Page 1

Meat global

data

March~April 2018 Volume 5, issue 2 ISSN 2054-4685

and

analysis

for

processors

p a c k i n g

and

exporters

J o u r n a l

Lab grown protein The future is in a petri dish

30 | big investor rewards and bigger risks – nigeria

50 | Paleo diet for dogs and cats gets real

64 | why stores will sell this chicken at a loss


le ad e r

This here’s the Duck

I

t was 1975. I was stationed at Ft. Bragg, North Carolina, with the 18th Airborne Corp and my first wife and I lived off-base in a trashy, unincorporated, dirt road area called Bonnie Doon. And yes, everyone who lived there called it Bonnie Doom. Our neighbor’s brother liked to hang out with us. Andy was around 16, from the local area, and suffered from a chronic illness

which left him skinny, a bit weak, and always short of breath. One night when he was over he told us he had

decided on his life’s calling. “I hav’ been giving this a lot of thought. I know it will be a lonely life…a hard life…a life

50,000 short at the end of last year – with few Millennials

away from friends, folks, and kin, but I hav’ decided to

seeing it as a good job. Full truckload fleets experience

become…a knight of the road.”

90% turnover in drivers, and with the average age of a

My wife and I looked at each other and then back at Andy. “A what?” I asked.

trucker being 55, it will only get worse as they leave the industry. Sure, you can grow and process all the cattle,

“A knight of the road, you know, a truck driver.”

chicken, and pigs you want, but how are you going to get

That year the song ‘Convoy’ had come out – the movie

your product to the market without a truck?

would follow three-years later. The song was about

I would venture to say that throughout the world – after

three truckers with the Citizens Band radio ‘handles’ of

eliminating home-grown meat for home usage – that

Rubber Duck, Pig Pen, and Sodbuster. When leaving

close to 100% of all livestock, carcasses, or finish product

California there were just the three, as they approach

has at least one journey or more in a truck.

Omaha during their one-night drive across the entire USA,

Recently, Tyson projected a nationwide shortage

their convoy has increased to around 80 trucks and by

of trucks and drivers will add $200 million to the meat

the time they hit the East Coast, they had over a 1,000

company’s costs this year. “Freight is a tough one, it’s

trucks in the mighty convey, blasting through toll stations,

affecting all of our businesses,” said CEO Chief Tom Hayes.

yacking away on their CB radios and ignoring Highway

“Ultimately, the consumer’s going to pay for it at some point.”

Patrol (Smokies) orders to lower their speed to 55 mpg.

Lynch Logistics Inc., a Bangor, Me., trucking and

When these truckers were having a piss stop, eating,

logistics firm that hauls cargo for retailers, told The Wall

or sleeping, or how they were able to drive an eighteen

Street Journal that they were “turning down freight on a

wheeler across the USA in a single night…well…the song

daily basis”.

was a bit weak on the facts. Convoy hit number one in the States, Australia, the UK, and actually did quite well in Germany. Truckers were revered, honored, and truly seen as knights of the road.

There has been a surge in new truck orders, but with fleets having trouble recruiting enough drivers to fill seats in their existing big rigs how is this going to help? The only thing that will solve this problem is going to

Yes, they were a pain to be stuck behind on a narrow

driverless trucks as was outlined in January’s issue of MPJ.

mountain road, their lane changing left a lot to be desired,

In Europe and in the States there have been trials, and

and jacked up on pep-pills to stay awake made them

one company is using it for real. Electrolux in the States

crazy as a one-eyed skunk, but at least when you’d move

is using driverless trucks to deliver appliances from its

your arm up and down, they’d let out a blast on their

plant in Texas to a distribution center in California. Human

truck’s air horn.

drivers take the trucks to the freeway, a convoy is formed

Everyone started getting CB radios to listen in. Even

with a human driver/observer in the lead truck, and off

Puerto Rican girls in the Bronx would lie awake in their

they go to California. Before the hit city traffic, human

bedrooms and chat to truck drivers cruising by on

drivers board and take over.

Interstate 95. However, by the time my dad got around to

No surprise here, the Teamster’s Union is crying to the

installing a CB radio in his Pinto station wagon – he was

heavens over this, but this is the future. If I was an investor,

never known to the be at the forefront of any innovation –

I know which technology I’d be putting my money into.

I knew the love affair was over.

Let those auto-trucks roll, 10-4 good buddy.

Today in the USA there is a truck driver shortage –

meatpacking.info

Velo Mitrovich, Editor

November~December 2017

3


co ntac t s

contacts Velo Mitrovich Editor velo@rebymedia.com +44 (0)1442 780 591 Jim Robertson Head of sales jim@rebymedia.com +44 (0)1442 780 593 Josh Henderson Sales executive josh@rebymedia.com +44 (0)1442 780 594 Jon Young Publisher jon@rebymedia.com Reby Media 42 Crouchfield, Hemel Hempstead, Herts, HP1 1PA, UK

SUBscriptions Meat Packing Journal is a bimonthly magazine mailed every January, March, May, July, September and November. Subscriptions can be purchased for six or 12 issues. Prices for single issue subscriptions or back issues can be obtained by emailing: subscribe@meatpacking.info

International One year: $749 The content of Meat Packing Journal is subject to copyright. However, if you would like to obtain copies of an article for marketing purposes high-quality reprints can be supplied to your specification. Please contact the advertising team for full details of this service. Meat Packing Journal is printed at Stephens & George, Merthyr Tydfil, UK.

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system, without the express prior written consent of the publisher. Meat Packing Journal ISSN 2054-4677 is published bimonthly by Reby Media, 42 Crouchfield, Hemel Hempstead, Hertfordshire, HP1 1PA. Subscription records are maintained at Reby Media, 42 Crouchfield, Hemel Hempstead, Hertfordshire, HP1 1PA. Meat Packing Journal and its Editorial Board accept no responsibility for the accuracy of statements or opinion given within the Journal that is not the expressly designated opinion of the Journal or its Editorial Board. Those opinions expressed in areas other than editorial comment may not be taken as being the opinion of the Journal or its staff, and the aforementioned accept no responsibility or liability for actions that arise therefrom.

4

November~December 2017

Meat Packing Journal


co nte nt s

contents 14

30 42

50

64

COVER: the future is knocking 23 - Call it 'clean meat', 'lab meat' or something not printable, what is being produced in an handful of labs around the world has the potential to transform the meat industry like nothing else

Distributors go after big bird 7 - US food distributors say major chicken companies have been price fixing for years

listeria death still climbing in sa 8 - Inaction from key players is driving death toll in South Africa even higher

nafta battle heats up 10 - The gloves have come off as Canada and Mexico say they don't need NAFTA

'work your butt off' 12 - Marketing columnist Elliot Begoun talks about the real key to success

china's forcast for 2108 14 - High demand with stagnant production – it should be a seller's dream but will it?

not for the faint hearted 30 -While Nigeria is being touted as THE future market, you'll need nerves of steel to survive

meatpacking.info

africa's safter bet 40 - A more stable, less corupt government means Ghana is better for investments

world leader in lamb, deer... 42 - New Zealand punches above its weight with meat. What's its formula for success?

raw diet driving petfood profits 50 - Called the 'Paleo Diet' for pets, raw food is booming for pets. There are risks, however

it's always deer season 56 - The world demand for deer is growing, just don't mention the 'B' word

ben rigby game 58 - A profile on the UK's largest game meat distributor supplying deer and wild fowl

Rotisserie chicken demand 64- Often sold at a loss, why supermarkets and consumers love this cooked bird

November~December 2017

5


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n e ws

US distributors call foul on chicken price

T

op US food distributors are claiming that top US chicken producers have been fixing prices for years,

affecting their profits. Sysco Corp and US Foods Holding Corp have joined with supermarket chain Winn-Dixie Stores to launch a lawsuit against Tyson Foods, Pilgrim’s Pride, Sanderson Farms, and Perdue Farms in separate complaints. How serious is Tyson treating this? When this broke the news during the IPPE trade show, the immediate disappearance of Tyson’s attendees was noticeable. US Foods and Sysco represent roughly 25% of the domestic food-distribution business, selling meat and other food products to restaurants, hotels, hospitals, and other businesses across the US. The two distributors claim that they overpaid for poultry meat for at least eight-years. According to The New York Times, the US chicken sector has come under increased scrutiny in recent years as customers and farmers have alleged antitrust violations relating to pricing, production, and compensation. "This is a case about how a group of America’s chicken producers reached illegal agreements and restrained

processors insights into rivals' supplies. The lawsuit alleges that the chicken companies

trade," the lawsuits from Sysco and US Foods said.

curbed chicken supplies by coordinating their flocks of

Although stock prices fell immediately after the

breeding birds, with each company keeping tabs on its

announcement for the big four poultry producers, the lawsuit is far from being a slam-dunk. And, indeed, this isn’t the first time they’ve faced these charges. Buyers previously claimed in a 2016 lawsuit that Tyson

rivals’ activity via Agri Stats. In addition, the poultry producers were able to manipulate the Georgia Dock index, a pricing benchmark – suspended since 2016 – that was maintained by the

and its competitors had colluded since 2008 to reduce

Georgia Department of Agriculture, basing it on price

output and manipulate prices. Some companies closed

information supplied by chicken companies.

processing plants or laid off plant workers, the suits claim.

Both food distributors said they relied on that

Others broke eggs before they hatched, slaughter or

benchmark to price chicken, which gave prices over 30%

exported egg-laying hens, and young chickens before

higher than one maintained by the USDA.

they grew to the typical size for market. Between 2008 and 2009, the number of broiler

Scott, however, has written that the food distributors’ complaints overlook the fact that poultry companies

chickens produced in the United States fell by almost half

were struggling in 2008 due to rising grain prices, and it

a billion, according to the USDA. While those numbers

was then logical for the poultry industry to cut back on

have since risen, they haven't hit their 2008 high again.

production to reduce risk.

However, some believe truth belongs with the producers. "We expect the industry to fight the allegations and come out successful," said Mizuho analyst Jeremy Scott. In the lawsuits it alleges that the poultry suppliers

According to data obtained by The Washington Post, the retail and wholesale price of chicken rose slightly over the period described in the lawsuits. In 2007, the year before the alleged conspiracy began, chicken cost $1.36 per pound at retail in 2017 dollars, according to data

conspired to limit stocks and manipulate wholesale prices

compiled by the National Chicken Council and adjusted

by coordinating their flocks of breeding hens, with each

for inflation by The Washington Post. That spiked to a high

company keeping tabs on its rivals using an industry

of $1.61 in 2014 before falling again.

information service. According to The Wall Street Journal, data provider

It’s unclear, however, whether that price increase is the result of actions taken by the chicken companies. A

Agri Stats participated in the conspiracy by distributing

number of factors, including consumer demand and the

information about chicken production that gave

price of feed, play into chicken cost, said the Post.

meatpacking.info

November~December 2017

7


n e ws

Three Seas Initiative gathers strength

A

deal between a dozen countries in Central and

say will better integrate the region with the rest of Europe.

Eastern Europe looks to move ahead this year –

This can only help each of the nations improve their

despite being ignored by the European Commission and

poultry/red meat export potential. Already Poland has

unknown by others. Indeed, few outside the region had

become the leading poultry producer in Europe.

even heard of the initiative until US President Donald

Critics question the need for such an initiative,

Trump addressed the group’s second meeting this last

especially one challenging the EU which is financing

July in Warsaw.

the lion’s share of the infrastructure projects. Others see

Called the Three Seas Initiative (TSI), it links countries of the Mediterranean, Black, and Baltic Seas together. The 12-country alliance – Austria, Bulgaria, Croatia, Czech

Poland as trying to assert itself more on the world scene by becoming a regional power. While economics is the main driving force of this deal,

Republic, Estonia, Hungary, Latvia, Lithuania, Poland,

security is also part of it. Each of these countries suffered

Romania, Slovakia, and Slovenia – believe that poor

greatly during World War II, having the misfortune to be

infrastructure has held back their economic growth.

between the USSR and Nazi Germany. As part of the

While between them they hold 22% of the EU’s

post-war Soviet Bloc (except for Austria), infrastructure

population, according to PricewaterhouseCoopers, they

was never improved, especially that going north to south.

make up only 10% of its gross domestic product.

While these central states do not have to worry about

The TSI aims to foster closer regional cooperation

the armies of Russia and Germany, they do have a real

in building a network of highways, railways and gas

concern about being placed economically between the

terminals — a new connectivity architecture supporters

two giants.

China’s pockets open for ports

China’s dependence on foreign elements and increase China’s influence around the world,” Frans-Paul van der

C

hinese shipping giants, Cosco Shipping Ports and

Putten, a China expert at the Netherlands Institute of

China Merchants Port Holdings, have gone on a

International Relations, told FP.

buying spree, buying cargo terminals in the Indian Ocean, the Mediterranean Sea, and the Atlantic rim. Recently Cosco finalized the takeover of the terminal in Zeebrugge, Belgium’s second-biggest port, marking the Chinese firm’s first bridgehead in northwestern Europe. This is good news for meat/poultry producers in both

Listeria outbreak solved in SA

S

outh Africa's National Department of Health believes that after a year of searching, it has finally found the

source of the world's largest and deadliest outbreak

western and eastern Europe who are looking for faster

of listeria. According to the government, the 180

and more efficient ways of shipping to China.

deaths and close to 1,000 confirmed cases have been

China says it will sink $1 trillion into its Belt and Road

caused by the consumption of 'polony' a bologna-style

Initiative, which will physically link China to Europe by sea,

processed meat which is made from chicken, pork, and

road, rail, and pipeline. While many Western papers have

beef by-products.

been quick to point out that China had little to physically

Although all fingers point to Tiger Brand's Enterprise

show for this initiative, China has been quietly proving

Food products, CEO Lawrence McDougall said "no direct

them wrong.

link" has been proved between its products and any of the

According to Foreign Policy magazine, that deal followed a raft of other acquisitions in Spain, Italy, and

deaths. Still, Enterprise was being "extra cautious." The SA Department of Health, which has been heavily

Greece in just the last couple of years. Chinese state

critised for taking so long to find the source, said the fault

firms, which once kept close to their home market, now

lies with the uncooperative meat processing companies

control about one-tenth of all European port capacity.

which dragged their feet for months on providing product

After suffering humiliation by Western governments and their gunboat diplomacy in the 19th century when

samples and conducting recalls.. "We had long suspected that listeria could be found

China was forced to open its ports to the West, it must be

in these products," said Popo Maja, of the Department,

giving China a sense of fair play in buying Western ports.

explaining why it took so long.. "It is not because we are

“The fundamental goal seems to be to decrease

8

November~December 2017

incompetent or that we have inadequate resources."

Meat Packing Journal


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n e ws

Adios, goodbye, and au revoir USA December 2017, but it now looks like it will be in signed in April or May of this year. “We can’t just assume that, because we’re the United States, that the world is going to agree to what we put out there,” Eric Farnsworth, vice president of the U.S.-based Council of the Americas and a negotiator on the original NAFTA, told Foreign Policy. “It’s become a more diversified marketplace globally, and the administration is coming to terms with what that means.” Since talks to revise NAFTA began last year, the United States has insisted on conditions that both Canada and Mexico considered unacceptable.

A

Former Mexican trade negotiators think the bares the North American Free Trade Agreement

knuckle US approach shows a misunderstanding of how

(NAFTA) talks stall, Canada and Mexico are moving

the economy has evolved since the 1990s, especially

on to alternative trading partners and saying farewell to

when it comes to the importance of the United States to

the USA.

its neighbors.

Both Canada and Mexico have signed on to the new Trans-Pacific Partnership (TPP) with nine other Pacific Rim nations, in a massive trade deal. Created to help counter

With America producing more meat than ever before, the lack of trade deals is coming at a bad time. Farmers and meatpackers produced a record 99.7

the trading weight of China, President Donald Trump said

billion pounds of red meat and poultry in 2017, the US

that the deal was a bad one for the USA and he pulled the

Department of Agriculture estimates. They are on track for

States out of within weeks of taking office.

an even bigger slaughter this year.

While most thought the TPP would collapse without

Many of the big players, such as Tyson Foods and

the USA participating, it has recently taken on a new life.

Sanderson Farms, are building new plants that could

Canadian Meat Council President Chris White calls

push production up by nearly four percent. However,

the signing “a generational economic opportunity.” The

some companies, such as Prestage Farms, planned

Canadian meat sector has been a strong supporter of

their expansion specifically to handle the increase in

trade deals such as TPP, with the Council saying that this

production the TPP would bring.

deal has the potential to increase beef and pork sales

As noted by MPJ, cheap grain is driving the livestock

by at least $500 million and creating the potential to

and poultry boom. Five consecutive years of bumper

support an additional 5,800 jobs in Canada. “I can say with

US crops have pushed down corn and soybean prices,

confidence that our industry is ready to get to work,” said

making animal feed cheaper. A problem is, however,

White. “This gives Canada preferential access to other

that countries such as Russia, Argentina, and Brazil have

suppliers allowing our members to remain competitive in

also had bumper grain harvests, encouraging their meat

the Pacific market for sales of beef and pork.”

industry to expand.

But the TPP deal isn’t the only deal in the cards for Canada and Mexico. In October Canada signed the CETA, the Comprehensive Economic and Trade Agreement. CETA is a progressive free trade agreement, which covers virtually

According to North American Meat Institute, about 15% of US meat is exported. If trade disputes, too much supply, or low-price competition arises this year, it will be a consumers dream year and a producer’s nightmare. The Trump administration “thinks they have more

all sectors and aspects of Canada-EU trade in order to

leverage than they do, and they are overplaying their

eliminate or reduce barriers. For example, prior to CETA’s

hand,” said Antonio Ortiz-Mena, a former Mexican trade

entry into force, only 25% of EU tariff lines on Canadian

negotiator now at the Albright Stonebridge Group.

goods were duty-free. With CETA, 98% of EU tariff lines

“Mexico does have other options — they may not be ideal,

are now duty-free for Canadian goods. Once CETA is fully

but they’re options that weren’t available 25 years ago.”

implemented, the EU will have eliminated tariffs on 99% of its tariff lines. Mexico, too, is working on a similar deal with the EU. Both parties were hoping to sign the trade treaty by

10

November~December 2017

With the other deals in the works, neither Canada or Mexico have to sign up to unfavorable terms. The only question is: Will the USA realize this before shooting itself in both feet?

