Poultry products continue gaining more of the consumer protein dollar and its exports are growing as well, but poultry companies aren't resting on current success. In fact, they're using this time to refine business strategies and develop new products to maintain their current position.
Consumer spending on chicken grew $5.5 billion from 1991 to 1996. Pork purchases were up $2 billion, while beef purchases fell $500 million, according to USDA/FAS (see Table 1).
None of these trends have to continue forever, contends William "Bill" Roenigk, vice president of the National Chicken Council (NCC), an operation similar to the National Cattlemen's Beef Association. Its membership is comprised of 45 of the 50 vertically integrated companies that produce and process chicken as well as more than 100 allied industry companies.
"There are a couple of ways of examining market share - per capita consumption and the dollars consumers spend on various meats," Roenigk says. "On a retail weight basis, chicken is the leading meat. However, if you consider it at dollars per pound, beef is still ahead of chicken.
"Another consideration is if the product is moving up or down on a trend line. Using dollars per pound, chicken is trending upward and beef is trending lower. But, analysts tell us good competition can never be dismissed."
This situation may be the golden opportunity for beef products. Roenigk says that as the beef industry moves to more semi-prepared and prepared products, there may be some rearranging of the competition. He's not ruling out any possibility.
Roenigk says one growth opportunity for beef is the same as it's been for chicken - branding. The industry credits Frank Perdue and Holly Farms for demonstrating how to brand products in the early 1970s.
"Perdue originally sent ice-packed chicken to retailers and asked them to place the Perdue brand on it. Holly Farms was going with case ready, tray-packed chicken. Once they realized they could go all the way to the consumer, they stuck with branding," he says.
Other poultry companies tried and failed, but they were asking consumers to pay a premium or seek out their brand, when consumers couldn't determine a difference in the products.
"What Perdue and Holly Farms taught the industry and the consumer was that the chicken behind the brand name was consistent," Roenigk says.
There's another bright spot for beef on the horizon.
"Bioengineering, or biogenetics, offers many opportunities for rearranging the map of the meat case," Roenigk says. "Mammals are predicted to respond better to biogenetics than avian species. Though we don't yet know all the advances to be made, early indications appear phenomenal. And, the American consumer isn't too concerned about bioengineering, another plus."
How Soon? None of this will happen overnight, Roenigk admits. The poultry industry evolution began in the '50s and Frank Perdue didn't buy his first processing plant until 1972. Nearly 30 years later, progress is still being made.
Chicken growers used to raise all types of chickens just as feeders feed differing types of cattle. Roenigk envisions feeders feeding more similar cattle in the future to address branding needs.
So does University of Missouri poultry specialist Jeff Firman. Not only does he see stronger genetics, but cattle grown for specific markets.
"It's not unrealistic to see that some cattle will be fed for ground beef purposes only, but higher-quality cattle may be fed for specific applications with food processing companies, retailers and other outlets. That's already begun. And, it'll be the business arrangements negotiated between feeders, packers and food sellers that will effect this change," Firman says.