal across a broad spectrum of markets. The competitive efficiency of the animal in converting high-priced grains to meat protein is a durable competitive advantage going forward. Globally, chicken is going to be an expanding part of people’s diets in the short term and far beyond 2012,” he said.
Clint Rivers, president of foodservice and supply chain, Perdue Farms, agreed about the opportune timing for chicken. “The value proposition of chicken should begin to show itself in 2012 if the prices of competing proteins stay high.”
The timing is opportune for the chicken industry to gain domestic market share from beef and pork with product innovation, the panelists said.