Meat Packing Journal


n e ws

Industry’s first camera grading technology

S

sustainability for Superior Farms.

begin grading carcasses with the VSS2000 System

an unprecedented amount of information about the meat

camera (electronic grading), the first digital camera to

and carcass characteristics of their lambs. Ultimately,

be approved for use in the US lamb industry. The new

producers will be able to make genetic and production

digital camera was installed in October 2015, and Superior

changes to provide US lamb customers with the highest

Farms has worked hand-in-hand with the USDA to secure

quality, along with most consistent product, that we can

approval since then.

deliver,” said Eidman.

uperior Farms, North America’s largest lamb processor, said it has approval from the USDA to

MPJ visited Superior Farms last year (see MPJ May-

“This technology will provide our lamb producers with

The next steps are to, first, pair this information with

June 2017) and saw the system being tested at this

the Electronic Identification (EID) tags so that producers

progressive plant.

can see the data on an individual lamb basis. Second,

Rick Stott, president and CEO of Superior Farms, said of the launch; “Our team worked closely with the USDA for two years validating the camera’s algorithms

to implement the technology in Superior Farms’ Denver facility. “Now that we have received approval from the USDA

to assure accurate full carcass measurements of both

for the camera grading, we can begin implementing

yield and quality grades. “Combining electronic grading

the technology in our Denver facility,” Stott said. “We

with our Producer Portal will allow unprecedented access

look forward to working with the USDA to expedite the

to carcass information by our producer partners that

approval process so that both of our facilities have this

will allow every segment of our industry to continue to

state of the art technology.” The USDA grader will remain

produce a better product.”

onsite to verify that the technology remains accurate and

This grading system will provide Superior Farms producers detailed meat information about their lambs

in-line with the USDA grading standards. The American Lamb Board has been a vital participant

and will include: USDA yield grade and quality grade,

in bringing this development to fruition, funding electronic

ovine cutability calculation (OCC), primal weights (leg,

grading research conducted by The Center for Meat

loin, shoulder, rack, breast, trotters, and neck) and two

Safety and Quality, Department of Animal Sciences,

digital images of each lamb carcass processed, according

Colorado State University, contributioning to the success

to Lesa Eidman, director of producer resources and

of this project..

HSUS rocked by scandal

denied the allegations, and suggested that an

T

investigation into a single complaint from 2005 had

he CEO of the Humane Society of the US (HSUS) has

expanded into other claims as part of “this coordinated

resigned after allegations arose that he displayed

campaign against the Humane Society.”

inhumanity to female staff. Wayne Pacelle, head of the Humane Society for nearly 14-years, increased both the Society’s standing and its bank account during those years. In December, the Humane Society commissioned

A board member, Erika Brunson, 83, told the NYT that she was aware only of what she called a “ridiculous” old accusation against him regarding an alleged affair. “Which red-blooded male hasn’t sexually harassed somebody?” she said “Women should be able to take

a law firm in Washington to conduct an internal

care of themselves.” Since stating these remarks, Brunson

investigation into allegations of workplace misconduct

has resigned from the board.

by Pacelle. The Washington Post first reported the

Will Coggin, managing director for the nonprofit Center

allegations, which included complaints from a former

for Consumer Freedom, said: “It’s clear that HSUS is

intern who said Pacelle kissed her against her will in 2005,

humane in name only. It does not value its female staff, its

a former employee who said he asked to masturbate

donors, or the animals it uses as window dressing.”

in front of her and offered her oral sex in a hotel room in

Pacelle, a hard-core vegan, has targeted the US

2006, and a former employee who said he stopped by

livestock industry since the day he took office, using funds

her office late one night in 2012 and asked her to salsa

gleamed under the guise of helping dogs and cats to

dance with him.

finance this. It is very doubtful anyone in the meat/poultry

In an interview with The New York Times, Pacelle

meatpacking.info

industry will miss him.

November~December 2017

11


CO M M ENT

Work your butt off

T

here are a lot of variables that determine why one

passes. This includes team members, advisors, investors,

brand is successful and another is not. Timing,

and service providers. If they aren’t willing to work at your

packaging, marketing, pricing, and luck all play a big role.

pace and with your hunger, find some who will.

A good team, investors, strong IP, and product/market fit

As I write these words, I feel like I might be painting a

are key factors. But the one that cannot be overlooked or

picture that isn’t complete. Left with only the above, one

undervalued is simply hard work.

might think that in order to succeed you need to be an

I can think of a lot of brands which had many or all of the

overzealous jerk. That it requires an individual out only

above elements but still failed. I know of others that were

for themselves with a win at all cost mindset is not the

missing some of them yet succeeded. In my experience,

case at all.

the common denominator that almost all successful

Everything I just wrote about, it’s a blast. Nothing

brands share is a team that outworks everyone else.

can be more rewarding then driving a business that is

The food and beverage business is tough. To launch a brand, brutal. If you are looking for work-life balance, boy did you pick the wrong path. I’ve written many times that I

disrupting a category, changing the way we feed the world or improving the health and lives of others. Hard work does not excuse bad behavior. Bad actors,

am an admitted workaholic. It’s not something I am proud

regardless of how hard they work, won’t meet with truly

of, nor do I suggest it as route most should take. However,

sustainable success. Hard workers who are aligned with,

in many ways, it has served me well.

and committed to doing what is right for people, planet

What it takes to win in this business is not for the

and profits are the ones who ultimately triumph.

fainthearted. You have to grind, toil and then rinse and

Here’s the rub. You’re in this fight now. If you’re going

repeat. You must wake up every morning with grit and

to win, work harder than anyone else. Do it in a way that

determination and likely go to bed each night with fear

is aligned with your core beliefs and your vision. If you are

and angst. You need to be absolute in your commitment

willing to do that and you expect the same from those

to your company and in your belief in your product and

around you, I like your odds.

the problem it solves. Patience is not a virtue and the acceptance of anything

Elliot Begoun is the Principal of The Intertwine Group, a practice focused on helping emerging food and beverage

less than a dogged pursuit of the end goal from those

brands grow. He works with clients to design and execute

around you is simply unacceptable. This is a hard slog

customized route-to-market and go-to-market strategies

where the odds are not in your favor. Every day matters,

that build velocity, gain distribution, and win share of

every moment counts.

stomach. His articles appear in publications such as

You should hold everybody accountable. No free

12

November~December 2017

the Huffington Post, Meat Packing Journal, and FoodDive.

Meat Packing Journal


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s pe c i a l

r e p o rt

ch i na

Panda remains an import giant for 2018 Despite the USDA describing China’s meat and poultry imports as in ‘decline and constrained growth,’ it’s still a great opportunity if you’re a global trader from the right country. MPJ reports on China and this year’s global meat/poultry forecast.

key global trader. For example, the United States is currently not eligible to export broiler meat to China due to highly pathogenic avian influenza (HPAI) restrictions, according to the US Department of Agriculture (USDA). Even though the US regained access to China’s beef market in May 2017, shipments are likely to be constrained in the short term due to market requirements which limit the ability of the United States to maximize trade opportunities. China is the world’s second and seventh

by velo mitrovich

largest beef and broiler meat importer, respectively, accounting for 13% and 5% of forecast trade.

J

The country’s pork imports are forecast to decline for

eff Bosack has been selling antique silver

the second consecutive year in 2018 as Chinese domestic

jewelry in London’s street markets for

production gains, reducing demand of imported pork. The

years. When the 82-year old is asked which

European Union, United States, and Canada will remain

customers make him want to call it a day, he’s

the principal suppliers, competing primarily on price.

quick with an answer: “The Chinese. The price

With relatively strong demand for processing, imports are

you agree on at the beginning is not the price they pay

unlikely to retreat to past levels, maintaining China as the

you in the end. It’s always lower.”

world’s top importer of pork accounting for nearly one-

So why not stick to your original price?

fifth of forecast trade.

Jeff ways his hand in front of him. “Look at the market.

Chinese beef gains

The only people here with money are the Chinese. I have no choice and they know it.” During this last year, when asked by MPJ every meat/ poultry exporter had the same answer as to where they wanted to sell – China. With a population of 1.379 billion and a gross domestic product of $11.2 trillion

F

rom 2011 to 2016, China’s domestic beef production grew eight percent to 7.0 million tons (carcass weight equivalent), but was outpaced by

($11,200,000,000,000) it’s easy to see why. But Chinese

even stronger consumption growth, which rose 20% to 7.8

importers know the situation, they know where all roads

million tons during the same period. China’s production

lead to, so don’t think for one second you’ll have an easy

is constrained by high costs, inadequate cold chain

time making your big sale.

infrastructure, lack of investment, and a fragmented

China’s beef and broiler meat imports are forecast to

industry of mostly small- scale producers located inland

rise 11 and 7 percent, respectively, in 2018. Despite robust

which is challenged to service primary consumption

Chinese demand coupled with stagnant or declining local

centers in eastern China.

production, additional growth in imports is constrained by restrictions which limit supplies from the United States, a

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November~December 2017

Unable to fully satisfy demand with domestic production, the country has increasingly looked to the

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international market. The United States was the lead supplier with a two-

SWOT Analysis

thirds market share of the then-small $15 million China following 13 years, China’s consumers steadily consumed

Weakness Culture that cuts corners for profits Corruption, especially at local level 7 Rural poverty

past five years as rising prices for broiler meat and pork

more red meat and poultry, owing to both higher individual income levels and population growth. Although traditionally the least consumed meat, beef consumption grew faster compared to pork and broiler meat over the (due to lower production) made beef relatively more affordable and desirable (as compared to buffalo). China is forecast to import 1.0 million tons in 2018, 11

Opportunities Growing middleclass demanding safer 6 meat/poultry Low cost labor Local pork production needs modernization 5

Threats Pathogens can run rampant in livestock Pollution, especially in or near all the major cities throughout China 4 Beef industry short of grass, feed, and 2012 2013 2014 2015 2016 2017 2018 water Year

Imports ‘000,000s MT (CWE)

Production ‘000,000s MT (CWE)

beef market when it lost access in 2003. During the

Strength Massive population and GDP Strong national leaders World’s largest lover of pork 8

percent higher than in 2017. South American countries will remain the top suppliers, as Brazil, Uruguay, and Argentina maintain their strong export growth. Australia, previously the largest exporter to China, will remain limited by its reduced supplies as herd rebuilding continues. Mongolia, China’s neighbor to the north, says that it is posed to increase at a massive scale beef production and slaughter facilities for the Chinese. However, MPJ’s experience in Mongolia leads us to believe this is only wishful thinking and will not happen in the conceivable future. US beef will compete with other high-end beef supplies from Australia and Canada, but will be constrained by the terms stipulated in the protocol. However, US beef has a good reputation in China and

China’s strong beef demand outpaces production and drives imports

may find success in upscale markets.

Global beef 2.5

B

Broiler meat

eef is forecast to grow nearly two percent in 2018 Other

1% Brazil alone to 62.6 million tons with Canada the USA and

‘000,000s MT (CWE/RTC)

2.0

accounting for about half of the growth. Brazil will Argentina

Beef

be spurred by expanding exports but potentially faces

headwinds from domestic industry issues, which show no 3%

Pork

1.5

Brazil

signs of going away. Argentina’s production will continue 9%

New Zealand to be boosted by favorable policy developments and

29%

herd expansion. Having recovered from drought-induced 12%

herd liquidation followed by herd rebuilding, Australia’s 1.0

beef production is rebounding. World exports of beef in 2018 are forecast nearly three percent higher to 10.1 million tons, driven by shipments 19%

from Brazil, Australia, Argentina, and the United States.

0.5

Demand in East Asia will remain robust. China, in27% Australia particular, will continue to drive trade, as domestic

production cannot meet growing consumption. In the 0.0 2013

2014

2015

2016

2017

Year The China Meat Imports 2018: Decline and constrained growth

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November~December 2017

2018

Middle East and Indonesia, oil-producing regions will

Uruguay

continue to be challenged by relatively low oil prices, which hamper economic growth and stymie demand. The China Beef Market: Import shares 2016 US beef production is expected up nearly three percent this year to a record 12.4 million tons, as the USA

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enters the fourth year of its herd expansion. Sustained

shipments are likely to be constrained in the short term

elevated supplies and lower US beef prices will boost

due to market requirements limiting exportable supplies,

exports to Mexico, Canada [as long as NAFTA holds] and

states USDA.

major markets in East Asia. The United States will face renewed competition in

The China beef market that the United States reenters is not only larger by several orders of magnitude, but it

Asian markets from Australia as its herd expands. In

has also become much more competitive. Over the past

Japan, the United States will also have to contend with

five years, most major beef exporters have increased the

Australia’s widening tariff advantage. However, if the

share of their total trade sold to China and will work to

US dollar becomes weaker in 2018 as predicted, could

maintain these gains. In several cases, notably Uruguay

further buoy US beef exports.

and Argentina, China has become an essential market.

Last May, the USA regained access to the China beef

Potential US exports will also have to contend with price

market, allowing exports of fresh/chilled/frozen and

and exchange rate differentials, competitors’ already

bone-in/deboned product, as well as some variety meats.

established trade services, and China’s preference for

But, as MPJ predicted, it would still be a hard slog for

lean versus marbled beef, which is a key American beef

American beef to enter China unless it goes through the

feedlot attribute.

gray markets of Hong Kong and then onto mainland.

China's rules

In the 13 years since the USA lost access due to BSE, China has been transformed from an insignificant buyer into the world’s second-largest importer. China’s domestic beef industry has been unable to boost production at the pace necessary to meet rising demand. As a result, beef imports have grown sharply since 2013, reaching 820,000 tons ($2.6 billion) in 2016. While opportunities exist for US beef exports to China,

meatpacking.info

A

s US beef producers begin adhering to the USChina beef protocol, China’s requirements will limit US exportable supplies. For example, as

there is no mandatory cattle identification (ID) program in the United States, operations will utilize voluntary ID

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expansion in China and to a lesser extent the States. China’s pork production will rise for the second consecutive year. Additions to the sow herd and higher finished weights will both drive production during 2018. Buoyed by strong returns over the past few years, Chinese hog producers entered an expansionary period during 2017 which is forecast to continue during 2018. The industry continues to undergo significant consolidation, hastened by new and stepped-up enforcement of environmental regulations aimed at curbing pollution from swine farms. Producers are fewer in number but larger, as producers respond to growing production costs with increased scale efficiencies. Expansion is expected to drive pork production up during 2017 and 2018 after two consecutive years of declining output. China’s pork imports are forecast to decline considerably over the same period, but remain far above historical levels. Chinese hog producers continue to adjust to a stricter regulatory climate at the same time that the herd emerges from a cyclical low. New standards limiting manure emissions from livestock farms have resulted programs to show the US birth farm or point of origin.

in the closure of swine farms in proximity to vulnerable

Further, China’s prohibition on the detection of growth

water supplies and urban centers. Remaining farms have

promotants requires ranchers to raise non-hormone

been required to invest in costly manure management

treated cattle, which represent a small segment of the

facilities and equipment that small-scale farms cannot

herd due to the reduced efficiency and increased cost of

easily bear. Closures have proceeded at a pace that varies

production.

across regions with a target for completion at the end of

Such cattle are sold at a premium, for example,

2017. While many provinces have completed closures,

averaging an additional $18 per cwt during January-July

implementation is still underway in other provinces,

2017, and sold to a limited number of high-price markets,

including some with dense swine production.

particularly EU and US specialty markets. The pool of cattle already participating in these

According to the Chinese Ministry of Environmental Protection, 213,000 farms were closed or moved during

programs is limited and the biology of raising cattle

the first half of 2017. However, lack of precise data on

implies that it will take time to increase the number of

the pace and full scale of closures continues to cause

slaughter-ready cattle meeting these requirements.

considerable uncertainty over the number of farms and

According to the USDA, the United States has several

hogs remaining.

Export Verification Programs for countries such as the

Several meat and feed companies have announced

EU to facilitate trade in beef. In the short-to-medium

ambitious expansion plans to fill the void left by the exit of

term, beef sold to China will have to be sourced from

small-scale farms. Numerous operations have been built

this specialized segment of the US cattle herd, thus

with modern facilities and capacity to hold thousands of

competing with demand from those markets. In the

sows each. Agricultural authorities offer subsidies to help

longer term, strong China demand may spur more US

farms upgrade handling and treatment of manure, and for

ranchers to adjust their production methods to meet

programs to utilize manure as organic fertilizer.

market demands. With constraints on China’s production

Pig herd decline

expansion likely to persist in the long term, imports are expected to continue growing. US beef could therefore find ample opportunities.

World pork

B

etween 2013 and 2017, China’s total swine herd declined nine percent to 435 million head. The sow herd fell faster, declining 13% during the

same period. The outsized change in sows reflects the Global production of pork is forecast up nearly two percent in 2018 to 113.1 million tons, primarily on

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exit of mainly small, less-efficient producers who could not comply with new standards. The herd is forecast

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2012

2013

2014

2015

2016

2017

2018

Year

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China’s strong beef demand outpaces production and drives imports

s pe c i a l

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8 2.5

Broiler meat

1.0

Beef

Imports ‘000,000s MT (CWE)

1.5

Other 1%

Canada

7

Production ‘000,000s MT (CWE)

2.0

Pork 6

5

Argentina

3%

Brazil

9%

New Zealand

29% 12%

19%

0.5

27%

Australia

4 2012

2013

0.0 2013

2014

2015

2014

2015

2016

2016 Year2017

2017

2018 Uruguay

2018

China’sYear strong beef demand outpaces production and drives imports The China Meat Imports 2018: Decline and constrained growth

The China Beef Market: Import shares 2016

2.5to recover modestly by the end of 2018 while sows are

Broiler expected to be addedmeat by the beginning of 2018. led to a rebound in capacity that is partially offsetting the

2.0

‘company plus farmer’). Integrators build farrowing facilities, but outsource

Historically high prices and the entry of modern farms

‘000,000s MT (CWE/RTC)

‘000,000s MT (CWE/RTC)

4

Beef

Other grow-out to small farmers who own land and feeding 1% Canada

barns. These farmers are provided animals and all inputs Argentina

and guaranteed a minimum price for finished hogs.

impact of farm closures.

