U.S. poultry producers need to increase market relevancy in China in order to seize a bigger share of the chicken, turkey and egg business unfolding there now.
That’s according to business consultants who studied the U.S. poultry industry’s marketing activities in China and Hong Kong. They made recommendations to USA Poultry & Egg Export Council, including the following:
- Develop flavored chicken paws for a China market that is looking for new value-added products
- Market Halal poultry drums to China’s large Muslim population
- Cultivate stronger political and one-on-one business relationships in China
There’s urgency to the recommendations, because there is a global grab for shelf space and China is the leading growth market up for grabs.
“You are sitting on top of the No. 1 business in the world with fantastic and phenomenal growth,” Matt Tripodi, Euromonitor International, told listeners at the USA Poultry & Egg Export Council.
“There is a tipping point in developing economies, about $5,000 disposable income, at which the consumption engine really cranks up. China is right about there. So we haven’t seen the top of this market opportunity yet,” he said.
What's the size of the market now? In 2012, the market was roughly $61.6 billion in poultry and poultry products in China and about $2 billion in Hong Kong.
The key growth sectors in China for U.S. poultry producers are broilers, live poultry, chicken paws and feet and fresh chicken eggs. Sales in all these categories are performing very well this year.
U.S. poultry and poultry products are on track to set a new record in 2013, somewhere in the neighborhood of $6.5 billion in poultry and poultry products. China is expected to be U.S. poultry producers’ third largest market behind Mexico at No. 1 and Canada at No. 2.
While China is the most notable growth market, opportunities abound across the Asia-Pacific region.
Tripodi explained, “In 2011, Asia Pacific had just beaten out North America and Western Europe in levels of disposable income. Through 2020 Asia Pacific is expected to grow nearly 55 percent. Every man, woman and child, if you average it all out would have about $1,339 per person of additional spending power.
“This level of growth is phenomenal in a market like China. The population of 4.3 billion in the region – and I am going to round it down to 4 billion. And I am going to round down the $1,339 increase in disposable income to $1,000. And $1,000 times 4 billion people is $4 trillion. USDA has gone on record saying that 20 percent to 30 percent of that is going to be spent on food. That amounts to $800 billion to $1.2 trillion. That does not even factor in the population growth that is going to occur. So, that estimate is wildly conservative.”