Years of breakneck growth have given way to a four-year funk for China's chicken industry. Industry leaders are looking to jump-start growth by reassuring consumers of product safety and quality, vertically integrating, and developing independent breeding capacity. During the first half of 2016, the major publicly-listed chicken
companies all reported big increases in profits, suggesting the industry
may be ready to turn the corner.
Like many food industries in China, the chicken industry has been under a cloud of food safety rumors. Last month, a broiler chicken alliance of 36 companies gathered at a publicity meeting to take a pledge to uphold food safety to show the industry's cohesion and restore consumer confidence, according to the alliance's president. Since 2012, the industry has been hit by a series of incidents that sowed fears of chicken. These included the so-called "instant chicken" rumors, human illnesses resulting from H7N9 infections that were believed to be associated with live poultry markets, and the Fuxin company incident.
The latest campaign emphasizes food safety, animal welfare, environmental protection, and worker rights. Many of the companies are investing in huge industrialized management projects that integrate breeding, incubators, feed mills, farming, slaughter and processing. Bringing all these activities under a single company's control is expected to make products traceable and give consumers confidence in the safety of products. Chicken alliance members pledged to reduce use of antibiotics, eliminate illegal substances and additives, produce to national standards, prevent selling of dead chickens, use environmentally friendly practices, and look out for workers rights.
The president of the alliance fretted that China's poultry industry is still not very strong even though it has become the world's second-largest and has been a leader in introducing industrialized farming and processing to the country. The poultry industry is emerging from a three-year downturn going back to 2013 when companies lost over 100 billion yuan during the H7N9 virus scare, according to the chicken alliance president.
The chicken alliance president emphasized the need to change consumers' mistaken thinking about the poultry industry and to promote consumption. Poultry now accounts for about 20% of China's meat consumption, but that share is still low compared with Europe and the United States. The alliance aims to increase per capita consumption from 7 kg now to 12 kg in five years, and reach the developed-country average in 10-15 years.
Another article last month attributed tepid consumer demand to a slow-down in growth of "foreign fast food" which is the main channel for chicken sales in China. The article also cited the return of rural migrants to their home towns. This leaves cafeterias in schools, factories, and offices as the main drivers of growth. A Ministry of Agriculture projection expects 1.9% annual growth in chicken consumption over the next ten years, a little more than half the growth rate during the last decade.
China's ban on poultry imports from the United States and France has restricted the renewal of grandparent breeding flocks since last year. Commentators view this as having a possible silver lining by cutting back on excess capacity in parent-stock propagation farms and spurring domestic breeding. The global poultry breeding industry is dominated by a handful of companies with a century of experience that makes it hard for China to catch up. Several Chinese companies have made progress in developing their own breeds, and China's poultry genetic improvement plan aims to develop 2-3 globally competitive broiler breeds by 2025.
Like many food industries in China, the chicken industry has been under a cloud of food safety rumors. Last month, a broiler chicken alliance of 36 companies gathered at a publicity meeting to take a pledge to uphold food safety to show the industry's cohesion and restore consumer confidence, according to the alliance's president. Since 2012, the industry has been hit by a series of incidents that sowed fears of chicken. These included the so-called "instant chicken" rumors, human illnesses resulting from H7N9 infections that were believed to be associated with live poultry markets, and the Fuxin company incident.
Broiler chicken industry alliance members recite safety pledge.
The latest campaign emphasizes food safety, animal welfare, environmental protection, and worker rights. Many of the companies are investing in huge industrialized management projects that integrate breeding, incubators, feed mills, farming, slaughter and processing. Bringing all these activities under a single company's control is expected to make products traceable and give consumers confidence in the safety of products. Chicken alliance members pledged to reduce use of antibiotics, eliminate illegal substances and additives, produce to national standards, prevent selling of dead chickens, use environmentally friendly practices, and look out for workers rights.
The president of the alliance fretted that China's poultry industry is still not very strong even though it has become the world's second-largest and has been a leader in introducing industrialized farming and processing to the country. The poultry industry is emerging from a three-year downturn going back to 2013 when companies lost over 100 billion yuan during the H7N9 virus scare, according to the chicken alliance president.
The chicken alliance president emphasized the need to change consumers' mistaken thinking about the poultry industry and to promote consumption. Poultry now accounts for about 20% of China's meat consumption, but that share is still low compared with Europe and the United States. The alliance aims to increase per capita consumption from 7 kg now to 12 kg in five years, and reach the developed-country average in 10-15 years.
Another article last month attributed tepid consumer demand to a slow-down in growth of "foreign fast food" which is the main channel for chicken sales in China. The article also cited the return of rural migrants to their home towns. This leaves cafeterias in schools, factories, and offices as the main drivers of growth. A Ministry of Agriculture projection expects 1.9% annual growth in chicken consumption over the next ten years, a little more than half the growth rate during the last decade.
China's ban on poultry imports from the United States and France has restricted the renewal of grandparent breeding flocks since last year. Commentators view this as having a possible silver lining by cutting back on excess capacity in parent-stock propagation farms and spurring domestic breeding. The global poultry breeding industry is dominated by a handful of companies with a century of experience that makes it hard for China to catch up. Several Chinese companies have made progress in developing their own breeds, and China's poultry genetic improvement plan aims to develop 2-3 globally competitive broiler breeds by 2025.
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