While the largest producers still control a minority

Pork production is forecast to grow 1 percent in 2017 and 2 percent Pork in 2018. Pork production growth is 1.5supported by efficiency gains on farm. Production per sow

of hog supplies, growth in this part of 3% the sector now

per year rose from an average 14.2 in 2013 to 14.9 in 2016,

trend which will drive hog supplies during 2017 and29%

with the most efficient producers reporting PSYs of over

2018. Imports are forecast12% to decline for the second

1.025, closing in on rates in the United States. Advancements

consecutive year in 2018 as production gains reduce

in productivity can be attributed to improvements in

demand for imported pork. Although pork production

genetics, animal health, and veterinary care.

is expected to recover in 2018, demand strength will

0.5

Besides expanding barn space, producers are also

investing in technology like automatic feeding and

Brazil

9% appears exceed the exit of small producers, a Newto Zealand

support increased imports.19% However, imports are expected to fall short27% of the peak Australia

monitoring systems which boost animal health and lower

reached in 2014. With production growing in most major

costs. These factors are expected to support growth in

exporting countries, declines in international pork prices

0.0average carcass weights next year. 2013 2014 2015 2016

will keep imports relatively competitive. The European Uruguay 2017

2018

Chinese Year investment

R

The China Meat Imports 2018: Decline and constrained growth

ecord hog prices and large profits during 2016

Union, United States, and Canada will remain the principal suppliers, competing primarily on price. With relatively The China Beef Market: Import shares 2016 strong demand for processing, imports are unlikely to retreat to past levels, maintaining China as the top importer of pork.

encouraged producers to invest in new facilities

Russia ups production

and equipment. Producers reaped profits of $100

per head last year and most producers will at least break even during 2017, despite a substantial decline in finished hog prices. Large and vertically- integrated companies are expanding at extraordinary rates, mostly through the adoption of contract farming arrangements (termed

meatpacking.info

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obust consumer demand for pork will also boost output in Russia, the Philippines, and Mexico. Among major producers, only the European

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Union will reduce output due to a stagnant domestic

other primary markets.

market and export sales.

Chinese production down

Worldwide exports are forecast nearly three percent higher in 2018 driven by strong demand from Mexico, the Philippines, and South America (Argentina, Chile, and Colombia) where competitive prices support gains in per capita consumption. China will remain the top importer, but shipments will fall for the second consecutive year due to rising domestic production. The European Union will remain the largest exporter – unchanged at 2.8 million tons – but export growth is challenged by declining shipments to China and an appreciating euro. US production is expected to grow 4 percent in 2018, continuing strong growth in 2017. Producers have responded to robust domestic and export demand by

C

hina’s production is forecast down five percent to 11 million tons for 2018. This follows declines in 2017 and 2016 of six and eight percent,

respectively as the country continues to struggle with recurring HPAI outbreaks. The impact on producers has varied. Some report only minor impacts, due to improved biosecurity, while others have incurred higher losses due to depopulation, closures of traditional wet markets, and soft consumer demand. Notably, the recent outbreaks of the H7N9 strain have

farrowing more sows while the number of pigs per litter is

primarily occurred in wet markets where yellow-feathered

at record levels. Continued production growth is expected

birds are predominantly sold.

to pressure hog prices in 2018 and help spur a near 5-

In an effort to curb further spread of HPAI, the Chinese

percent gain in exports. Mexico will remain an important

government has closed poultry sections at multiple wet

market for the United States, aided by relatively high

markets. Because consumers prefer yellow-feathered

domestic prices. Shipments will also remain resilient to

birds based on taste and texture, wet market closures

Asia, especially to Japan, and the Philippines

have constrained a marketing channel for these birds. As the stagnant broiler market continues, demand for

Chinese chicken drops

traditional yellow-feathered birds will remain lethargic. Genetics will continue to be an issue as China had typically imported its white-feathered grandparent

P

oultry is forecast to grow one percent in 2018 to

stock from the United States. Through 2014, the United

91.3 million tons, primarily from gains in the United

States supplied nearly all of China’s live chicken imports.

States, Brazil, India, and the European Union.

Following the US HPAI outbreak in 2014/15 and China’s

US and Brazilian expansion is driven by higher exports

subsequent restrictions, the country started sourcing

while the European Union and India are due to slow but

genetics from France. As France later struggled with HPAI

steady growth in domestic demand. China’s production

outbreaks in 2016, China switched to genetics from Spain,

is forecast down five percent in 2018 for a third year in a

New Zealand, and Poland. Although China has recently

row. The country continues to be constrained by highly

started to develop its own supplies of genetics, lingering

pathogenic avian influenza (HPAI), the limited availability

domestic HPAI issues and restrictions coupled with

of genetics, a saturated market, weak prices, and soft

continuing outbreaks globally will limit available supplies.

demand.

Imports up

Exports in 2018 are forecast 3 percent higher to 11.4 million tons. As Brazil recovers from a slow first half of 2017 following quality issues, exports are forecast almost 4 percent higher in 2018. Brazil’s growing exports are driven by rebounding product competitiveness and key competitors negatively impacted by avian influenza related trade restrictions. China’s imports are forecast up

C

hina’s 2018 poultry imports are forecast up, for the fifth year in a row, to a record 480,000 tons; a seven percent increase from 2017. Until 2009,

the United States was the primary supplier of broiler

nearly seven percent as production continues to struggle.

meat with nearly 75% market share. China’s imposition of

Brazil is well- situated to strengthen shipments to China

anti-dumping and countervailing duties in 2010 and HPAI

and further expand its market share.

restrictions in 2014/15 constrained – and then shut off –

US production is expected to rise two percent to a record 19.0 million tons in 2018. Exports will rise three

U.S. shipments. Brazil emerged as China’s main supplier in 2010 with

percent to nearly 3.2 million tons. The United States is

less than 40% market share. By 2016, its market share

now HPAI free – as of August 2017 – higher production will

had more than doubled to nearly 90% and is expected

be supported by growing domestic consumption, rising

to continue to dominate as HPAI-related restrictions limit

export demand from Mexico, and improved shipments to

shipments from other major supplies.

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Meat Packing Journal


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clean

meat

F utu r e

prote i n

Call it ‘clean meat’, ‘fake meat’, ‘lab-based beef’ – or the future With huge investments – even coming from within as major players hedge their bets – nothing has the meat industry more concerned than the development of lab-based meat. However, has the industry hit the panic button too soon? Editor Velo Mitrovich reports

W

e’ve all seen it on menus for years in pubs, restaurants and burger joints, although few of us have tried one. Black bean veggie burgers which, despite your local vegan’s

‘oohs’ and ‘aahs’, taste exactly what they look like: burnt beans with a bit of Mexican spice compressed together into a burger form with the same amount of moisture as a piece of hardtack. No one who has a choice between a real burger or a bean burger ever goes for the bean.

by velo mitrovich

meatpacking.info

What if it was possible, however, to create fake meat in

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clean

meat

a laboratory setting that not only tasted like the real thing,

Californian-based Memphis Meats is going for chicken

but was produced without harming an animal in any form.

photo: Memphis meats

No crops going for feed; no slaughterhouses; no animal rights issues; grasslands and Amazonian rainforests reverting to nature – even the most dedicated meat

value of the global meat industry. With 30 million head

eater would have to acknowledge that there could be

of beef cows in the USA alone, the meat industry is not

something to lab meats.

going away anytime soon, no matter what takes place

Companies that you wouldn’t suspect, such as Tyson

inside a lab.

and Cargill, are pumping millions into several of the

The beginning

US-based start-ups. China has invested $300 million into three Israeli lab-meat companies. If this concept had no legs, would investors such as Bill Gates and Richard Branson be chasing it? Many of the Americans pushing the concept or investing are in Silicon Valley/SF Bay Area. They are about as far removed from a farm and livestock as possible, and

I

n August 2013, the first cell cultured hamburger was cooked and tasted live on air in London. Engineered by a group from three Dutch universities and

funded by Google’s co-founder Sergey Brin, the Dutch

are seeing the possibilities in an entirely different light

government, New Harvest, and others, the research

from traditional protein suppliers.

leading to the burger which most said was tasteless,

If you can recall back in the days when Big Blue – IBM

started in 2005. Made up of around 10,000 muscle

– ruled the computer industry, computers were about as

strands, at Jack-in-the-Box the burger would have set you

small and user-friendly as Hoover Dam.

back around $300,000, or $1.2 million a pound. Dr Mark

However, young techs working in garages and

Post, who headed the research and has since created a

breaking every rule as to what a computer and an IT

spin-off company MosaMeat to bring it to market, called

business should be like, created today’s massive industry.

it “cultured beef”, a name which the US Cattlemen’s

It’s the same mentality and drive that is creating the ‘clean

Association is not taking lying down (see more in sidebar).

meat’ industry. In March 2017, the US-based National Academy of

In the years following the London taste-test, the cost has plummeted, but is still well beyond consumers.

Sciences released a report, “Preparing for Future Products

Memphis Meats is currently working on lab-made

of Biotechnology.” The report was produced at the

chicken meat, which would retail at just under $2,500

request of the White House with a focus on identifying the

per pound (down from $18,000 in 2016). At a southern

products that are likely to be produced by biotechnology

Californian Vons supermarket, chicken breast is $4.99

in the next 10 years. In the report, clean meat is flagged as

lb. Beyond Meat’s plant-based burgers –found in Whole

an area of high growth potential.

Foods and some Safeway locations – cost about $12 per

But before we go any further, there is one figure to look at to put it all into perspective: $90 billion. That’s the

24

November~December 2017

pound ($5.99 for two quarter-pounders). While all the proponents of clean meat talk about

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how cultured meat requires far less land and water than conventional meat production, will produce less climate change gases, eliminates the problem of animal waste

What’s in a label

and fertilizer run-off from agricultural lands growing feed and is ethical, the reality is consumers will not pay for cultured meat unless it costs the same or is cheaper than regular meat. Even if it costs the same as a Beyond Meat plant-based burger, most consumers will take the cheaper option. This could ironically lead to the rich eating fake meat, while the poor are left eating grass-fed beef and cage-free poultry.

How it's made

T

he thing to realize with the clean meat industry, in theory any animal can be used to obtain the cell lines, which starts the whole process. This ‘any

animal’ feature will open an ethical can of worms, the likes of which the food industry has never seen. For example, Jewish rabbis have already been in discussion regarding the issue if the meat would be considered kosher. There is some feeling because the animal is not killed – which starts the kosher process – lab meat will fall into the same category as eggs, which are considered neither meat nor dairy. This means that the mixing of dairy and lab meat (cheese burgers) would be allowed, something that is completely forbidden under Kashrut kosher laws. If suddenly you can eat something that has been banned since the days of Moses, would other kosher laws be questioned or rejected? Muslims groups have said that as long as the animal that the cells come from is halal, then the meat will be halal. Vegans has already jumped into the battle with many believing that while lab meat in theory would be acceptable – animals are not killed or harmed in obtaining a cell – it’s not when looking at the spirit of the movement. Oddly enough, the one person who has eaten more labproduced meat than anyone in the world is Paul Shapiro, former VP of policy engagement for the US Humane Society and confirmed 24-year vegan. (See review of Clean Meat: How Growing Meat Without Animals Will Revolutionize Dinner and the World). These issues, however, are just the tip of the iceberg. For example, a parent could have a cell taken and then feed their family from their own flesh. With some believing that the future of this industry will be home production units, this isn’t as far fetch as it sounds. Pop stars could create their own – literal – burger chain. How much would fans be willing to pay for a Taylor Swift burger? A Donald Trump rump steak? Once an animal is decided on, a cell line is established which means isolating a population of cells

The US Cattlemen’s Association (USCA) has submitted a petition requesting that the Department of Agriculture, Food Safety and Inspection Service (FSIS) establish certain beef labeling requirements as to what consitutes beef. USCA says that its request is consistent with FSIS’s current policy towards the labeling of beef, but further addresses specific additional concerns. For example, in the US there are currently no labeling requirements applicable to products labelled as “beef” or more broadly as “meat” mandated by law. USCA says some major US meatpackers and companies in other countries are heavily investing in creating alternative products that may resemble in appearance and taste beef products, including synthetic “beef” and “beef” grown in laboratories using animal cells, known as “in vitro” meat, “bio meat,” “clean meat,” or “cultured meat.” According to Michael Rowland, in writing for Forbes, the petition to the USDA might violate the First Amendment [freedom of speech and expression] rights that allows companies to label their products clearly and in a way that consumers understand. This approach by USCA, says Rowland, could ultimately backfire. “If there’s one thing today’s consumers don’t like, it’s being told what words they can or can’t use to describe their food. This could make consumers feel even more inclined to experiment with new options that have less impact on the planet and avoid the slaughtering of animals,” writes Rowland. The Cattlemen’s Association says that such products, which are not derived from animals born, raised, and harvested in the traditional manner, should not be permitted to be marketed as “beef,” or more broadly as “meat” products. “The labels of “beef” or “meat” should inform consumers that the product is derived naturally from animals as opposed to alternative proteins, says USCA.

that are stable so they’ll behave in a consistent and

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A 'clean-meat' meatball photo: memphis meats

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predictable way through many generations. According to

piece of tuna. The scaffolding also allows for the ‘fine-

MosaMeat, one sample cell could produce 20,000 tons

tuning’ of the flesh, such as fat marbling.

of cultured meat. Just like in any species cells require nutrients to grow,

All is combined into a bioreactor and growth begins in a process similar to brewing beer. Specht and Lagally

cultured cells require the same. According to Drs Liz

say that like the cell culture media having unique

Specht and Christie Lagally, senior scientists at The Good

requirements depending on the stage of production, so

Food Institute, cell culture media is a nutrient solution

too are the bioreactors, which have to be developed in

containing salts, pH buffers, and the building blocks of

close collaboration with scaffold developers. The total

cellular structures like proteins and fats. It also contains

time from start to finish product varies between three to

molecules called growth factors, which are signaling

six weeks. [For more detailed information as to production

molecules that direct the cells to behave in certain ways.

methods, it is recommended you visit The Good Food

For example, specific differentiation factors guide cells

Institute’s website.]

towards becoming muscle or fat or blood cells. The multiplying cells need a support structure to grow

While much of this seems like science fiction, much like how the early personal computer developers used

on so edible or biodegradable scaffolds are provided.

existing equipment – just combining it in different ways –

Cells grow differently depending on the type of scaffold

much of what clean meat producers are using is already

used, which will help create a burger, chicken breast, or

out there as well, with most coming from the medical

Is fish the future? One company in San Francisco is banking on the idea that lab-grown fish is the future, not meat or chicken. Finless Foods believes that not only will it be able to produce lab-grown Bluefin tuna, it will be able to achieve price parity with real Bluefin by the end of next year. Like most of the lab-grown meat companies, Finless Foods first results have been cost prohibited. Last September costs were running around $19,000 a pound for version one; by the end of the year the company claimed costs were reduced by around 50 percent. The question is, however, what does Finless Foods consider to be price parity? While Bluefin tuna costs make the news every year where the first fish sold at the start of the season can bring in anything from $600,000 to a million plus, the reality is frozen Bluefin can cost anywhere from $10 to $120 a pound, depending on the amount of fat in the tuna, where you are buying it, and the time of the year. In addition, the amount of farmed Bluefin tuna being released into the market can drive the price up and down as well. Last year a 466-pound Bluefin tuna sold for $632,000 at the annual auction held at Tokyo’s Tsukiji Bluefin tuna market, or $1,365 a pound. Even for Japan, which prizes Bluefin tuna above all fish – eating 80% of the world’s

meatpacking.info

catch – this price is artificial, brought up to that height by companies seeking publicity. Buyer sushi entrepreneur Kiyoshi Kimura, head of the Sushizanmai chain, admits that the fish was “a bit expensive”. At that price, a single piece of fatty tuna sushi would cost around $85, or 25 times the $3.40 at Kimura charges at his 51 stores across Japan, according to the Daily Sabah. While the future for red meat and poultry looks established for at least the next 25-50 years, for Bluefin tuna, however, the future is murky. Numerous environmental groups want Bluefin and Bigeye tuna declared endangered and fishing stopped. While Bluefin tuna farming has reached the Holy Grail – raising tuna from egg to finished product – no commercial feed has been established, forcing farmers to use live fish which is affecting wild stocks. In addition, most farmed tuna is “ranched”, where small wild tunas are caught live and raised in pens in Australia or in the Mediterranean until reaching market size. This allows those with Bluefin weight-based quotas to catch considerably more fish – one adult Bluefin tuna would be the same weight as numerous juveniles. This in turn is affecting the fish stocks even more so than just targeting adults. Completely unsustainable fishing/farming for Bluefin, along with high demand, could very well make Finless Foods the first lab-based protein success story.

November~December 2017

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F utu r e

prote i n

clean

meat

research side. The biggest difference is the scale of operation, eg, growing skin for a single burn victim as opposed to growing enough clean meat to challenge

China invests huge

an industry. Even Josh Tetrick, controversial CEO of Just (former Hampton Creek) says it will take a “Manhattansize” project to bring clean meat to consumers. The USA’s Manhattan project was able to create the atomic bomb because the US government was willing to put any and all resources into building it. Will investors feel the same about clean meat?

Will they eat it?

N

o matter what science does in producing clean meat, if there is no market, it will all have been a pointless gesture.

According to a study by researchers at Australia’s

University of Queensland and published in PLOS One, it found that about a third of 673 US-respondents would be willing to eat lab-cultured meat on a regular basis and another third would be willing to at least try it. Nearly half said they would choose it over soy-based/plant alternatives on sale today. In an informal survey by MPJ, all meat eaters said they would be willing to try lab-cultured meat, with a surprising number saying they would be curious as to what human-based lab-cultured meat would taste like. This follows the Queensland survey which found that about four percent of those who said they were willing to try lab-based meat, would be willing to try lab-grown dog, cat, and horse – meats they currently do not eat. However, all vegans and vegetarians – even those who eat seafood, dairy, or eggs – told MPJ they would not eat lab-based meat.

While most of the media’s focus is on the US-based clean meat start-ups, the Chinese government has signed a deal worth $300 million to partner with three Israeli high-tech companies. The companies, SuperMeat, Future Meat Technologies, and Meat the Future are three of eight in the world moving towards this technology, according to Quartz magazine. China’s Science and Technology Daily ran an article in September advocating lab-produced meat as a safe and environmentally more acceptable way of eating meat. “You have two identical products, one for which you have to slaughter the cattle to get. The other is exactly the same, cheaper, with no greenhouse gas emissions and no animal slaughter. Which one would you choose?” asks the article. “It is a colossal market opportunity,” says Bruce Friedrich, head of The Good Food Institute, which supports and lobbies on behalf of meat alternative interests, reports Quartz. “This could put [lab-made] meat onto the radar of Chinese officials who have the capacity to steer billions of dollars into this technology.” The deal will allow Chinese companies to partner with the three Israeli companies.

