According to a Research and Markets report, increased sales of added-value and premium products have helped to drive value growth, while poultry's healthy image and its versatility have helped to boost volume sales. The poultry market can be split into two sectors: retail poultry sales and catering poultry sales.

Retailers are responding to welfare concerns to create a healthier image for the poultry market. Campaigns by organisations such as the Royal Society for the Prevention of Cruelty to Animals (RSPCA) have sought to highlight the plight of intensively farmed chickens. Furthermore, in January 2008, two of Britain's best-known chefs, Hugh Fearnley-Whittingstall and Jamie Oliver, raised awareness of the appalling conditions in which many chickens are reared, with television programmes highlighting the issue. Morrisons became the first supermarket to sell free-range duck bearing the RSPCA's Freedom Food label, guaranteeing higher animal welfare. Other health concerns remain, and two outbreaks of avian influenza affected turkey sales in 2007, slowing the overall growth of poultry during the year.

Chicken continues to dominate the market, accounting for 82.7% of retail sales by value in 2007. However, sales of other poultry are also rising. Turkey is increasingly bought throughout the year, aided by its versatility and healthy image. Sales of duck are also growing robustly. The `other poultry' sector, including geese and pheasants, is also growing in popularity, as consumers seek to eat more free-range, `naturally reared' food.

Chicken restaurants enjoyed rapid growth in the UK in the 1990s, but the rise in their sales value has slowed sharply over the past 5 years (2003 to 2007). This reflects a growing concern over healthy eating (unlike the poultry market the chicken restaurant market does not have a healthy image), and increasing competition from other fast-food outlets (such as the main burger chains, which are also now selling chicken-based meals).

The major supermarkets dominate the sale of fresh and frozen poultry, accounting for around 85% of sales by value in 2007. The catering industry has also become a major market for poultry and now accounts for 30% of total consumption. The major grocery retailers are increasingly focusing on supplying premium products.

We expect the poultry market to experience continued healthy growth over the next 5 years (to 2012), driven by further growth in demand for added-value products in the chilled cabinet, as well as premium products (such as organic and free-range meat). Furthermore, global imbalances in supply and demand will fuel inflation in the sector.

Prospects for the chicken restaurant sector are less bright. Health concerns and increasing competition from other fast-food outlets are likely to slow growth in the UK. We expect sales to continue expanding over the next 5 years (2008 to 2012), but sales growth is likely to be only in line with inflation.