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global conference
Day 1 - Forum
Day 2 - Marketing Brand
Building, session 1
Tariff handicap
Day 2 - Marketing Brand
Building, session 2
New products
'*kWÊbs
Whateverit takes
Poultry's backyard
What'sNewS Issue 3 May/June 200 7 I I
A new component had been added to this
7th Rabobank International global confer
ence. A forum discussion bringing to-
gether a multinational panel of experts in
the rneat industry was launched. Jim
McKay of the US Aviagen Group, Ned
Sullivan of Ireland's Glanbia, and RI's in
dustry specialist Gordon Butland dis-
cussed the population of tomorrow and
who will produce their meat. Butland set
the scene, saying: 'Collectively, meat is
second to milk and comes far ahead of
fish and seafood in protein consumption.
However, fish and seafood have a larger
share of the plate than any individual
meat.' Over the past decade, meat con
sumption has grown by almost 30%,
while population growth is half that fig-
ure. 'However,' he added, 'these broad sta-
tistics teil us little about the dynamics of
the past 10 years.' The consumption posi-
tion of different types of meat has shifted.
Poultry is the highest flyer, growing by
60%. I'ork ranks second at 29%, with
beef and sheepmeat growing only moder-
ately at 4 and 6% respectively.
The importance of marketing and brand
ing was emphasized, taking up a whole
morning at the conference. First up was
Francisco Garza, CEO of Mexico's Aigma
Alimentos. Focusing primarily on his do-
mestic market, although with more than a
glance north to the US opportunity, he de-
scribed the development of poultry and
processed meats as they have gained rela-
tive importance over the past 10 years.
Sigma has grown at twice the market rate
since the late 1970s.
The reason, Garza ar-
gued, is that the com-
pany has focused on
building a socio-eco-
nomic brand map sup-
ported by strong dis-
tribution and quality
guarantees. Covering
every socio-economic
group through strong
branded products is the key to Sigma's
46% market share. But looking ahead, the
company has diversified in to dairy and
prepared rneals, choosing to control its
further growth and maintain its market
position through innovative development
of new market segments. 'This means,'
Garza noted, 'that the competition is
obliged to follow our lead. The only chal-
lenge is that we have to stay ahead all the
time.'
Successful application of innovative mar
keting was Quickfood's Luis Bameule con-
tribution to the discussion. Another verti-
cally integrated
operation, Ar-
gentina's Quick-
food success-
fully branded
the 'Paty', or
hamburger to
the rest of us.
The main chal-
lenge to ex-
panding the
business is, ac-
cording to
Bameule, the ongoing protectionism im-
posed by most industrialized countries. As
long ago as the early 1970s, Quickfood
had launched ready-packed cuts to supply
its chain of butcher shops. Although an at-
tractive product for EU markets, periodic
oscillations in, say, GATT licenses have
limited exports. Tariffs and non-tariff bar-
riers remain an enormous handicap, he
said.
The second session of the day brought to-
gether speakers from three very different
regions. Wouter Dekker of Holland's Nu-
treco, US-based Gold Kist's John Bekkers,
and Sudheer Laxman Anaokar of India's
Godrej Agrovet all approached the issue
of marketing from
their unique but com-
plimentary perspec-
tives. Initially, Dekker
may have seemed a
fish out of water. But
the world's number
one aquaculture com
pany also has exten-
sive business in feed
and premix products
and is an important producer of pig and
poultry meat in the Benelux and Spain.
Conditions for fish and seafood have been
especially favourable as meat's image and
consumer confidence declined. Yet Dekker
stressed that innovation in product devel
opment continues to be key to ongoing
success and even survival in the anirnal
protein business. In the new millennium,
Nutreco is developing a cluster of new
products - GMO-free poultry and organic
salmon. It is supporting these develop-
ments with changes down the chain of its
vertically integrated business.
John Bekkers ex-
plored competing
in a mature indus
try. Following
three decades of
what he described
as 'spectacular
growth', the
chicken industry
has become ma
ture in the US. 'We now have a wide range
of options,' he said. 'However, the viable
options are neither to maintain the status
quo, nor to simply repeat what we did
when the industry was young.' US poultry
production still has some fundamental ad-
vantages over competitors, both in terms
of other proteins and producers and
processors in other countries. But end sale
remains an issue. 'Today, consumers pur-
chase around half of what they want from
food retailers. They get the other half
from companies that prepare it for them.
The dynamics of these markets are chang-
ing rapidly. In the US, five retail compa
nies now control about two thirds of vol
ume. As a poultry company executive, this
means I must create a close relationship
with one or more of the big five; I have to
provide management leadership that will
identify and attract the necessary re
sources; and I must mold my organization
into an efficiënt and totally reliable sup-
plier of every form of chicken product this
customer's customers want.'
From one of the world's most mature mar
kets, to an emerging economy. India ac
counts for one-sixth of the world's total
population, and it is still growing. The
growth of GDP is rapid and new purchas-
ing power and demographics are changing
the way Indians live. Said Anaokar, the fu
ture for India's food industry is bright. At
present, anirnal protein's share of total
protein consumption is only 20% against
55% in the US. India's fast-growing s»