Paul Shapiro tells MPJ that you should look back at the ice industry for an analogy as to how clean meat will ultimately be accepted. Up until the mid-1800s, ice came from frozen lakes which was stored in ice houses

overfished or it comes from fish farms – and saying they

for use throughout the year. When artificially produced

are willing to pay more for sustainable fish. At least saying

ice came out, it wasn’t popular and there were outcries

that up to the check-out counter when their wallet speaks

against its use.

louder than their ethics and they go with the cheaper

“Natural ice is actually less safe than artificial because natural ice had pollutants; it had horse manure from the

option, no matter how the fish is obtained. If lab-based meat becomes the leading source of

horses who were dragging the ice out of these lakes,”

meat, it won’t be because of ethical reasons, but because

says Shapiro. “So, you ended up having a situation

it’s cheaper and tastes the same. Until these two come

where people shifted over to artificial ice. One hundred

about, the world’s meat industry has nothing to worry

plus years later we all have artificial ice makers in our

about. Orcales co-founder Larry Ellison once said that

homes. We call them freezers and we hardly think there’s

the entire history of the IT industry has been one of

anything unnatural about it at all.”

overpromising and under delivering. With so many of the

Will lab-based meat be the same? That is a hard, hard call. MPJ has witnessed over the years people claiming not to eat certain fish due to ethical reasons – the fish is

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people involved in clean meat also in IT, will this be any different? It doesn’t sound like it. Still, MPJ believes only a fool doesn’t look over their shoulder to see who is coming up fast.

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prote i n

clean

meat

Your guide to the clean meat movement by velo mitrovich

A

book on why lab-grown meat is the protein of the future, written by a former vice president at Humane Society US, seems an odd match for MPJ at so many levels. But if you want to get a good perspective this

emerging industry that has the potential of turning the meat industry on its head, then Clean Meat: How Growing Meat Without Animals Will Revolutionize Dinner and the World is for you. Written by Paul Shapiro, a long-time vegan, Shapiro has the odd distinction of having eaten more lab-cultured meat than anyone else on the planet. While he tells MPJ the experience doesn’t have him reaching for the real thing, it has given him an understanding of the industry and the major players in it.

cell could be grown to produce enough hamburgers to

It might be assumed that Shapiro wrote Clean Meat

feed a large army. The omission of hard science gives the

with fellow vegans in mind, but nothing could be further

book a light feel to it. In addition, during MPJ’s first read it

from the truth. “In the USA, only about five percent of

seemed like Shapiro was too caught up with some of the

the population practices some form of a vegetarian diet,

larger-than-life personalities in the industry, such as CEO

while 0.5% of the population is vegan – this is a very small

Joshua Tetrick of Just (formerly called Hampton Creek),

number,” says Shapiro, “and these people would not be

to challenge their controversial management practices.

interested in eating clean meat no matter how 'clean' it

However, in the second reading it became obvious

was produced.

that Tetrick’s firing of his entire board, being accused

“The majority of Americans are meat eaters and this

of ramping up sales of vegan mayo products, etc, had

book was written for them. If the book makes them think

nothing to do with the story Shapiro was telling in Clean

about the industry, how meat is produced, and what the

Meat.

alternatives are – maybe changing their diet so once or

“What you’re bringing up is something I talked over

twice a week they eat clean meat or a plant-based meat

with my publisher – I had wondered about the same

substitute, then I’ll feel like I’ve done my job.”

thing,” Shapiro tells MPJ. “In the end, we decided that the

Will clean meat, however, be something that we’ll see on supermarket shelves any time soon to give us that choice?

book was about clean meat, not about personalities.” MPJ can without reservation recommend this book for those of you who want a greater understanding of the

“I don’t know, most of the companies have not met

clean meat movement, who the major US players are,

their overly optimistic production dates so only time will

and why clean meat will ultimately become successful.

tell,” he says. “Compared though to how much it cost to

While it is doubtful today’s MPJ readers will be turning

produce just one clean meat burger a few years ago to

from real steak to clean meat, it is pretty much a given our

today, there has been significant progress. Will the price

children and grandchildren will be eating clean.

get down from being a Whole Foods one, to a regular supermarket price that everyone can afford, again, only time will tell.” MPJ wishes Clean Meat had more details of the actual production process, explaining how a single ‘donated’

meatpacking.info

Clean Meat: How Growing Meat Without Animals Will Revolutionize Dinner and the World Paul Shapiro Gallery Publishing 2018

November~December 2017

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nigeria

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Wahala! Nigeria is often touted as the next big thing for agriculture/food investment – and just not in Africa but globally. The country’s rapid population growth will demand reforms across-the-boardreforms or it will fall into total collapse and cease operating as a single country. The payoffs could be big – very big – but it will take more than a gambler’s icy nerves to see you through. Editor Velo Mitrovich reports on Nigeria and offers an alternative West African country

O

ne thing Nigeria doesn’t lack and that’s play in language. Combining English with Yoruba is: ‘My oga at the top’ – my boss’ boss; ‘Ginger my swagga’ – help someone feel good. But if you are

contemplating investing in Nigeria, there are two more you need to know. ‘Shine your eyes’ – beware/stay alert, and ‘wahala’ – which means trouble, annoyance, and headache all rolled into one. On paper Nigeria sounds like the real deal. About twice the size of California, geographically it sits close to the heart of Africa – about 10 degrees north of the equator. It’s the most populous country in the continent and the eighth largest in the world by population size. With an estimated population of 192 million people (70m aged 15-35), it has one of the fastest growing populations – not

by velo mitrovich

only in Africa but in the world – and destined to have the fourth largest population by 2050. A large population can mean low wages and Nigeria’s labor cost is one of the most competitive in the world, with an average monthly wage of $213.

SWOT Analysis

The government is desperate to attract more foreign direct investment. Opportunities exist for new and used

Strength Favorable weather Low labor costs Support of international agencies Massive natural resources

equipment required in the poultry industry. Importers

Weakness Too focused on crude oil Largely small holders in agriculture 250 tribes – society easily fragmented Corruption and cronyism are rampant

access to America (North & South), and Europe with six

of agricultural and agro-allied industries machines and equipment enjoy 0% duty and for investors a tax holiday (pioneer status) is granted for three years and renewed for the next two. Located in the Gulf of Guinea, it has direct freight operational ports. It boasts 54 airports – 40 with paved runways – which connect Nigeria both internally and externally. According to the IMF, Nigeria is the second wealthiest country in Africa – beaten out only by the Seychelles in

Opportunities Growing domestic market Abundance of raw materials Large income from crude oil Massive need of modernizing poultry

the Indian Ocean – and is on track to be in the world’s top 20 wealthiest within two years. It’s blessed with an abundance of natural gas, petroleum, tin, iron, ore, coal, lead, and zinc. Nigeria is the leading exporter of oil in Africa today and one of the leading oil exporters in the world – ranked sixth in 2017.

Threats Religious and ethnic conflicts Frequent change of government Bloody clashes between herdsmen and farmers Meat and poultry smuggling

Populations need to eat and with the oil reserves the country has, there should be enough money to invest in education, agriculture, poultry plants, and fish farms for decades. There, too, should be a vibrant economy thanks to petroleum revenues, with a spill-over to consumers creating a strong, vibrant middleclass. “Should be”, however, is the key phrase here.

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nigeria

Socio-demographic indicators Total Population (number of inhabitants) (2014)

181M

Population growth (2013)

3.2%

Agricultural Population (number of inhabitants '000,000s) (2011)         

98

Agricultural Population (annual growth rate) (1998-2008)      

-0.43%

Rural Population (% on Total Population) (2008)

51.6%

Coruption

Unemployment rate (2014)

25.1%

International support

Ratio of economically active male to female population in agriculture (2008)

1.58

confidence and risk index Business Climate Trade deals Political system

Agricultural resources

Source: FAOSTAT

Poverty Education system

Poverty and hunger indicators

GDP growth

Rural poor as a percent of total poor population (2012)

70.3

Infrastructure

Rural hungry as a percent of total hungry population (2012)

65.5

Infrastructure development

Rural extreme poor as a percent of total extreme poor population (2012)

74.1

International logistics

Undernourished people on total population (%) (2012)

24.2

Government transparency

Source: FAOSTAT

Budget deficit Starting a business

Land and Inputs

Enforcing contracts

Total land area (ha) (2007)

92,380,000

Paying taxes

Agricultural Land Area (ha) (2007)

78,500,000

Arable land (% of Agricultural Land Area) (2007)

46.5%

Irrigated land (% on Agricultural Land Area) (2007)

n.a

Forest area (% of land area) (2007)

11.3%

Agric.Water Withdrawal (% of total freshwater withdrawal) (2002)

69.8%

Fertilizer Consumption (tonnes) (2007)

34,250

Tractor in use (numbers) (2007)

30,000

Legal rights Construction permits Buying property

Source: Reby Research, Coface, World Bank

Source: FAOSTAT

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Production quantity of major crops (2012)

Trade indicators Merchandise imports (current US$) (2008)

41.7 billion

Merchandise exports (current US$) (2010)

81.9 billion

Share of agriculture imports on total merchandise (%) (2010)

9.2%

Share of agriculture exports on total merchandise (%) (2010)

0.9%

Source: FAOSTAT

Exports (2010) Quantity (tonnes)

Value ('US$ current rates)

Coffee, green  

153,987

226,966,000

Tobacco, unmanufactured

25.055

65,973,000

Tea

44,015

47,629,000

Quantity (tonnes)

Yield (hg/ ha)

Yield Annual Growth

Cassava

6,401,996

50,950,291

1987-1997: 1.0% 1997-2007: -0.6%

Yams

4,487,946

37,318,900

1987-1997: 7.0% 1997-2007:  -1.0%

Sorghum

5,099,815

5,837,106

1987-1997: 0.4% 1997-2007:  0.5%

Oil Palm Fruit

8,500,000

26,984

1987-1997: -0.1% 1997-2007: 0.3%

Rice

2,863,815

5,432930

Maize

5,751,300

8,694,900

Source: FAOSTAT

Livestock production (2014)

Source: CountrySTAT

Quantity (souls)

Imports (2007)

Chickens

144,951,671

Goats

72,466,698

Quantity (tonnes)

Value ('US$ current rates)

Cattle

19,542,583

Wheat

337,026

117,400,000

Sheep

41,326,780

Palm Oil

143,703

100,935,000

Pig (2012)

6,795,101

Sugar Refined

88,410

39,042,000

Camel (2012)

278,561

Source: CountrySTAT

Source: CountrySTAT

Economic indicators

Meat Production (tonnes)

GDP (current US$) (2014)

573,586.83

Cattle meat (2014)

381,080

GNI per capita (current US$) (2013)

2,943

Game meat (2014)

270,742

Agricultural GDP on total GDP (%) (2014)

20.24%

Pig meat (2014)

136,037

National budget spent on agriculture (%) (2008)

7.0%

Goat meat (2012)

216,827

National budget spent on rural development (%) (2008)

n.a.

Source: FAOSTAT

Source: CountrySTAT

Fish Production (tonnes) 1997

2007

Capture fish production

387,923

530,420

Aquaculture fish production

24,297

85,087

Source: AQUASTAT

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0

6

33 50

96

100

130 145

147

150

172

171

179

183

190 Starting a business

Dealing with construction permits

Getting electricity

Registering property

Getting credit

Protecting minority investors

Paying taxes

Trading across borders

Enforcing contracts

Resolving insolvency

World ranking of Nigeria in 'doing business' factors out of a total of 190 countries graph: world bank

Slippery oil

been attacked and workers kidnapped and held for ransom, or murdered. And here is where the irony of Nigeria begins. Despite

I

n 2016 Nigeria’s state-owned oil company failed to

the vast amount of oil being pumped, Nigeria imports

pay the government $16 billion in a suspected fraud

most of its fuel due to a lack of refining capacity. This

case, which was discovered by the Nigerian auditor

leads to chronic shortages – as seen over this last

general, Samuel Ukura. According to numerous sources, the Nigerian National Petroleum Corporation (NNPC)

Christmas period – and illegal tapping of oil pipe lines. Not surprising, based on “perceptions”, Nigeria is rated

provided no explanation at the time for the missing funds.

the most corrupt nation in the world, according to US

Oil revenue accounts for two-thirds of the government’s

News’ best country rankings (Switzerland is rated “best”).

funding – without these funds the entire country suffers.

Nigeria’s actual placing is not quite as bad, but thanks to

The NNPC claimed that the loses weren’t that great –

so many of us over the years getting bogus email offers

only around $1.64 billion – due to the audit not taking into

from Nigerian princes or bankers – all wanting a ‘trusted

account maintenance fees, a subsidy on oil products, and

friend’ and bank account details – it’s hard to think of the

losses from crude oil theft.

country otherwise.

The reality, however, is that the Nigerian government has no idea how much oil is being pumped on shore or at sea, and where it goes. Petroleum company ownerships

It’s just not outsiders, though, that see Nigeria as a challenge of epic scale. Dele Sobowale, Nigerian political writer and

are hidden in shell companies, made up of both local

curmudgeon, recently wrote in Vangaurd: “Governing

– with strong ties to whoever is in the presidential chair –

Italians is not impossible; it is merely useless” – Benito

and foreign players. Nigeria’s main onshore oil production

Mussolini. Mussolini was fortunate; he had Italians

region, the Niger Delta Region, has been racked by

to govern and not Nigerians. He would have shot

violence since the 1990s over tension created by foreign

himself long before his enemies got him, if he had my

oil corporations and a number of the Niger Delta’s

countrymen as subjects. There is probably no nation

minority ethnic groups who see no profits returned to their

on earth where the people are the worst enemy the

impoverished region. Offshore, petroleum companies are

government has to face as Nigeria. Indeed, it might be

allowed to regulate themselves, this includes keeping

right to claim that no external enemy will attack Nigeria

track of the amount of oil pumped. These oil rigs have

and inherit the confusion and the lack of patriotism.”

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same time as Nigeria’s ban, nearby Ghana also took the

Smuggled meat and poultry

same tact. After a few years, it declared the experiment to be a failure and reduced the tariff on poultry. While

W

hile it might have been almost any part of Nigeria’s economy that Dele Sobowale was focusing his wrath on, it was actually chicken

this decision negatively affected Ghana poultry farmers, consumption in Ghana went up. According to the recent International Food Policy Research Institute discussion paper “Eggs before

that attracted his poison pen. The potential of this industry

Chickens: assessing Africa’s livestock revolution,” some

and its reality are so far apart, we could be discussing

of the frozen chicken Ghana imports – primarily from the

different universes.

USA, EU, and Brazil – goes from Ghana straight to Nigeria

Dr Ayoola Oduntan, former national president of the Poultry Association of Nigeria, says that poultry is a

where it is smuggled in. One knock-on effect of the smuggling is that

trillion-naira ($2.77 billion) business in Nigeria. While this

investment is not being made in feed mills, hatcheries,

sounds great, around 70-75% of all chicken consumed

cages, or processing plants. Even if everyone in Nigeria

in Nigeria is smuggled in, depriving the local poultry

suddenly agreed to quit buying smuggled poultry or

industry of revenue it needs for growth. Demand in

only buy local, the infrastructure is not in place to meet

Nigeria is around 2 million metric tons (MT) annually.

this demand. According to the USDA’s Gain Report on

Nigerian farmers have the capacity of producing 700,000

Nigeria’s grain and feed industry, limited government

to 1 million MT, but are only able to produce 300,000 MT,

support to farmers, inadequate basic infrastructure,

leaving a wide gap of more than 1.7 million MT, which

raising cost of farming inputs, and insecurity and

smugglers are happy to fill. The irony is, currently N2.5bn

hampering agricultural development and productivity in

($6.9 million) of locally produced chicken is wasting away

the country. Nigeria’s grain producers are predominantly

in government freezers around Nigeria, due to the fact

subsistence farmers with very limited financial resources,

that smuggled chicken is cheaper.

limiting the size and scope of the farms.

In Nigeria, meat, fish and animal products are the

An additional problem with feed is its high price. Feed

fourth most commonly consumed food group (88.9%)

accounts for 60-70% of the poultry farmer’s budget

by households. Its consumption lags behind grains

Nigeria. Maize (corn) is the main poultry feed ingredient,

and flours (97.2%), oils and fats (96.8%) and vegetables

but it is a staple feed source of humans in West Africa,

(96.7%). Compared to other food groups, average weekly

and a major industrial raw material. As such, it is not only

household expenditure was highest for meat, fish and

expensive but often scarce.

animal products at N359 per week ($1.00), according to Olumide Aborisade of Texas Tech University. A variety of meat products are purchased and

The other important feed source is soya meal, most of which is imported. Experts have often made the point that if poultry production is to become viable in Nigeria or the

consumed across the country, including poultry, beef,

rest of West Africa, it must be based on feed ingredients

mutton, goat, and pork. The acceptance and popularity of

which are not in competition with human consumption or

each meat product varies by region. For example, pork is

industrial uses.

not as widely accepted in the northern part of the country

No exports

as it is in the south. This is mostly due to religious reasons. The northern population are predominantly Muslims while the southern populace are predominantly Christians. Like the rest of western and central Africa, ‘bushmeat’ is regularly eaten – this consists of wild animals which are often captured, killed, and smoked. Research has linked

T

he cattle, sheep, and goat industry is also in dire shape. It also faces the same official ban on imports, and instead is fueled by a major informal

bushmeat to Ebola – mostly fruit bats. Nigeria sponsored

regional trade in animals that stretches from Senegal

an aggressive media campaign to curb bushmeat

to Sudan. There are no livestock or meat exports from

consumption which was well-planed and successful.

