R Krishna Das
Reeling through one of the worst phases of economic crises, poultry industry could eye investing in developing processing infrastructure through shift in Indian consumer preferences would take time.
Still in nascent stage with less than 10% revenue share, poultry processing is expected to grow at healthy pace over the medium term, driven by favourable socio-economic factors and increasing penetration of quick service restaurants (QSR) chains, experts in the industry exhorted.
India remains predominantly a live bird market with close to 90% of broiler sales executed at traditional retail outlets as consumer prefer for freshly cut broiler. Large integrators continue to invest in developing the processing infrastructure as a preferable bet for future.
According to ICRA reports, recent Covid-19 lockdown has impacted demand from restaurants and QSR chains, and the recovery is likely to be gradual post relaxation. Consequently, the demand for process meat is likely to remain muted in FY2021 after witnessing 10-12% growth in the last three years.
Poultry meat in India is primarily sold through fresh markets and consumers prefer to buy live poultry and get it dressed in their presence. The average poultry purchased is fresh chicken meat, mostly slaughtered in small establishments with wet markets accounting for more than 90% of sales.
It compares with close to 90% processed chicken market in US, EU and Australia or even more than 50% processing in markets like China, South East Asia, etc.
The healthy growth in poultry output over the last decade makes India one of the fastest growing poultry market with its long term growth potential remaining strong on the back of favourable socio-economic factors. However, the growth rate has been put on temporary halt due to recent disruption, which will also have bearing on overall chick placement during FY2021.
ICRA expects domestic broiler meat demand to be impacted in the short-term due to the COVID-19 pandemic leading to a marginal de-growth of 4-5% in poultry meat revenues and table egg demand to moderate by 1-2% in FY2021. Its transition from a predominantly live bird/wet market to a chilled/frozen market would be crucial for increasing value addition as well as to increase presence in international trade where India currently has a negligible presence.
Over the long-term Broiler volume growth will be supported by low per capita consumption, religious preference for chicken meat, year-round easy availability across country, increasing disposable income, changing food habits, increasing health awareness, and poultry being one of the cheapest source of protein.
True and perfect economic study. Now the people realising the importance of protein in human life. The new 2020 phrase should be “An egg a day, keeps Doctors away”