Ruling the roost: Poultry is poised to become the world’s most consumed protein.

This 2015 projection of protein production published by The Wall Street Journal has been upended by the spread of African swine flu; poultry will overtake pork this year instead.

In the United States it seems hardly news that poultry is the most-consumed protein. In recent years poultry consumption in America has grown while beef consumption has stagnated, weighed down by high prices at the consumer level.

At the same time, the National Pork Board committed an unforced error earlier in this decade when it abandoned its longstanding (and doubtless highly effective) tagline “The Other White Meat” in favor of the mealy-mouthed platitude “Pork: Be inspired” – a slogan that convinces no one of anything.

Persistent reports from the medical community that red meat is less healthy than consuming poultry and fish products haven’t helped, either.

But poultry’s prominence in the American market hasn’t necessarily extended to many parts of the rest of the world. But that’s now changing.

In fact, according to reporting from a recently-concluded International Poultry Council meeting in the Netherlands, poultry is poised to become the most consumed meat protein in 2019.

The precipitating factor is African swine fever, which is now affecting pig herds in 15 countries on three continents. Pork production losses this year are expected to represent ~14% of the world’s pork supply – and that’s just the minimum forecast; the losses could go higher.

Interestingly, African swine fever’s most significant initial outbreaks were in Russia and Eastern Europe, but now East Asia is being affected most significantly. The first cases were found in China beginning in August 2018 but now have spread rapidly throughout the country.  For a country that is responsible for nearly half of the world’s supply of pigs, that’s a very big deal.

The swine fever is spreading to the nearby country of Viet Nam as well – which is the world’s fifth largest producer of pork.

The problem for pig growers is that African swine fever is the quintessential death sentence: The disease has a 100% mortality rate, and no vaccine has been developed to guard against its spread.

According to global food and agriculture financing firm Rabobank, China is expected to experience a ~30% drop in pork supplies this year, which in turn will mean a decline in total world protein supplies. The twin results of these development:  an increase in prices for all proteins … and poultry will overtake pork this year as the world’s most consumed protein.

Until such time when an effective vaccine against African swine fever is developed, we can expect that production of other proteins like poultry, eggs, beef and seafood will rise. So, it seems as though poultry’s presence as the world’s most-consumed protein will likely endure.  Poultry’s position as the protein leader may have stemmed from a different impetus in the United States than in the rest of the world, but everyone has ended up in the same place.

Storm Clouds on the Horizon for National Food Brands?

Archer Farms store brand (Target)
Archer Farms store brand (Target)

Generic Food BrandsAre we seeing the beginning of an upheaval when it comes to national food brands?

Over the past 30 years or so, the United States has faced its share of recessions and sharp economic cycles, with the resulting stresses on consumer budgets.

Through it all, so-called “store” and generic food brands have continued to represent only about 15% to 20% of all retail food dollar sales.

National food brands have done their part to promote themselves as the “quality” choice over store brands, as well as to promote product sales through couponing and various other attempts to beat back the “value” alternatives.

Their success has been pretty decent, all things considered … up to now. But that might be about to change.

Rabobank’s Food & Agribusiness Research and Advisory Group has just issued a report predicting that private-label food brands are poised to jump to a 25%-30% share of the market over the next ten years.

That would make the U.S. similar to what has happened in Europe, where one in three products purchased today is a retailer-branded product.

What’s behind the anticipated rise in store brands? The Rabobank report cites several contributing causes:

  • Food retailers have more sales reach and sales clout than ever. It’s not just traditional supermarkets but also warehouse clubs, drugstore chains and dollar stores.
  • Retailers are expanding their private-label initiatives into more than simply “low cost/high value” lines.
  • Stores are putting greater marketing muscle behind their own store brands – witness Target and its Market Pantry, Archer Farms and Up & Up product families.

Nicholas Fereday of Rabobank sums it up this way:

“Retailer brands have matured from their original positioning as ‘cheap and cheerless’ generic products into a more diverse range of national brand equivalents, and more recently, highly innovative premium products … On grocery shelves around the U.S., from convenience stores to upscale supermarkets, retail brands now complete successfully and often win against national brands, earning consumer trust in terms of pricing, quality, image and value.”

What are the ways the national brands can fight back against the store-brand trend? Rabobank suggests one good approach is to develop completely new products that address unmet needs.

Otherwise, they’ll end up being on the losing end of the equation, since the marketing efforts as well as attractive pricing of the store brands will ultimately prove irresistible to the majority of consumers.