Nigeria due to the growing domestic demand, a situation

In 2002, an effort to support the local poultry industry

that is not expected to change within the next 10-20

led Nigeria to ban the import of frozen chicken (in

years, according to the Growth and Employment in States

actuality imported poultry is not banned, but the tariff is

(GEMS), a UK government-funded program supporting

so high, it acts as a ban). This plan hasn’t worked for either

the Nigeria meat and leather industry.

farmers or consumers. On paper, it appears that Nigeria’s

Most cattle are raised by traditional methods in the

consumption of poultry per capita is now less than 1

north of the country. During the 1990s a fattening program

kilo, but with so much smuggled in, nobody knows how

was introduced but this wasn’t sustainable. For many

much poultry is being consumed. Ironically, around the

farmers, livestock is considered a form of ‘money in the

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Nigerian history Nigeria – officially the Federal Republic of Nigeria – is a federal constitutional republic comprising thirty-six states and one Federal Capital Territory. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast lies on the Gulf of Guinea, a part of the Atlantic Ocean, in the south. The capital city is Abuja. The three largest and most influential ethnic groups in Nigeria are the Hausa, Igbo and Yoruba. Before 1914, there was never a country called "Nigeria", the people in what is known as "Nigeria" consisted of four different 'empires', some of them extending into parts that are not part of current-day Nigeria, like areas of current-day Ghana and Cameroon. In the 1800s the British Empire came to the region and in 1914, Nigeria was formed by combining the Northern and Southern Protectorates and the Colony of Lagos. If a line could be drawn dividing the country in half, the north was, and still is, Muslim, while the south is largely Christian. In 1960 Nigeria obtained its independence from Britain and became a republic. However, for much of the next 40+ years, Nigeria suffered

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from a series of military coups, often along tribal lines. Often times, too, each succeeding general seemed determined to reform Nigeria. States and regions were either spilt or joined together. In 1967, General Yakubu Gowon moved to split the existing 4 regions of Nigeria into 12 states. However, the military governor of the Eastern Region refused to accept the division of the Eastern Region, and declared the Eastern Region an independent republic called Biafra. This led to a civil war between Biafra and the remainder of Nigeria. The war started in June 1967, and continued until Biafra surrendered on January 15, 1970 after over 1 million people had died, many through starvation. As of recent, Nigerian civilian presidents can be labeled either corrupt, inefficient, or impotent in the face of economic disasters and/ or militant organizations. The largest of these is Boko Haram and located in northeast Nigeria. Over 2.3 million people have been displaced by the fighting between the Muslim extremists and the national army, with at least a quarter million people having fled Nigeria. In 2014, Boko Haram kidnapped 276 schoolgirls. Despite Hollywood stars condemning the action, most of the girls still remain with their kidnappers and this February, over 100 more girls were kidnapped by Boko Haram.

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bank’, and are only sold on when necessity dictates. In addition, most of Nigeria’s cattle industry is used for dairy, with either male calves or non-producing cows moved

Nigeria Survival tips

onto meat. Livestock traders buy and sell livestock and move it through the intermediate markets until the livestock reaches the terminal market. The price of shipping livestock is the same as shipping processed meat in refrigerated trucks so much is shipped live. Traditional open air market stalls dominate the red meat retail sector, accounting for around 85% of all trade, and sell all items including meat and fifth quarter products, according to GEMS. Meat is slaughter and sold

No exceptions Everyone needs a visa to visit Nigeria. Three-month visas cost up to $300 depending on the nationality. Visas can be extended in Lagos, but Lonely Planet warns that “it is a byzantine process of endless forms, frustration and dash, with no clear sense of success.”

on the same day, with consumers eating it on the same day as well. The other small but growing end market segments and their market shares are in-store retail (3%), supermarket retail (1%), fast food (5%), and hotels and restaurants (3%). Various laws, regulations, and codes of practice governing the meat sector are substantially ignored as there are not adequately-resourced, functional

Pin-cushion Course/boosters advised: diphtheria; hepatitis A; polio; tetanus; typhoid, yellow fever. Vaccines to consider: cholera; hepatitis B; meningococcal meningitis; rabies. A yellow fever vaccination certificate may be required at customs.

organizations providing monitoring and control. According to GEMS, none of the slaughtering, transport and processing infrastructure in current operation complies with the regulatory environment. If these, however, were the only problems the cattle industry was facing. In an attempt to stop the incessant bloody clashes

Don’t get sick Healthcare in Nigeria is of poor quality and there is little in the way of emergency care. It is recommended highly that you make sure your insurance will cover the cost of possible repatriation.

between herdsmen and farmers, the government has just started a policy of “cattle colonies,” says the Minister of Agriculture and Rural Development, Chief Audu Ogbeh. He says that while cattle ranching is more of an individual venture for the herdsmen and those wishing to invest in

Main arrivals Lagos’ airport is Murtala Muhammed International and has both international and domestic flights. Beware of touts.

the livestock sector, cattle colonies are a larger project where up to 40 ranchers can share the same facility that will be provided by the government at a reduced rate. Each state has been asked to set aside land for these colonies; so far 16 out of 36 have agreed to this.

Pass on water Tap water is not drinkable in Nigeria. Be careful to also avoid iced drinks. Only drink bottled or boiled water.

By concentrating herdsmen/ranchers together, it will be easier to develop the agriculture value chain with modern facilities such as abattoirs and meat warehouses for processing finished projects.

No cammies It’s illegal to wear camouflage or armystyle clothing.

As to be expected in Nigeria, this program is not without controversy. The main tribe that will benefit from this are the Fulani who are traditional herdsmen. Some are accusing the government of using this program to colonize states with Fulani.

Agriculture investments

T

he agriculture sector is central to Nigeria’s economy, accounting for 42% GDP and providing 60% of employment. However, the sector only

Avoid jail Nigerian detainees spend an average of 3.7 years behind bars while awaiting trial, with trials themselves often lasting for several years. The kicker? Very few people are convicted once they make it in front of a judge. Best time The high season is considered from November through February.

represents one percent of exports and over the past

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nigeria

30-years, growth in the agricultural sector has slowed

The majority of Nigeria's meat production is local

down and today it is under performing.

photo: shutterstock

If Nigeria could increase its poultry and meat exports, it would find a market through those countries it has trade deals with. Nigeria is a member of the Global System of

However, except for one quarter in 2016, the Nigerian agriculture sector grew by over 12%.

Trade Preferences among Developing Countries. This

Speaking during the 2108 budget presentation last

is around 40 countries including Argentina, Venezuela,

year, Buhari said: “Two years ago I appealed to people to

Brazil, North Korea, and Thailand. It is also a member of

go back to the land. I am highly gratified that agriculture

the Economic Community of West African States.

has picked up, contributing to the government’s effort to

There are several big money projects in the works that should start making a difference in production.

restructure the economy.” However, throughout the agriculture sector a lack

The Nigerian Incentive-Based Risk Sharing System for

of storage, infrastructure, and processing facilities is

Agricultural Lending (NIRSAL). This $500 million project

hampering the industry. In addition, most farms in the

aims to “de-risk” agricultural lending and lower the cost

country lack access roads, making it difficult to bring

of lending for banks. Its targets are: livestock, crops,

products to the markets.

mechanization, logistics, and poultry. At the beginning of January, Nigeria’s President

During the meeting, the Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri,

Muhammadu Buhari proposed pumping around 119

said the government would ensure that smuggled food

billion naira ($330 million) into the country’s agriculture

products are not sold in the country, reports The Nigerian

industry this year, an increase of N15 billion ($41.7 million)

Leadership.

over last year’s budget. For most of 2016-17, oil production fell in Nigeria due

“The federal government will do everything possible to ensure that these smuggled products are not allowed

in large part to militant activities in the oil-rich Niger

to be sold in Nigeria,” he said. The poultry stakeholders

Delta region which saw numerous pipelines blown up.

who spoke during the meeting, said: “We need to create

This resulted in Nigeria experiencing its first recession in

a poultry village where our meat processors can establish

over 20-years, high inflation, dollar liquidity crunch, and a

their poultry…if they can give us land, we are ready to

budget deficit in government spending.

develop it.”

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November~December 2017

Meat Packing Journal


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g row th

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November~December 2017

ghana

Meat Packing Journal


ghana

G row th

M a r k e t

Ghana up for poultry investment If you’re looking for an investment in West Africa, but want to a safer bet than Nigeria, MPJ suggests you look at Ghana whose “number one focus is agriculture investment”

A

ccording to the IMF, real GDP growth for

source of protein has increased steadily over the last

Ghana is projected to reach almost six

three decades and will continue over the next 34 years,

percent in 2017 and nearly nine percent

according to noted Gahanna business writer Kofi Aaron

in 2018, following three successive years

Agyei-Henaku.

when the increase was four percent or less.

This demand is partly due to significant factors such as

This is but one of several indicators of economic

the increase in urban population growth rates, increasing

recovery, according to Alan Kwadwo Kyerematen, the

average per capita income of urban dwellers leading to

Ghana Minister of Trade & Industry, who adds that Ghana

better purchasing power, and increasing per capita meat

has become an investment destination for a number of

consumption triggered by a shift in eating patterns from

strong reasons.

home cooking to fast foods that have chicken almost

“The first critical element that draws investors is an opportunity to do business. We are presenting a number

always as the meat of choice. According to poultry producers, broiler production

of opportunities, and we provide good infrastructure.

is not profitable in Ghana as it is currently practiced.

We have functioning ports and a complement of roads,”

Feed costs represent over 60-70% of overall production

says Kyerematen. “Our number one focus is agriculture –

costs. Despite rising feed costs, producers are unable to

agribusiness which includes investments in agriculture.”

dispose broiler birds at six weeks and must continue to

Other reasons that Kyerematen cites are the length

feed their birds over 10 weeks, which further increases

of time Ghana has been economically solid and a stable

feed and medication costs. High energy cost also affects

government.

overall production. With high production and energy

“If you are investing in a market that is politically

costs, producing domestic broiler birds is becoming more

unstable, then I'm not sure that you can realize your

uncompetitive compared to imported poultry products.

business objectives. Our democratic credentials are solid.

According to the industry, raising layers is more profitable

Ghana is peaceful and safe.”

than raising broilers, and there is minimal competition in

According to Rabobank’s Kees Verbeek, senior banker Africa, the time is now for African poultry investment.

marketing of eggs. The USDA estimates that Ghana's 2017 broiler meat

“Driven by a rising middle class and rapid urbanization, a

production will reach 35,000 tons, supplying less than

more modern poultry industry is taking shape in Africa,”

25% of demand. Imports are expected to increase by

he says. “Modern poultry supply chains are attracting

14,000 tons to 158,000 tons due to insufficient domestic

investors – with companies usually starting with feed mills

supply and rising demand. US poultry meat exports to

and hatcheries and building from there. We see a trend

Ghana hold over 35% market share. Competition from

of building a smarter poultry value chain, encompassing

Brazil and the European Union has been increasing;

breeding, grow-out farms, and processing facilities.

however, US poultry enjoys brand loyalty advantage over

“However, capturing this African poultry investment opportunity is not easy. It requires a pioneering spirt, a

its competitors. About 80 percent of exported frozen chicken to Ghana

good market and risk assessment, capable local partners

is processed into cut portions/parts, mainly chicken leg

and patience, as investment risk can be high. If done well,

quarters and wings, with the remaining 20 percent being

the rewards can be large, especially for companies that

frozen whole chickens and gizzards. Frozen poultry is

move easily and are well prepared,” says Kees.

widely distributed in the country, through a network of

In Ghana, the demand for poultry products as a

meatpacking.info

privately-owned cold stores located in major cities.

November~December 2017

41


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new

zealand

Big meat from little country Few countries have made such a huge impact in the meat industry as New Zealand has with lamb. However, with labor disappearing – along with a worldwide seemingly taste for lamb – can the Kiwis continue to rule the meat chiller? Editor Velo Mitrovich reports

T

here is no escaping the influence of New Zealand on the meat industry. With the Kiwis shipping lamb to 122 countries, the odds are always in your favor of finding it worldwide in the freezer or cooler case of supermarkets.

This market penetration is amazing, considering that New York City’s population is nearly twice that of all of New Zealand. Throw into this equation the distance NZ is from the rest of the world, and it is even more surprising that

by velo mitrovich

this sparsely-populated green country is the world’s key lamb producer. While local lamb producers in the United States,

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new

zealand

Greece, England, Wales, and France complain about the globalization of NZ lamb, in the end supermarkets go with

e s ta b li s h e d

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domestic subsidies. The New Zealand government has created Trade

price and consistency and in these two categories the

Agenda 2030, which it says will help support the

Kiwis rule.

industry’s competitiveness in the current increasingly

Exports are the lifeblood of the sheep and beef sector with 92% of New Zealand’s sheep meat production and

challenging global trading environment. “We want to eliminate or reduce barriers that restrict

83% percent of beef production exported, according to

New Zealand exporters and investors from accessing

New Zealand’s Meat Industry Association (MIA).

overseas markets. And once our exporters are operating

Open and predictable market access is therefore vital

in a market, we want them to be confident that the rules

for the on-going success of its export-focused sector

of the game won’t change on them arbitrarily. Trade

by creating a stable and level playing field on which to

Agenda 2030 sets a target of 90% of New Zealand’s

compete across the world.

goods exports covered by FTAs by 2030,” says the New

In the face of growing anti-globalization sentiment

Zealand Department of Foreign Affairs and Trade.

internationally and some uncertainty in the international

More than lamb

trade environment, it is important that New Zealand continues to protect current access while looking for opportunities to open up new export markets. The industry has benefited significantly from the suite of New Zealand trade agreements – its industry saved approximately NZ$211 million ($153m) in tariffs as a result of the free trade agreements (FTAs) that are in force, including with China, Taiwan, and Thailand. But there is still more to be done, says MIA. Agricultural exports

N

ew Zealand is the global leader in lamb and deer meat exports and has a strong position in beef exports; other species are primarily focused on

the domestic market, although in recent years, chicken exports have been growing Both New Zealand and Australian lamb production has

continue to face major barriers around the world, such

been flat for forty years. Falling domestic consumption

as high tariffs, increasing use of non-tariff barriers, and

at home has made more meat available for export. New

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new

zealand

Zealand and Australia together account for more than

SWOT Analysis

seventy percent of global lamb exports. NZ lamb exporters primarily compete with each other and Australian firms. The major lamb consuming countries

Strength Very stable government Well organized meat industry Very little corruption Climate ideal for livestock Over 135-years experience transporting meat long distances

are effectively, the major lamb producing countries. In other words, the regions that grow lamb, eat lamb (and those that don’t, don’t). However, most major lamb consuming countries are too poor to afford NZ lamb in quantity. The key markets for New Zealand and Australian lamb are a handful of rich Western countries and the Gulf States. Supply is primarily counter-seasonal lamb

Weakness Economy dependent on foreign investors Lack of skilled workers for meat industry Vulnerability to natural disasters (earthquakes) Inefficient use of meat plants Limited in-market knowledge, especially in Asia

for consumption around the time of traditional religious holidays – Christmas, Easter and the end of Ramadan. Lamb production flat-to-falling in these key markets and lamb consumption per capita falling due to an increasing price gap with other more efficient meats like chicken. China is a rapidly emerging market for New Zealand’s lamb exports, but also a strongly growing producer. China has gone from producing a fifth as much lamb as New Zealand 40 years ago to more than four times

Opportunities Robotics in processing plants Needs outside R&D Further negotiation of free trade agreements with key countries – Iran, UK, Religious-based food restrictions (e.g. Sikh, Muslim, Jewish, Hindu) – also a risk Ability to extend shelf life of chilled product (extend season window)

as much today. However, China is currently a growing customer and is unlikely to be a threat in key markets within the medium term. NZ is a minor global producer of beef (~1%). NZ beef breeds, such as Angus, have declining numbers and are not generally finished on grain, as is preferred by key premium markets. In addition, a growing proportion of beef production is a secondary product of the dairy industry, not optimal for meat quality. Grass-fed beef has achieved minimum consumer cut through to date and

Threats Movement to buy only local lamb Fewer people eating lamb in developed markets such as USA Highly dependent on air/ship freight Liquid energy shortfalls Southern South America (Argentina, Uruguay, S. Brazil) improving their pasture system and “catching-up” with New Zealand

sells at a discount to grain fed overall, despite healthy attributes. This low fat beef is however valued for patties in foodservice such as supplying McDonalds. Brazil and Australia are both major producers and exporters of beef into key NZ markets; in addition, the USA is increasing beef exports driven by the weak USD, leading to increased imports of manufacturing beef. NZ pioneered deer farming in the 1960s. The industry has two income streams venison and deer velvet (this is the ‘fuzz’ which comes off antlers and is used in Chinese medicine). The number of animals is in decline and long term economic viability unclear without major sustained breeding program to improve relative animal productivity. New Zealand has a modern chicken industry with four processors (Tegel, Inghams, Brinks, and Turks). NZ chickens have an excellent feed conversion ratio due to lack of key poultry diseases. Exports have recently started growing strongly off a small base. With pork there is little to celebrate. NZ pork production has been flat for 40+ years and growing consumption of bacon, ham and small goods is being filled by frozen imports. The domestic industry now predominantly supplies fresh pork and is currently

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new 1

1

3

1

zealand 1

e s ta b li s h e d

m a r k e t

2 9 21 32

37 56

50

100

150

190 Starting Dealing a with business construction permits

Getting electricity

Registering property

Getting credit

Protecting minority investors

Paying taxes

Trading across borders

Enforcing contracts

Resolving insolvency

In 'Rankings on Doing Business topics', NZ is a world leader SOURCe: world bank group

The New Zealand meat industry continues to have

uncompetitive in export markets without moves to

significant excess capacity, particularly in lamb. The

improve productivity to global best practice.

ongoing decline in New Zealand sheep numbers has

Investment opportunities

generated significant excess primary processing capacity, especially for lambs. This, in turn, has often led to bidding wars among competing industry buyers as each strives to

P

otential areas for new and/or external investment

meet the volume required by their plant(s). Prices paid to

primarily transforming ingredients rather than

farmers rise and processor margins are reduced resulting

producing more ingredients. According to the

in lowered financial returns.

World Bank, New Zealand rates #1 in the world for ease

Over the years, numerous firms have exited the

of doing business for the second year in a row, ahead of

industry. There is every indication that the problem

SFF

NZ$2,147

of declining sheep numbers and its corollary, excess

190 other economies. “This ranking ANZCO recognizes the effectiveness of New NZ$1,450 Alliance

processing capacity, will continue, says MIA. Ownership of top four processors, who account

Zealand’s business regulators, including the speed and

NZ$1,362

efficiency of the company registration process,” says Ross

for~75% of both lamb and beef production, is locked up

AFFCOgeneral manager of Business Integrity NZ$1,200 van der Schyff,

with limited opportunity for new outside capital to

Progressive & Zealand. Services of New

Other participate: Alliance is a farmer-owned cooperative;

NZ$600

subsidiaries

8%

Silver Fern Farms is a farmer owned cooperative with

“One of the measures that make up the overall ease Tegel ranking is timeNZ$582 of doing business and cost of starting a

a Chinese shareholder; ANZCO has two cornerstone

business. New Zealand has been the top ranked country Wilson Hellaby NZ$400

Japanese shareholders (Itoham & Nissui); and AFFCOi

in the world on this measure for the past 10 years.

Beef - 48% s owned by the Talley’s family following a decade long

Inghams

NZ$385

Actual

US$2,407

- 44% gradual takeover of Sheep a poorly performing listed firm.

