Food safety should become a crusade and we should strive to make our food production systems, farm delivery systems, logistics and supply and retail operations a flag bearer of our commitment.
It was about 2.6 million years ago that meat first became a significant part of the pre-human diet. Not only did processing and eating meat come naturally to humans, it’s entirely possible that without an early diet that included generous amounts of animal protein, we wouldn’t even have become human—at least not the modern, verbal, intelligent humans we are. So, for starters, thank you, meat!
On a more micro level, everyone is looking out for themselves at the present moment. Importing processed meat, the start to finish of which is fully capable of being comprised at several points irrespective of the best practices being followed, is a risk many countries are not willing to take. They rather focus on local produce for local market and strengthen that supply chain and ring fence their own interests. However, everyone will outgrow this at some point as meat exports of the serious players contributes significantly to their respective economies.
Having said that, with this background, as meat producers of India, this time should serve as a ‘think-plan-execute’ period. It is today or never. We have been handed down this opportunity at course correction and character building, let us make the most of it.
As far as the Indian meat market goes, just off my head I can think of the following challenges:
Eroded institutional sale
Changing consumer behaviour
Changing consumer meat purchasing pattern
Growing preference for online purchase
Consumer demand- food safety, hygiene, traceability
Alternative diets prompted by health & social concerns- vegetarianism, veganism, organic, cruelty to animals
Creating an inclusive demand for meat and meat products
Processed meat imports
Supply to institutions contributed to a good 40% of our sale. Eateries, pubs, restaurants, hotels have been shut down for the past 3 months almost and will probably be the last to open. Even after they do, patrons are not likely to flock to them right away. This has pushed many businesses to curtains. Those who do survive have to prepare and market their dining experience to be 100% safe. Means time, money and patience and for the industry, nerve wracking anxiety. How are we going to make up for this eroded business? It obviously means we have to venture into an area which in India is hitherto neglected- the consumer, who is logically, the most important factor in any buying process.
There has been an unrelenting negative and fake news campaign particularly against the poultry industry, which only stepped up with COVID. There was added scrutiny and fear as most purchase is from independent chicken shops or those as part of larger ‘wet markets’ where safety and hygiene standards are unregulated. Chicken is the favourite meat of Indians. The very notion that consuming their favourite could harm them, prevented many chicken eaters from buying it, causing colossal losses to the industry, almost to the tune of 30,000 cr!
COVID has also brought pay cuts and job losses across board. With many people expecting COVID-19 to negatively affect their finances, consumers are being mindful about their spending and have shifted their spending largely to essentials, such as grocery and household supplies, and cutting back on most discretionary categories. Those who continue to eat meat are now relying on processed and packaged meat. Though more expensive, supermarkets and convenience stores offer a safer environment and safe meat. A survey conducted by McKinsey found that when deciding where to shop, consumers are looking for retailers with visible safety measures such as enhanced cleaning and physical barriers. Many consumers especially millennials have shifted to e-commerce for their meat and cold cuts. Many consumers say they plan to continue shopping online even when shops reopen. This option too while more expensive, the claims made by online sellers as to its ‘safety’ & ‘hygiene’ make it worth it.
This shift is very telling. Consumers are willing to try new things, willing to spend more because they are assured of ‘food safety’, ‘packaging quality’ and ‘hygiene’. Going forward this segment will grow, because people will step out of the house only if necessary, in order to minimise exposure and will prefer home delivery with a guarantee of safety, putting poultry processing in the spotlight!
Currently, in India, about 5% of poultry meat is sold in processed form, of which only about 1% undergoes processing into value-added products (ready-to-eat/ready-to-cook). The poultry processing industry in India was expected to expand at a CAGR of ~12% between 2018 and 2023. However, taking into consideration consumers’ preference for packaged meat, this could go as high as 20%. Poultry is the major source of meat in our country, its share in total meat consumption is about 28%. If this is to remain unchanged, we have to look at capacity & capability building of our processing infrastructure.
Where we have to a large extent mastered production & genetic efficiencies we are yet raw at the game of retailing, which is directly proportional to understanding of consumer behaviour. Not only do we need more processed meat , but also more and more brands need to be on the shelves with more options & choices catering to consumer taste & preference. To thrive, we will need to create a healthy ecosystem for meat retail. Because we are not immune to the possibility of growing imports of processed meat, the only way we can prevent it is by strengthening our processing. Afterall, we know local taste, we know Indian spices,we know the seasoning of tikkas and chops. To marginalise processed meat imports, we have no choice but to up our processing game.
That includes but is not limited to changing the way we think. The scope of our responsibility has widened. Meat growers will have additional responsibilities, to adhere to and comply with food safety, biosecurity and hygiene standards in operations. And it cannot only be claimed. The claim will have to be legitimised for the product to be acceptable. They will be expected to be able to prove the quality of protein, with full traceability. This will undoubtedly add to production cost and consequently transferred to the cost of protein delivered/kg body weight. Consumer will expect it and we will have to deliver. They key is to understand our new consumer which will in turn provide us answers to almost all our questions.
While we build variety and choice in our offerings, the product portfolio has to be inclusive. Consumers are going to tighten their purses and the first casualty will be their food choices. While there are no statistics to support at this time, meat might become a luxury or an occasionally eaten commodity. It will be natural behaviour for consumers to keep the focus on filling their bellies with whatever they can afford. So we might have to look at price & product customization to keep meat & meat products attractive for all consumers. This will in a way help us cover some lost ground & prevent from further erosion.
There are also added shocks provided by those propagating alternative diets, vegetarianism, veganism, organic produce, social concerns of cruelty to animals so on and so forth. While these are not significant inhibiting factors, in the Indian context presently, they could easily become one, and hence need to be addressed. Vegetarianism is a way of life. Vegans and organic only consumers are relatively new. These are not terms I heard growing up. The farthest I got was lactose intolerant. I think these choices were perpetuated by weight loss goals, lifestyle and healthy living choices. Everyone has a right to live the life of their own choosing, but slowly a militant element is entering this equation, which is unhealthy and uncalled for. Food, be it vegetarian or non-vegetarian must at any cost be guaranteed as ‘safe’ and ‘nutritious’. It will be interesting to know what percentage of alternative diets can make that claim. On that note I rest my case on this issue which I feel very strongly about.
To conclude I will reiterate what I have been saying for quite some time now – the industry will have to step up to these challenges. Food safety should become a crusade and we should strive to make our food production systems, farm delivery systems, logistics and supply and retail operations a flagbearer of our commitment. Only this is going to make consumers have trust in us and faith that the food we deliver, which is consumed by them & their family adheres to all food safety norms in place. Another area where we really need to go professional is- communication. We will need to have a systemic approach to thwart all sorts of false propaganda and fake news directed at us. This can be done through pro-active communication, awareness campaigns and other demonstrative tools.
The message on the wall is clear. Those of us who look within our own businesses, operations and processes with the intention to transform and of course the large groups, have a higher chance to not only survive this but also find a sustainable path for the future. We don’t have to create anything new. We just have to change the way we have been doing things and that I know is easier said than done. But it is to our own peril, so it is time to get cracking!
By Mr. O.P. Singh (Managing Director)
Huvepharma Sea (Pune) Pvt. Ltd.