Turkey moves mainstream in China

Once unknown, turkey is growing in popularity amongst Chinese consumers.

Eight years ago Zhou Xiufen started with three turkeys, last year her company, Weifang Zhouxiufen Turkey Farm, raised 300,000 turkeys.
Eight years ago Zhou Xiufen started with three turkeys, last year her company, Weifang Zhouxiufen Turkey Farm, raised 300,000 turkeys.

Eight years ago, Zhou Xiufen, a forty-four year old housewife in Shandong province, saw turkeys – rare birds in China – for the first time. After Zhou injured her legs in a car accident, she had to rest at home alone, and in order to help her pass the time, her husband bought her three turkeys. These turkeys produced 81 poults in 2002 and 2003.

“Once a stranger walking past saw my turkeys, and he spent Yuan 100,000 (US$14,465)  to buy 30 of them,” Zhou says, and despite not knowing 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, by last year, had grown to 300,000 birds. It sells day-old turkeys, frozen turkey meat and processed turkey products across China.

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

Local producers, however, cannot meet rising demand due to the small scale of their operations. As a result, imported turkey by weight increased from 4,000 tons in 2004 to 50,000 tons in 2008, according to the USDA, accounting for 91% of China’s total 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), says. “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.”

Turkey consumption and turkey imports will reach 65,000 tons and 60,000 tons, respectively, by October 2009, forecasts the USDA.

New consumers

In China, turkey has been mainly eaten by foreign residents or tourists, but this is changing.

“Chinese people have replaced expatriates as the major consumers of turkey products,” Hu says. “This change is reflected in the import volume of various types of turkey products. Turkey parts now account for the largest amount of total turkey imports.”

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

Over the past three years, imports of turkey parts have risen, in line with increasing overall Chinese turkey consumption. Imported frozen turkey parts grew from 16,756 tons in 2006 to 45,157 tons in 2008, an increase of 169.5%, according to China Customs, while imported frozen whole turkeys and imported prepared turkey increased by 20.5% and 53.5%, respectively.

It has become ever-easier for the average person to buy turkey products in China, particularly in big cities.

“Sometimes, I make a turkey sandwich for my Chinese wife for breakfast,” Yotam Ariel, a twenty-six year old expatriate in Shanghai, explains. “She likes Hormel’s smoked turkey.” Both cooked turkey meat and fresh turkey meat are sold in China.

Turkey, Chinese-style

Turkey meat – turkey breast meat in particular – has long been consumed by foreigners in China, and is 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, explains.

Cooked turkey parts are also sold to local customers who are unfamiliar with cooking turkey, says Yu. Chinese people also buy cooked turkey products – seven-kilo whole cooked turkeys, for example – for their friends as gifts during the spring festival.

The wholesale price of turkey drumsticks and turkey wings reached Yuan 30 per kilogram and Yuan 10 per kilogram, respectively, in December 2008, according to Yu, or roughly US$2.00 per pound for drumsticks and US$0.67 per pound for wings.

Imported turkey – mainly frozen turkey parts – is also used by processing companies, according to Chinese turkey importers.

“My company imports two containers of 500-700 gram turkey legs every month, each container weight in about 20 tons,” Chen Tiehu, a sales manager at Rugao-based Sanyang Foods Ltd., says. “Because of different diet preferences, turkey legs from foreign sources are much cheaper than those from local producers. The price of imported turkey is only Yuan 9,000-10,000 per ton now, or US$0.60-0.67 per pound.” Chen’s company usually sells about 50 tons of ready-to-eat turkey products to domestic customers every month.

As domestic and foreign producers work more closely together, more turkey products are expected to be made in China, say analysts. “Turkey meat can replace pork to make hot dogs,” Hu says. “Foreign turkey producers are eager to work with local operations to develop this new product.”

Last November, five leading meat producers – 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.

Hu says: “Although higher production costs blocks the development of processed turkey products in China. Domestic large operations showed strong interests in these new products. We will continue working on further cooperation in the future.”

Local weakness

China’s annual turkey 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.

He Ning, a general-manager at Zhejiang-based Jinyuan Turkey Farm comments: “I can only provide turkey to my clients during second half of the year. I do not have enough money to buy more breeders.”

Ning’s farm sells 25,000 birds annually, while most Chinese turkey producers average less than 10,000 birds.

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