“We are very proud of this achievement, along with

Forecast the transparency systems and our work to Greenlea of our online NZ$378

That said, there is US$2,186 some opportunity for further

maintain the integrity of information held on our business

consolidation among second tier beef and lamb

registers,” he says.

processors, particularly of smaller regional players each

Taylor Preston

NZ$280

NZ$240 As far Hellers as corruption goes, New Zealand is tied

with one plant. Global experience shows single plant

with Denmark for the ‘Least Corrupt’ rating given by Brinks NZ$240

operators need to be above average size to achieve

Transparency International. 0

meatpacking.info

500

1000

1500

2000

Annual turnover of key firms (2016) NZ$ ‘000,000s

economies necessary for success. 2500

New Zealand export value by segment (2015) US$ ‘000,000s

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zealand

SFF

Z$2,147

NZ$2,147

ANZCO

NZ$1,450

Alliance

NZ$1,362

AFFCO

NZ$1,200

Progressive & subsidiaries

Other 8%

NZ$600

Tegel

Sheep - 44% US$2,186

NZ$582

Wilson Hellaby

NZ$400

Inghams

NZ$385

Greenlea

NZ$378

Beef - 48% US$2,407

Taylor Preston Hellers

NZ$240

Brinks

NZ$240 500

New Zealand export value by segment (2015) US$ ‘000,000s

The New Zealand chicken industry performs well and has achieved reasonable sales and profit growth fort he past two decades. In the past decade chicken exports

She US

Forecast

NZ$280

0

2500

Actual

1000

1500

2000

2500

Annual turnover of key firms (2016) NZ$ ‘000,000s

Chilled beef exports totaled 25,799 MT worth $330 million in 2016/17. Half of New Zealand’s beef exports by volume, and

have grown from almost nothing to over$73 million in

47% by value, went to North America in 2016/17, mostly

2016, primarily through success in the Australian market,

to the United States. The broader region accounted for

mainly in the form of frozen pieces.

exports of just under 200,000 MT, worth $1.27 billion in 2016. There were declines of 13% by volume and 18% by

Where it goes

value compared to the previous year. A contributing factor was an increase of nearly 700,000 MT in US domestic beef production in 2016/17 compared to the previous

T

he industry exported to 122 countries during the year, with 17 countries taking exports worth more than $100 million. Two countries accounted for

year. New Zealand exported 182,286 MT of beef to the United States in 2016/17,26,646 MT less than the previous

exports of more than a billion dollars, the United States

year. These exports were worth $1.16 billion, $237 million

($1.59 billion), and China ($1.44 billion).

less than the previous year. The decline was in frozen

The next largest markets were some way behind, with the United Kingdom at $459 million, Japan $320 million and Germany $294 million. These top five markets accounted for 58% of total exports in 2016/17. As noted, the value of beef exports declined by $398 million, from $3.1 billion to $2.7 billion in 2016/17. Some of this decline was a result of a drop in international beef prices and exchange rate movements, with the average FOB price of New Zealand beef exports in2016/17 $6.84 per kilo compared to $7.20 the previous year. A reduction in the volume of beef exported also

beef, with exports of chilled beef steady at just over3,000 MT worth $38 million. While exports to Canada are significantly less than those to the United States, at 17,714 MT worth $106 million, it is the sixth largest and is still an important market. The volume of sheep meat exports in 2016/17 declined by 9% to 373,312 MT. However, this drop was from the high export volumes in 2015/16, and exports in 2016/17 were close to the annual average of 379,660 MT over the last decade.

contributed to the fall in export receipts. Beef export

There was a smaller drop in the value of exports, down by

volumes declined by 36,000 metric ton (MT) from a high

4% to $2.86 billion in 2016/17.

of 430,930 MT the previous year to395,164 MT in 2016/17.

New Zealand exported 65,688 MT of high value chilled

While the majority of beef exports were in frozen form,

sheep meat in 2016/17, worth $786 million. While this was

there was an increase in chilled beef, up from 6% to 7% by

a decline of 8% by volume and 9% by value, it’s share of

volume in 2016/17, and from 11% to 12% by value.

exports was largely the same as in 2015/16, at 18% of total

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New Ze


new

zealand

volume and 28% of total value. Sheep meat is the industry’s most widely exported

e s ta b li s h e d

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value in 2016/17, worth $497 million. Product type also contributes. The UK is New

product group, with the industry exporting to 100

Zealand’s major high-value market for lamb legs, which

countries in 2016/17.Exports ranged from some 132,000

can account for up to 30% of the entire value of a carcass.

MT to China, down to 232 kg to Palau. North Asia is the largest region for New Zealand’s

There was a 18% drop in exports to all major markets in the region by volume and value. Exports to the UK

sheep meat exports by volume, taking 150,991 MT, or

declined 22% to 53,772 MT, and 26% to $415 million, to

40% of total exports. The value of these exports was $814

Germany down 11% to 18,363 MT and 7% to $256 million,

million.

and to the Netherlands down 14% to 15,905 MT and 13% to

The largest market in the region is China, and it is also New Zealand’s largest individual market by volume and

$208 million. One of the factors influencing the decline in exports

value with exports of 131,989 MT worth $649 million.

to the EU in 2016/17, and in particular to the UK, was the

While the volume was down by 12% compared to the

lower value of the British pound and Euro against the New

previous year, the value of these exports increased by

Zealand dollar following the Brexit vote in June 2016. The

4% with the average FOB value up from $4.28 per kilo, to

uncertainty in the market following the Brexit vote also

$4.72 per kilo in 2016/17.

had an impact on exports during the year.

Because of the dominance of China, exports to the

There was a significant increase in both the volume

region largely mirrored what happened in that market,

and value of sheep meat exports to the Middle East in

with overall exports down 10% by volume but increasing

2016/17, with the volume up by 19% to 27,866 MT, and the

7% by value. Exports to the two next largest markets in the

value up 30% to $186 million. This increase was largely

region, Japan and Taiwan were similar to last year, 8,263

due to a recovery in exports to Saudi Arabia, which

MT and 8,111 MT respectively, but as 40% of the exports

regained its position as the major destination within the

to Japan were chilled and all exports to Taiwan frozen,

region, taking 13,242, (up 85% from 2015/16) MT worth $86

sheep meat exports to Japan were worth $78 million

million (up 100%).

compared to $52 million for Taiwan. While the volume of sheep meat exports to Europe (117,632 MT) is lower than North Asia, the EU is the highest value region for New Zealand, taking sheep meat exports

The other major market in the region is Jordan, with exports of 8,399 MT worth $57 million in 2016/17. This was a drop of 18% by volume, and 5% by value. Other significant markets for sheep meat included

of $1.17 billion in 2016/17. This was 40% of New Zealand’s

Malaysia with exports worth$86 million (up by 70%

totals sheep meat exports by value.

from the previous year), Switzerland with exports worth

This is contributed to by being the destination for the majority of New Zealand’s chilled exports, taking 63% by

meatpacking.info

$49million (down by 13%) and Fiji with exports worth $20 million (up by 21%).

November~December 2017

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new

zealand

talking to nz's best No matter how firmly entrenched a country’s product might be in an industry facet, at one point they too were the new guys. MPJ talks to Tim Ritchie, chief executive of New Zealand’s Meat Industry Association and Nick Beeby, general manager, market development, Beef + Lamb NZ, to see what the rest of us can learn from the world’s largest lamb exporting country.

When did New Zealand start exporting lamb?

agricultural sector was operating in an open market driven by global prices and customer requirements. To better manage the risks of operating in open markets, and to improve economic returns and support growth and sustainability of the industry, companies began a strategy of market and product diversification. The industry was essentially transformed from exporting frozen whole carcasses to breaking down the carcass into a wide range of chilled and frozen products and exporting different cuts to match consumer preferences in over 120 countries worldwide.

There is quite a bit of concern about the shipping miles of NZ lamb as opposed to locally produced in either the States or UK. How do you answer these critics?

Tim Ritchie: Towards the end of the 19th century, entrepreneurs recognised there was a market for meat

Nick Beeby:: In 2010, a report by AgResearch, A

in Britain, where there was a growing demand as a result

Greenhouse Gas Footprint Study for Exported New

of the significant population growth. The development

Zealand Lamb, concluded transportation is not a key

of refrigeration gave New Zealand the opportunity to

determinant of lamb’s overall greenhouse gas footprint.

meet this demand. The first shipment of frozen meat from

Oceanic shipping of product from New Zealand to the

New Zealand to Britain was aboard the Dunedin in early

United Kingdom in refrigerated containers constitutes

1882. The ship carried more than 4,000 mutton and 600

only about six percent of the total greenhouse gas

lamb carcasses. Within a fortnight of arriving in London,

footprint. and therefore transportation distance has little

the entire shipment was sold, at more than twice the

influence on the total footprint. The great proportion of

price it would have fetched in New Zealand. By 1900,

greenhouse gas emissions occur on farm and where New

New Zealand was exporting more than 3 million sheep

Zealand has efficient production systems relative to other

carcasses annually, mainly to Britain.

parts of the world.

Was there a conscious decision and plan to take on the world with NZ meat exports?

New Zealand lamb can be found in more countries than any other lamb; NZ beef, however, is not as well known. Do you see NZ beef having the same impact as lamb?

Ritchie: By the mid-1950s, red meat accounted for 30% of New Zealand’s export revenue, with the industry highly dependent on two markets; the United Kingdom for

Ritchie: New Zealand is a relatively small beef producer

sheep meat and United States for beef.

by global standards. Our point of difference is the natural

However, the open and practically tariff-free access

production system – grass-fed, hormone and antibiotic

to Britain for New Zealand sheep meat was severely

free – and high meat hygiene and food safety standards.

curtailed by Britain’s entry into the European Community

New Zealand beef also tends to be leaner than that of

in 1973. This was quickly followed by the oil shocks of the

other countries and as consumers are starting to seek out

1970s and the removal of domestic subsidies in the 1980s.

healthier meat options, it is likely that New Zealand beef

By 1990-91, all of New Zealand’s residual subsidy effects

will become more prominent as a premium product.

had effectively been removed and the New Zealand

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zealand

(L) Tim Richie of MIA and Nick Beeby of Beef + Lamb NZ

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land resource, our production is relatively static and so extracting greater value and managing market risk are important and assisted by the competitive tensions created by serving a multiplicity of markets.

Labor costs are rising everywhere, and New Zealand is far from being the exception. Do you see more robotics in processing plants?

In the recent past there has been a significant reorientation and broadening of markets served. North Asia, and in particular, China has become an important destination for both sheep meat and beef and is now New

Ritchie: Individual New Zealand meat companies have

Zealand’s single largest market.

programmes of on-going investment to upgrade and improve operational efficiency and value creation. In addition, there is an active program of investment in panindustry collaborative R&D projects to support the growth, profitability and international competitiveness of the sector, with a focus on: increasing the value of products

A problem that US lamb producers have is that each year there are fewer people in the States who have eaten lamb and demand – except at Easter – is quite low. What steps are you taking to insure you’ll have a market tomorrow?

produced; processing technology – including robotics – food safety and security, and industry sustainability.

Beeby: This starts with understanding the consumer so

While labor costs may be a consideration, the

that we can produce the type, and quality of meat and

drivers behind automation and robotics in processing

in a form which people desire. We see positive trends

plants are productivity and efficiency and to combat the

emerging in many markets from consumers who want

increasing difficulty of accessing sufficient labor. There

to have a closer connection with the meat that they are

are also benefits to product shelf life through reduced

purchasing. How the animal was raised and treated,

contamination and to employee health and safety.

what it ate and its influence on the environment are all important considerations for today’s consumers.

Which markets are you looking at for further expansion?

The New Zealand red meat industry invests significantly in animal genetics, ethical animal production and processing systems, farmer excellence, supporting

Beeby: New Zealand currently exports sheep meat

the environmental foot-print and other initiatives such as

and beef to over 120 countries around the world, and is

product development which ensures that we are meeting

continually looking for new opportunities. With a finite

the needs of our customers.

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food

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Raw pet food takes off Just like the Paleo movement became the new diet, owners are looking for something similar for their pets, with raw food drawing converts by the thousands. Will it last, however, or just be a flash in the pan? MPJ reports

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t seems to have everything going for it. With it

fresh, frozen or freeze dried, claim that it will keep pets

being GMO, gluten, and grain-free, raw pet foods

healthier, give them shinier coats, healthier skin, and

ticks off every box consumers are looking for in

more energy, and keep them free of such problems as

their pet food.

obesity and a list of canine and feline diseases. A Survey

Feed manufacturers love it as well. With growth

by Allprovide, a raw pet food company, found that 33

over the last couple of years at around 50%, its potential

percent of “health conscious” pet owners surveyed said

is massive. Suppliers, too, of raw material can only love it

they would be interested in feeding their pets a fresh, raw

as well. By selling slaughterhouse scraps and offal on to

food diet

feed manufacturers, they can easily get double the price as if selling it for human use.

“These statistics demonstrate what we’ve been hearing from pet owners across the country,” says Michael

Maria Lange, business group director for market

McVay, co-founder of Allprovide based in Georgia, USA.

research firm GfK, said at Petfood Forum 2017 that raw

“The more people learn about the risks of feeding pets

pet food sales have already grown from $117 million to

processed foods and the more they see the health

$393 million between 2012 and 2016 in the United States.

benefits of a fresh, raw food diet, the more eager they are

Proponents of raw pet food, which can be purchased

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to switch.”

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SWOT Analysis Strength Hard to argue against how ‘natural’ it is One of fastest growing markets Gives dogs/cats glossy coats Weakness Can smell horrible Takes up considerable freezer space Not something most supermarkets carry Opportunities Processors get paid much more for scraps and offal Pet food is growing throughout the world Can overcharge – people willing to pay more for pet than human food

The paleo diet for humans is driving the same for pets photo: paleo kitchen lab

new pet foods launched in 2016, up to 4.3 percent from

Threats Possible pathogen link to humans Tied to human paleo diet – when it goes will this go as well? Easily frozen and shipped from low-cost countries, destroying your market

1.8 in 2012. Dehydrated is the fourth category of raw pet food, didn’t increase is sales or product launches as much as kibble+ or freeze-dried, but still reached $35 million. Pet owners use use raw pet foods as either a complete meal in itself or a ‘topper’, such as The Honest Kitchen’s ‘Proper Toppers’. The company says its toppers are used to boost taste and add nutrition to a dog’s kibble. It is also complete and balanced so it can be served alone or as a treat.

In Melbourne, Australia, Pawleo’s take on the raw food

Safety risks

diet for dogs contains raw meat, vegetables and things like eggs and fish oil, but changes slightly each week depending on in-season ingredients. It costs as much as AU$120 (around $95) for 10 kilograms. “[Pawleo] contains a mix of any of the following human quality ingredients,” the company website reads.  “Raw

F

or any meat producer, producing raw pet food must seem like a tempting proposition. Not only can you use scraps, pieces, and parts that would

meat (such as beef, chicken, rabbit, etc), offal, cooked free

be tough to sell on to the human market, you can make

range eggs (including shell) fruit and vegetables: apple,

more money by selling to the pet food industry.

banana, bok choy, broccoli, carrots, spinach, sweet potato (cooked), zucchini, lentils, turmeric, [and] fish oil.” According to Lange, you can divide the raw pet food market into four segments: Kibble+ is conventional dry dog or cat food mixed with raw ingredients, such as chunks of freeze-dried beef. Kibble+ experienced the greatest growth and highest

But, one problem with feeding dogs and cats raw meat is the real risk of cross-contamination of harmful pathogens to the human owners. In lawsuit-hungry countries such as the USA, can your company survive a multi-million-dollar lawsuit when little Jenny gets infected with Salmonella after Rex gives her face a doggy kiss? The US Centers for Disease Control and Prevention

sales in the raw pet food segment, reaching $196 in US

(CDC) has recently come out and said while all pet foods

retail pet food sales in 2016, compared to US$49 million

have a safety risk due to contamination, raw pet foods

in 2012.

carry a higher risk. While the CDC focused on the pet

Frozen raw pet food makes up the second largest segment with $96 million in sales in 2016, up from US$40 million in 2012. Freeze-dried pet food increased in its percentage of

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food itself, research has shown that pets themselves can cause a risk to their owners when fed a raw diet. A problem with raw food is that it should be treated exactly like meat for humans, but this is not always the

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Top U.S. pet food players Nestlé -Purina Petcare A St Louis, Missouri-based subsidiary of Nestlé, producing and marketing pet food, treats, and litter. Purina focuses on high-quality mass market dog and cat foods, which claims a market market-leading one-third share of sales. Nestlé-Purina acquired Merrick Pet Care in 2015, one of the leading natural and organic pet food brands in the US. US pet food revenues – $11 billion. Walmart Walmart is a multinational retailing corporation with headquarters in Bentonville, Arkansas. Walmart’s private-label dog food brand, Ol’ Roy, is manufactured by Doane Pet Food, a Mars pet food division. US pet food revenues – $8.7 billion. PetSmart Inc, PetSmart, headquartered in Phoenix, focuses on specialty pet supplies and services. Nearly 20% of all US dog or cat owners shop at PetSmart. US pet food revenues – $7 billion. Mars Inc Mars is a food manufacturer headquartered in Virginia. Mars Petcare is the world’s leading pet nutrition and health care business. Mars Petcare boasts four billion-dollar pet product brands: Pedigree, Iams, Whiskas, and Royal Canin. US pet food revenues – $6 billion. Big Heart Big Heart, a division of J.M. Smucker, is headquartered in San Francisco. After Nestle and Mars, Big Heart rounds out the Big Three in the US mass market for pet food and treats. Used by 25% of dog owners, Milk Bone is by far the leading pet treat brand. US pet food revenues – $3.9 billion.

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Petco Petco is a privately held retailer with headquarters located in San Diego. Petco sells pet products and services, as well as some types of live animals such as fish and reptiles. In 2009, Petco introduced its smaller format neighborhood shop, Unleashed Petco. Unleashed offers services such as dog training, vaccination clinics, and grooming. Around 13% of dog or cat-owning households in the US shop at Petco. US pet product revenues: $3.7 billion. Target Headquartered in Minneapolis, Target is the second-ranked discount retailer in the US. In 2017, Target expanded its private label line of pet products with a limited time Oh Joy! Collection designed by Joy Cho. Over a quarter of Millennial age pet owners shop at Target at least once a month. US pet food revenues – $2.5 billion. Costco Costco Wholesale is a global retailer and the largest American membership-only warehouse club, with headquarters in Issaquah, Washington. Kirkland Signature is Costco’s private-label brand, which produces dog and cat food among other products. Kirkland pet foods are advertised as premium products with added health benefits for pets. US pet product revenues – $2.3 billion. Amazon Amazon.com or Amazon, the e-commerce and cloud computing behemoth, is based in Seattle, Washington. In 2016, Amazon began offering Prime Now customers in several national regions delivery services for products including pet food and supplies from local retailers. One Click Retail reports $2 billion in Amazon sales of pet products in the US. Will it do for pet foods what it's done to the book industry? Amazon’s US pet food revenues – $700 million.

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case. MPJ has seen butchers and slaughterhouses sell directly to dog breeders with no safety proviso in place. In the journal Gut Pathogens, a team of researchers led by Kim Junhyung studied the differences in the gut microbiota of domestic dogs fed a natural diet versus a diet of commercial feed, while using the Illumina MiSeq next generation sequencer. This is an integrated instrument that performs genomic DNA sequencing. According to the report, recent advances in nextgeneration sequencing technologies have enabled comprehensive analysis of the gut microbiota, which is closely linked to the health of the host. Consequently, several studies have explored the factors affecting gut microbiota composition. In recent years, increasing number of dog owners are feeding their pets a natural diet ie, one consisting of bones, raw meat (such as chicken and beef), and vegetables, instead of commercial feed. However, the effect of these diets on the microbiota of dogs is unclear. The study found that the gut microbiota of dogs is significantly influenced by diet type (natural diet and commercial feed). “Specifically, dogs fed a natural diet have more diverse and abundant microbial composition in the gut microbiota than dogs fed a commercial feed.” In addition, this study suggests that in dogs fed a natural diet, the potential risk of opportunistic infection could be higher, than in dogs fed a commercial feed. The type of diet might therefore play a key role in animal health by affecting the gut microbiota. In other words, if you feed your dog a raw food diet, it will have a larger population of microorganisms – including pathogens. Other studies have shown an increase in Salmonella, Campylobacter, listeria, and other pathogens – all transmittable to humans – from dogs and cats fed raw food.

Besides pork and boar, Smoky Mountain Recipe includes dried seaweed, cranberries, spinach and blueberries. Photo: Elevate

Back in 2012, the American Veterinary Medical Association passed a resolution discouraging feeding pets raw food diets because of the risks to their owners.

low water content,” says Marraud. “As for raw juice, HPP is used as a key preservative

But says James Marsden, PhD, professor of food safety

technology to inactivate bacteria inside raw meat by

and security at Kansas State University says this advice

pressure and not heat, thus preserving their raw claims

is outdated. The technology to kill pathogens, including

while improving safety without preservatives.”

high pressure processing and slow pasteurization, has

According to Marraud, many pet food companies

improved dramatically since then. “If it’s done right, they’re

have entered into this market in the last decade, yet

very, very safe,” he says. “The industry leaders are taking

many of them are facing safety issues as they do not

measures to control contamination. If they weren’t, they

use preservative techniques because of their raw status.

would have contamination in every lot.”

This is the reason why brands such as Stella & Chewy’s,

The take on using high pressure processing (HPP) is something that Jorge Marraud, food technologist with Spanish company Hiperbaric agrees with. “Raw is the main trend when it comes to detox juices,

Stewart, Primal Pet Foods, Nature’s Variety, or Chow are now using HPP. “The sector hit a new milestone with the installation of the world’s first HPP system dedicated exclusively to

but also for pet food. While going raw has benefits, it also

pet food. Hiperbaric has been granted with such honor

has significant risks. Indeed, listeria and recalls are not

by two of its newest customers, who recently purchased

scarce in raw pet foods as no heat is applied to pasteurize

and installed a Hiperbaric HPP system to control harmful

the product, with the only bacterial control being normally

bacteria and protect their furry customers,” he says.

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deer

It’s deer season Free range, high in protein, low in fat, and hormone free – what’s not to love? Just don’t mention the ‘B’ word. Editor Velo Mitrovich reports

up around seven percent of total meat eaten – the same as horse. On the other-hand, those who eat venison have the spending power to make deer a very profitable commodity.

Farms grow in US by velo mitrovich

I

n the USA, most states forbid the selling of game

I

meat obtained through hunting, due to the meat not

t’s impossible to say that venison is new. Mankind has been hunting members of the deer family for

being inspected by the US Department of Agriculture.

This means that in the USA, all venison from any member

as long as we’ve stood on two legs; the Chinese

of the deer family comes from stateside farms – about 20

have been farming it for over 5,000 years. Before

percent – or is imported, mainly from New Zealand.

humans tucked into the first beef steak or chicken,

we were wiping deer fat off our faces. That said, there is a renaissance taking place with

venison. Worldwide, upscale supermarkets now offer cuts of venison and fine restaurants in Europe, North America,

That said, according to the North American Deer Farming Association, “Deer farming is one of the fastest growing industries in rural America, and it is a great alternative agricultural pursuit for families.” Arby's gained some attention in October 2016 when

Asia, and Australia/New Zealand all sell it. US roast beef

word leaked through social media that they were about

sandwich chain Arby’s even came out with a limited

to test a venison sandwich. Arby's later confirmed

venison sandwich in 2016. Supermarkets in the UK have

the offering, selecting 17 stores in Georgia, Michigan,

reported an increase demand this year of 29 percent.

Minnesota, Pennsylvania, Tennessee, and Wisconsin (all

Suppliers all say the same thing: it’s hard to near-

major deer hunting states) to offer it during a four-day

impossible to keep up with demand and it’s easy to see

test during those states' respective hunting seasons. The

why. Free-range venison is one – if not the healthiest – of

sandwiches, made from five ounces of farm-raised New

all meats to eat. High in protein, low in fat – it has less fat

Zealand red tail deer, marinated with garlic, salt, and

than skinless chicken breast – hormone-free, it would

pepper, cooked in sous-vide and served on a toasted

seem venison has everything going for it.

roll with fried onions and a Cabernet steak sauce infused

Almost.

with juniper, sold for $5.00. Those few food bloggers who

Thanks to a Disney cartoon released 75-years ago,

were fortunate enough to try one, seemed to give it high

deer are always associated with cute Bambi. It’s a

marks. However, the New York Post said the new “Bambi

guarantee that any media or animal rights criticism of the

burger is disgusting”. Due to curiosity and heavy demand,

industry will always work ‘Bambi’ into the headline.

the sandwiches sold out in all markets on the first day of

With production, New Zealand is the world leader in farmed deer, while the UK supplies its venison through

the test. Before you get visions of opening a venison sandwich

culls of wild populations and farmed as well. Germany,

chain, it needs to be said that Arby’s allocated only 500

the world’s leader in venison consumption, gets most of

venison sandwiches at each test store to satisfy the long

its deer from New Zealand, as does the USA. Although,

lines that formed. During the same month, Arby’s sold 29

each year you see more deer farms starting up in both the

million sliders at its roughly 3,300 restaurants. Would a

States and Germany.

much larger supply have also sold out? It’s anyone guess.

On one-hand it would be easy to discount venison. It remains a drop in the bucket of world protein, making

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Regardless, compared to traditional livestock, the deer industry is “booming”, says the Association. It generates

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$3 billion for the US economy and supports tens of thousands of jobs in communities across the country. A Texas A&M study reports deer farming is one of the

SWOT Analysis

fastest growing industries in rural America. Indeed, the US farmed deer market is growing at a rate of 20 to 30 percent annually. Many of these farms are small, such as LedgEnd Farm in Vermont. There, a herd of around 400 fallow deer are raised on 254 acres, with

Strength Seen as all natural, hormone free Low fat Adds class to restaurant menus

around 120-125 head slaughtered and sold every year. Ninety-nine percent of LedgEnd Farm’s venison stays in Vermont, divided 50/50 between restaurant and private sales. Hank Dimuzio, farmer and founder of LedgEnd Farm,

Weakness Most unsure how to cook deer Wild deer needs professional hunters Hard to keep up with demand

is not the typical farmer, choosing to farm in addition to his career as an emergency room physician. Dimuzio and his wife, Rhonda, decided to farm deer because he needed a type of farming that would be compatible with his lifestyle. “Deer are, in essence, a very low care animal,” Dimuzio told Modern Farmer. Primarily browsers and

Opportunities In many parts of the world, culls need to take place Seen as relatively easy to farm Decent profit margins

partial grazers, these fallow deer are raised for venison, and also provide a renewable crop of antler velvet, the soft skin on growing antlers popular in Asian markets and thought to provide medicinal properties. However, before putting deer in your lower 40 acres, be aware that there are some definite hurdles

Threats Public opinion sees deer as Bambi If demand can’t be met; customers won’t look for it New Zealand has cornered the market

to overcome. Because of the pest factor of deer to neighboring farms and forests, some states or counties

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deer

Giving customers the best British game dealer Ben Rigby Game sets the standard in premium game meat, with demand for its venison consistently exceeding supply When you visit a processing plant that specializes in wild game, there are many things you expect. Various species of deer hanging from hooks, boxes of game birds, rabbets – but what you don’t expect is to see the founder of the 38-year-old company wielding a knife on the processing floor. But, that’s the quality control Ben Rigby exercises, and that’s why Ben Rigby Game is the UK’s largest supplier of game. According to Paul Scott, marketing and sales manager at Ben Rigby Game, the company is a “one-stop shop” for wholesale customers. “No one in Britain processes the amount of venison that we do,” he says. “But, because most customers want more than just venison, we supply them with small game as well. This includes rabbits and hares, along with birds like partridge, pheasant, grouse, pigeon, and wild duck. “Although we move about 20,000 head of small game a year, it’s more of a side business. Unless you do massive numbers of small game, there is no money in it which is why three game companies have gone out of business last year. Top quality venison is what we’re known for,” he says. The majority of deer that Ben Rigby Game gets is taken from UK’s Forestry Commission land. Right now the company has contracts for all of England’s Forestry Commission allotments and this year they’ll be taking on the Forrest of Dean in Wales which will supply them with deer and what should be around 44 metric tons (MT) of wild boar a year. This, however, isn’t enough for demand and this is supplemented with deer that comes from private lands/estates and deer farms. Tenders – bids – are placed on Forestry Commission land. If the bid is won, it lasts for three years and requires the winning company to take all deer culled. The deer are shot by professional licensed hunters – deer stalkers

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– who kill the deer with either heart or lung shots only. No head shots are allowed. The hunters take off the heads and hoofs, and the meat is inspected. It’s kept in a Forestry Commission chiller until Ben Rigby Game picks it up. The company has just bought a new truck with a sleeper compartment and it pulls a large chilled trailer. During the main season, the truck does a large circuit with the goal of getting the meat back to Ben Rigby Game within three days. “When you put in a tender and it’s accepted, it means you have to take all the venison. Most deer – red, sika, fallow, and roe – have a season but muntjac deer came be taken year around – a few escape from an estate in the early 1900s and now their population is out of control.” Muntjac deer are one of the smaller species of deer, with a weight of around 18kg and are about the size of a golden retriever. During the slow season, deer stalkers can still hunt muntjac or might have to make a kill on an out of season deer if the deer needs to be taken down for various reasons, most involving the animal becoming a nuisance or a public danger. “We can lose money driving out across England just to pick up one deer carcass,” says Scott. “It’s a real pain.” Back at the plant, located in Maldon, Essex (southeast England), a Food Standards Agency inspector is on hand every day to check the deer. Ben Rigby Game sees no advantage in aging venison and the deer is not aged beyond the time it is shot and brought to the processing center for butchering. According to Scott, those with an educated palate can tell the difference in taste between the deer species and indeed, in Europe customers look for a specific type of deer. However, in the UK where the company sells the majority of its venison, while the whole seller knows what type of deer the venison comes from, this information is not passed onto the consumer – there is no demand for it. In the past, due to the transport time and/or being transported in non-chilled vehicles, the deer could be left with a ‘gamey’ flavor. “For some people this was their first taste of venison and this strong gamey flavor put them off from trying it again. Although this is not

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a problem now, people can shy away from venison,” says Scott. The season begins for some species on 1 August and Ben Rigby Game processes anywhere from 50 to 100 deer a day during this time. The main deer season starts in earnest on 1 November and lasts until the end of March. During this period the company will processes between 150 to 250 carcasses a day, seven days a week. Due to the difference in size of deer, it’s difficult to come up with an exact tonnage the plant processes. The company has 20 core staff year around and brings in another 20 to 25 additional staff during the main deer season. “While the demand for different types of meat differs throughout the year, we supply venison and game of some sort throughout the entire year,” says Scott. “Demand and volume has gone up and we have a lot more customers. Part of this is due to the weak pound against the strong euro; we’re exporting more thanks to the exchange rate. We have a big contract in Scandinavia and we sell to Germany as well.” Ben Rigby Game does no secondary processing nor any value-added products. All products are handled by meat sellers who deal directly with the supermarkets and restaurants. Scott says an advantage of this is the Ben Rigby Game gets paid straight away, instead of having to wait anywhere from 30 to 90 days. After the deer is received, it’s trimmed into major pieces and goes through a metal detector. The area around where the animal was shot is cut out for pet food. According to Scott this is becoming a massive industry and there is a huge potential for them to supple the raw pet food industry. “All our C-grade trim goes to pet food. One pet food guy was so desperate for venison that he bought B-grade trim. All want human quality,” says Scott. Although birds are killed with shotguns – which means there can be multiple pieces of shot in each bird – the meat does not pass through a metal detector or x-ray machine. Each label comes with the disclaimer: May contain shot. “That’s the reality of game, it’s been shot with a gun,” says Scott. Throughout the processing line almost everything is done by hand. There is a Kolbe

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band saw for big cuts of venison and bird feathers are removed by machines which look like large grinding wheels, but outside of that it’s a team wielding sharp knives that turns it into a premium product. At the far end of one of the processing tables works Ben Rigby who oversees the entire operation and offers the final inspection. “Game is an expensive meat,” says Scott, “and our customers deserve the best. With Ben on the line, nothing we have sent out as ever been returned.” Only sharp knives and a bandsaw are used for deer Photos: MPJ

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Ben Rigby of Ben Rigby Game works the line every day photo: Mpj

require the entire pasture area to be fenced with barriers

What there is complete agreement with all UK

eight-feet-high. In addition, there are very few abattoirs

government agencies, NGOs, and academics is that deer

with USDA inspectors that can process deer in North

are more abundant and widespread now than at any time

America. Other countries have similiar issues.

in the past 1,000 years. Six species of deer exist in the wild in the UK: Red and

UK's millions

roe deer are considered the only native species, though fallow deer are normally considered as native having been introduced in the 11th century. Sika, muntjac, and

I

n 2011, a YouTube clip went viral as it showed an angry

Chinese water deer were introduced within the past

older man trying to call back his dog Fenton, which

150 years and these became “wild” after escaping from

was chasing a large herd of Red deer in London’s

wealthy estates.

Richmond Park. While it’s impossible to watch the clip

Currently cull percentages are 20 to 30% of the

without laughing; it’s also impossible to watch it without

deer population. Research published four years ago

thinking: that’s a lot of deer.

in the Journal of Wildlife Management stated that the

Thanks to driving to extinction all major deer predators

percentage that should be culled should be at least 50 to

– except the car – even with yearly culling there are an

60 percent to curb the damage to woodlands and parks

estimated 1.5 million to 2 million wild deer in Britain. In

by deer.

talking with a member of the Woodland Trust – the UK’s

Game companies, such as Ben Rigby Game (see

leading woodland conservation charity – he says the

following article), put bids on Forestry Commission

official figure of 2 million is low and suspects 2.5 million

woodlands for three-year periods, agreeing to buy all

to 3 million might be more accurate due to the secretive

deer professional hunters kill. After killing, the hunter

nature of the animals which makes getting a count near

inspects, guts, cuts off the hoofs and head of the deer,

impossible.

and chills the meat. Other sources of deer are from

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private lands and deer farms. According to the British Deer Farms and Parks Association, Brits are consuming 4,500 metric tons (MT) of deer a year, with about 2,000 MT of this total being imported. To meet project demands, either local production or imports, will need to increase by at least

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1,000 MT. Unless British farms expand production – they only produce about two percent of the total tonnage – culling and imports will stay the main sources of raw material for the foreseeable future.. Market analysts Kantar reported a 413 percent increase in venison sales in 2014. While that year was a fluke, it’s fair to say the British have developed a taste for venison.

World leading Kiwis

For ultimate brand protection, regulatory compliance, and an improved bottom line.

L

ike sheep, nobody does deer like New Zealand. The large scale commercial farming of deer started in New Zealand, and the country remains

the world's largest and most advanced deer farming industry, according to Deer Industry New Zealand (DINZ). Deer are not native to New Zealand and were brought to New Zealand from England and Scotland for sport in the mid-late 19th century. The environment proved ideal and wild populations grew uncontrolled. By the middle of the 20th century wild deer were regarded as a pest because of their impact on the environment and native forests. The export of venison from wild deer started in the 1960s, turning a pest into an export earner. Industry pioneers saw an opportunity to build on this base and in the early 1970s started capturing live deer from the wild and farming them. A new industry was born and rapidly spread throughout New Zealand. Second generation deer products were born as industry pioneers seized an opportunity to build on this beginning and the first deer farming license was issued in

Eliminate dense physical contaminants and ensure weight range compliance, and product and package integrity.

1970. This business was based on capturing live deer from the wild and farming them for well-established markets for venison in Europe. Scientific knowledge, expertise and genetics from Europe and North America were used to develop farmed animals, and markets grew profitably along with the usual growing pains particularly in the early part of the new millennium. Since 2006, prices and markets have been relatively stable and the deer industry has acted in a wellcoordinated way, industry marketing campaigns have

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had a positive impact and marketers have cultivated new customers and therefore demand.

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As a result, the New Zealand deer industry is moving towards a third generation of deer products. The industry

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recognizes there is commercial opportunity to more

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sustainably supply peak market demand in venison

www.mt.com/pi meatpacking.info


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deer

markets, meet unmet demand in existing markets, and to support marketers’ aspirations to grow new markets particularly in North Asia.

MARKET challenges

Antler velvet and deer co-products (tails, pizzles and sinews) are critical in this third generation. Velvet and deer co-products have been prized in traditional oriental medicine for over two millennia in North Asian markets (South Korea, Taiwan and China). The New Zealand velvet industry is expanding from being a supplier of base raw materials to an ingredients’ supplier to large consumer brands in Asia.. According to DINZ, New Zealand venison marketing companies can deliver premium quality venison 12 months of the year. However, because a natural pasture based farming system is used in New Zealand there are peaks and troughs in the supply of chilled venison due to the annual production cycle. Supply is highest through the New Zealand summer and fall – October to March, and lowest in the New Zealand winter months April through to August. Farmers can grow young deer quickly on fresh spring and summer pastures, but need to use stored feed during the winter, so most farmers will aim to grow their young deer to desired weights before winter. Nearly all deer bred for venison production in New Zealand are processed before the animals are two years of age. New Zealand processing facilities operate year around and prepared for export around 13,000 MT annually. Germany takes 24 percent of New Zealand’s

1. New Zealand is the world leader in production. Competition in either your domestic or foreign markets will pit you against New Zealand deer companies who can offer consistent supply. 2. Especially for those who depend on culled free-range deer for raw material, there is a lack of consistency in size and weight. All butchering needs to be done by hand, which can drive up production costs. 3. The extreme lean nature of venison requires more time and care in cooking. Value-added venison products, in which the consumer only has to put the entire package in the oven, might be the way to go. 4. Venison quickly becomes popular after a TV cooking show, but then soon becomes forgotten. For your product to succeed, you need to find ways to keep interest high throughout the year with market development activities. 5. Beef, chicken, and pork can always beat you on costs. Give consumers a reason to pay more for venison.

venison; the USA 20 percent, the UK nine percent, with others making up the rest.

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Meat Packing Journal


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Rotisserie chicken lays the golden egg There are few places in the world where you cannot find rotisserie chicken – Antarctica springs to mind. But few countries have pushed it to such a fine marketing art as the States. Editor Velo Mitrovich reports from California

“Rotisserie chicken has become very popular in the United States in the last 25 years precisely because it has made it so easy to pick up a fresh, tasty, affordable and convenient main dish on the way home from work,” Tom Super of the US National Chicken Council tells MPJ. “They are by far the number one seller in the deli chicken category at supermarkets, with an annual value of about $1.7 billion, according to Nielsen. That’s almost double fried chicken.

by velo mitrovich

“We expect the number of rotisserie chickens sold this year to approach 900 million to 1 billion, or almost 10% of

Y

total production; that’s 700 million at retail and 200 million

Rotisserie chicken has become so common in

and local delis like they still are in France and other parts

supermarkets everywhere that its hard remembering

of Europe. But customers were reluctant to pay $2.00+ for

when it wasn’t the case.

a cooked bird when they could by the same size chicken

ou’re at a Vons supermarket in San Diego.

at food service. I expect the market to continue to grow

As a family leaves the checkout counter

in step with overall production increases in the number

and starts heading to the door, one of

of birds. The big growth is over, but some growth will

the teenagers opens the package that a

continue especially if the price point stays around $5-7.”

rotisserie chicken is in, puts her nose over it

and exclaims: “That chicken smells soooo good!”

Back in the early 1990s, people were standing in line for rotisserie chicken being served up by fast food

As Super points out, rotisserie chicken was relatively big in the 1950s-60s, usually sold by Mom & Pop stores

raw for less than half the price and cook it themselves. Now, however, many supermarkets are content to sell

and casual restaurant chains. Boston Chicken – which

rotisserie chicken as a loss-leader and it is cheaper for

started the craze – KFC, El Pollo Loco, and Kenny Rogers

consumers to buy a fully cooked and seasoned bird over

Roasters were all feeding the masses with chicken

a raw one.

cooked on a spit.

COSTCO SETS PACE

In July 1994, based on research from the US National Restaurant Association, the LA Times ran an article on restaurant rotisserie chicken entitled: ‘Springing Up Everywhere’. It might have sprung up, but it sprung right back down. KFC listened to its rebelling franchise owners and quickly pulled it – so much for the healthy alternative. Boston Chicken renamed itself Boston Market and now offers meatloaf and many other dishes – besides

A

ccording to The Wall Street Journal, last year Americans bought 625 million rotisserie chickens at supermarkets; Costco alone sold 87

million, an increase of over 35 million from what it was selling in 2010. Costco has sold rotisserie chickens for $4.99 since

rotisserie chicken – El Pollo Loco ads seem to be pushing

2009, with most of them a hefty three pounds cooked –

shrimp, and Kenny Rogers Roasters knew when to run. It

rivals are about half that weight. When a bird flu outbreak

shut down their entire US operation and moved to Asia.

prompted higher prices for ready-to-cook chickens in

But, while rotisserie chicken was disappearing off Main Street, it started going from strength to strength in supermarkets around the world.

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November~December 2017

2015, Costco took a $30 million to $40 million profit hit to keep its rotisserie prices steady. The chain also has bought bigger, more-efficient ovens

Meat Packing Journal


whole

Marel Stork's Atlas system for tranporting birds gives them as much space as possible

chicken

pac k ag i n g

that the plant will process more than 2 million chickens a week, or more than 100 million a year. It will handle about a third of the raw and rotisserie chicken sold at Costco stores nationwide.

and saved millions of dollars by packing the chickens in

MAREL SYSTEMS

containers that use less plastic. Now Costco is building its own $400 million chicken-processing plant in Nebraska – Lincoln Premium Poultry – which should make it cheaper for Costco than buying ready-to-cook chickens from suppliers. Along with the processing plant, the 414-acre site will also contain a chicken hatchery and feed mill. Most retailers do not process their own fresh meat,

C

ostco has chosen Marel to equip the state-of-art greenfield plant. This order marks the largest single order to date for Marel as a whole. Marel

Poultry will deliver the systems by the end of 2018.

instead buying it under arrangement with plants that

Three complete slaughter lines will be supplied for

might also serve other customers. But it makes sense

the plant, from live bird reception up to chilling. Each line

for Costco to have more control over its own supply,

will make use of Marel’s latest live bird reception system,

said Jonathan Luz, director of strategic planning and

Atlas. From there, the plant will run complete Stork CAS

infrastructure development for Costco.

stunning, kill and evisceration systems, all incorporating

The goal is to produce two million chickens a week (25,200 bph). The new Lincoln Premium Poultry facility will

the latest technology, up to chilling. According to Marel, the installation of the Stork Atlas

process birds of 2.7 kg (6.0 lbs) average live weight. The

system marks an important milestone. Marel Poultry

focus will be on producing the highest quality A-grade

developed this system particularly, paying particularly

products for the Costco rotisserie program, while also

close attention to animal welfare and sustainability. Lifting

supplying bagged deli whole birds and thermoformed

efficiency standards was an important priority, too, which

saddle packed parts for wholesale grocery chains. The

Costco appreciated.

processing plant will handle about a third of the raw and rotisserie chicken sold at Costco stores nationwide. The giant’s poultry processing company will have

Marel says it has found the best way of giving birds as much space as possible, while continuing to transport them efficiently. Thanks to the design of the SmartStack

around a $1.2 billion annual economic impact to the

transportation module, featuring a bottom tray-pallet,

greater Fremont, Nebraska, area and will generate about

loading capacity can increase up to 38%, which means

800 new jobs at the plant itself, while supporting farmers

fewer truck movements and lower CO2 emission. At the

and small businesses that serve the plant, according to

same time, the industry’s largest headroom is available

The Omaha World Herald.

per bird, animal stress is minimized and hygiene is up.

This plant is the first live animal processing facility for Costco, which is based near Seattle. Officials estimate

meatpacking.info

For chilling, Marel Poultry will install three shock/ maturation air chill systems, complete with automatic

November~December 2017

65


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Caption: Walt Shafer, project leader for Lincoln Premium Poultry and Larry Campbell, VP of sales for Marel Poultry, shake hands on the single order to date for Marel. Also pictured, Ray Collison, Matt Brass, and Scott Thompson.

transfer into the system from evisceration and out

price of the bird, they make up for it plus a lot more as the

of the system to the distribution line. Post chilling,

customer walks back to the till buying other things to go

Marel will supply two distribution lines complete with

with their chicken dinner.

SmartWeigher and IRISvision grading so that Costco can

“If they get a chicken, a salad, and maybe they pick

make well-founded decisions about downstream product

up a bottle of wine — now we’re really talking,” Don

allocation for its chain.

Fitzgerald, vice president of merchandising at Mariano’s, a

After whole bird selection, all remaining products will be cut up on four Marel Poultry cut-up lines. Deboning

grocery chain in Chicago told the WSJ. Grocery store executives want to keep the purchase

will be done using five of the newest Stork AMF-i cap

price between $5 and $7 per chicken, and are doing this

deboners and two in-line thigh fillet systems. Deboned

by “working to trim supply-chain costs, cook chickens

parts will pass through one of five Marel SensorX

more efficiently, and throw fewer of them away unsold,”

machines for bone detection.

WSJ reports.

Operating at the very highest level of automation, a

In the UK, Tesco sells raw British 3 lb chicken for £3.00

combination of Marel robots and multihead weighers

($4.14); skinless, boneless chicken breasts are £4.00 ($5.51)

will present cut portions automatically for thermoform

for a pack weighing 1.3 lb. A rotisserie chicken, weighing

packing. Metal detectors will check and full specification

around 2 lb costs about the same as the slightly larger

Marel weigh price labeling lines process and box each

raw bird.

pack in cartons. Deli and rotisserie products will also be handled in the same way on Marel equipment.

In San Diego’s Vons, a 2 lb raw whole chicken costs around $11.00; with chicken breasts costing $4.99 lb, with the average pack costing $9.50. A rotisserie chicken at

SELL-BY SAVINGS

Vons, weighing 1.9 lb costs $7.99. Buying a prepackaged salad and frozen corn in a microwave cooking bag to go with the bird and dinner

F

or all stores, by selling rotisserie chicken it gives

could be on the table in five minutes top – cooking time

supermarkets a way of using up whole birds that

for a raw chicken of similar size would be about an hour.

are approaching their sell-by-date (due to its

By giving stores a way of using up chicken

massive volume, Costco doesn’t need to do this). The

approaching sell-by-date – instead of having to discard –

rotisserie chickens are almost always put at the back of

luring customers in with a perceived bargain, supermarket

the stores; so what if the stores take a small hit on the

rotisserie chicken will only grow in strength.

66

November~December 2017

Meat Packing Journal


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Our continued commitment to innovation in fresh meat packaging has seen the successful launch of the new Secondary Seal (SSL™) high barrier shrink bag and film technology. SSL™ uses special sealant polymer grades to allow the inner layers of the material to fuse together through the normal production processes of vacuum packing and hot water shrinkage. SSL™ is well-suited for automated packing, particularly Flovac and Form Shrink automated Shrink Bag Replacement (SBR ™) applications. Combining SSL™ with SBR ™ will provide a ‘step change’ in pack presentation whilst driving down real pack costs.

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whole

chicken

Whole bird packaging unit reduces labor costs

S

ealed Air wowed the crowd at this year’s IPPE demonstrating a new, integrated equipment and material solution for whole bird packaging. The Sealed Air display featured an operational, fully-automated

whole bird line, enhanced by an online cost calculator to help demonstrate this system’s rapid return on investment for poultry processors. Larry Churchwell, North American marketing director for Sealed Air, tells MPJ that in today’s food processing environment, workforce instability creates annual employee turnover rates consistently above 70 percent, resulting in a significant loss of time, money and resources. In fact, according to an industry report, labor accounts for approximately 60 percent of the total cost in a food processing plant. As the market demand and price for roasters and broilers fluctuate, it will be increasingly difficult for processors to maintain efficiency and protect their margins. Further, the production disruption and lack of skilled workers put food quality and food safety at risk,

OvenEase bags means the consumer does not touch the raw product

impacting all players along the food supply chain. Cryovac Whole Bird Automation Systems help processors balance the need for packaging that meets

Cryovac, thanks to its hock breaking system, produces a

consumer expectations for shelf-appeal and food safety

much more uniform-looking product. Instead of having

with the need to also package birds efficiently and cost-

one leg jutting out which, while perfectly sealed, tends to

effectively.

be rejected by consumers, both legs look the same and

“We understand that challenges in operational efficiency can lead to increased waste and impact our

are neatly sealed. As for meeting the needs of consumers, Churchwell

customers’ ability to be profitable,” says Churchwell, “By

said, “Having a leak-proof package for poultry is crucial

helping our customers automate the most physically

at the point of sale and for controlling purge, because

demanding aspects of their processes, we can help them

consumers see it as a food safety issue. Additionally, our

get more functional hours out of their production shifts

easy-open ‘Grip and Tear’ technology eliminates the need

while improving product quality and food safety.”

for scissors or knives which further increases safety and

Cryovac Whole Bird Automation Systems automate the most labor-intensive tasks of packaging whole

reduces contamination.” What MPJ liked about the Grip and Tear bags is that for

poultry such as hock breaking, bag loading, and vacuum

older consumers who could struggle with normal vacuum

sealing. System components include the Cryovac HBX

bags, opening a Grip and Tear bag is a breeze.

Series Hockbreaker, the Cryovac BL220 Automatic Bag Loader, the Cryovac 8600E Series Rotary Chamber Vacuum System and the Cryovac ST101 Shrink Tunnel.

“Butterball is using it almost across all of their range,” says Churchwell. Another big seller for Sealed Air is its OvenEase bags

By integrating these four pieces of equipment with a

which allow a bird to go directly into the oven without a

proprietary shackle line and conveyor system, Cryovac

consumer – or their kitchen – coming in contact with it

Whole Bird Automation Systems allow one operator to

until its cooked.

package an average of 45 birds per minute. In the demonstration, it was easy to see how the

68

November~December 2017

For more of Larry Churchwell’s views on the current labor situation, be sure to read this issue’s IPPE review.

Meat Packing Journal


Rfresh Elite ®

The unique, market leading super-lightweight tray for ultimate sealability

Benefits for Packer / Processors Lower cost packing • • • • •

Reduced sealing dwell time 20°C reduction in sealing temperature Reduced risk of tray distortion due to lower sealing temperature 10% increase in output Super lightweight trays - up to 25% below comparable packs

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Improved sealing through contamination 24% increase in seal strength Less retailer returns Improved visual inspection pre and post seal Less rework in pack house

Benefits for Retailers Fresh crystal clear presentation •

25% increase in clarity

Maximum retailing performance • • • • •

High barrier pack for extended shelf life Less leaking packs Reduced returns and mark Pack opening options for consumer satisfaction i.e. lock & peel Better for the environment

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60% increase in seal strength Less retailer returns Improved visual inspection pre and post seal Less rework in pack house

For further information about Rfresh Elite or any other FCP solutions please contact : Klöckner Pentaplast Food & Consumer Products, Wakefield Road, Featherstone, West Yorkshire, WF7 5DE | kpfilms.com | info@linpac.com | +44 (0) 1977 692 111


pac k ag i n g

whole

chicken

Skin packaging for whole birds

T

he shelf life of poultry can be increased significantly through skin packaging,

Whole birds can continue to marinate inside a Sealpac TraySkin package

according to Sealpac. Whether chicken, turkey, duck or goose – today’s kitchen not only values poultry meat for its versatile

products can also benefit from better taste due to this

flavours, but also because it provides important protein

type of packaging. The meat juice, an important flavour

and contains less fat and fewer calories than other meats.

carrier, is retained when packaged under vacuum, as the

This is why poultry has become extremely appreciated by

tight-fitting skin film prevents drip-loss.

consumers, as can be seen from its ever-growing share in the global meat consumption in recent years. While consumers want chicken, they also want to be

With Sealpac’s TraySkin, poultry products are hermetically sealed inside a pre-formed tray with a highly transparent barrier film that fits the contours of the

able to buy raw chicken at the market which is safe for

product like a second skin, which provides stability to

their families. The use of high-quality vacuum packaging

the product. In case of marinated products, the product

technology, gas-impermeable films and trays – and thus

is able to fully develop its flavour. The TraySkin system

the exclusion of oxygen – inhibit aerobic microorganisms

is suitable for a wide range of products, such as whole

that impair the preservation of food. In addition, poultry

chicken, chicken breast, and thighs.

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November~December 2017

Meat Packing Journal


pac k ag i n g

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chicken

Dutch plant invests in end of line

A

leading Dutch poultry producer has just

in-line system, where any unplanned stoppages can have

installed three Ishida Flex Graders –

serious consequences.

supported by Ishida’s Sentinel remote monitoring system. Van Miert slaughters and cuts up birds

“We are very pleased with the performance of the Flex Graders,” says Van Miert’s Engineering Manager Arno Streng. “They are easy to set-up and adjust during

for onward supply for further processing. Two Flex

production, and this has freed up operators’ time, allowing

Graders at the company’s factory in Breukelen and one

us to carry out further product quality checks.”

at its Hunsel facility are weighing and grading breast caps

The Flex Graders are in operation for nine hours per

into 14.5 kg crates, handling up to 135 products every

day, five days a week. They are currently running at

minute for European supermarkets..

around 70% of their top speed, offering opportunities for

The breast caps are packed in various weight ranges, from any weight below 300g up to 850g to 999g. The

further increases to throughput if required. As part of its stringent hygiene standards, Van Miert

accuracy of the Ishida Flex Graders ensures that products

carries out a thorough five hour clean of the entire cut up

are consistently graded and sorted into the appropriate

area at the end of each shift. The easy-to-clean design of

category, says Van Miert.

the Flex Grader supports this with a rugged, open frame

This enables the poultry producer to maximize yields and the value of each production run. Double weights

construction and no need for parts to be dismantled. Ishida Sentinel provides valuable remote monitoring of

(which can occur if two breast caps arrive on the weigh

the line to deliver detailed reports of production numbers

belt at the same time) have also been minimized and the

and overall weights, along with information on any activity

Flex Graders are operating at around 99.3% efficiency.

during the shift such as adjustments or changes to weight

A further benefit for Van Miert is the more compact

requirements made by operators. This allows Van Miert

dimensions of the Flex Grader which have provided

to instantly assess overall line performance and make

valuable space savings in both factories. In addition, the

any necessary enhancements to maintain maximum

reliability of the Flex Graders is another vital factor for an

efficiency, says Streng.

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November~December 2017

Meat Packing Journal


The art of Meyn deboning Meyn is at the forefront of deboning technology with machines like the Rapid Plus breast deboner M4.0 (6,000 front-halves/breast caps p/h), the TDS thigh deboning solution M1.0 (7,200 thighs p/h) and the WLD whole leg deboner M3.0 (4,200 legs p/h). Contact us for more information how to grow your business with the world’s leader in efficient poultry processing solutions.

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Profile for Reby Media

Meat Packing Journal, Mar-Apr 2018, iss 2 vol 5  

Global data and analysis for the meat processing and export industry

Meat Packing Journal, Mar-Apr 2018, iss 2 vol 5  

Global data and analysis for the meat processing and export industry