Growth of Processed Poultry Stimulates Investment

INDIA - Reducing waste and ease of purchase have been cited as the drivers for the growth of processed poultry products.
calendar icon 6 October 2010
clock icon 4 minute read

In today's poultry world, 95 to 97 chicken out of 100 are sold live, according to The Hindu Business Line. This means, they are butchered in front of the customer at retail outlets in cities, towns and villages. However, all this could change in a few years as various factors could lead to increased consumption of processed chicken.

Mr B. Soundararajan, managing director of the Coimbatore-based Suguna Poultry Farm Ltd, said: "The live birds' sale sector makes up 97 per cent. Only institutional buyers opt for processed chicken either in chilled or frozen form."

Mr Shivakumar, Managing Director of VKS Farms Pvt Ltd, also based in Coimbatore, said: "Things are heading towards a situation where consumers will have to opt for the purchase of processed chicken only. The Chennai Corporation has stopped giving licences to new outlets where chicken will be sold alive. In Delhi, slaughtering has been banned though its implementation is yet to be speeded up."

According to Mr Soundararajan, sales of processed chicken have been rising by 30 to 40 per cent annually. His company's sale of processed chicken could double from the 422 tonnes sold during 2008-09. Last fiscal year, the company sold 775 tonnes of processed chicken and this year in the first quarter, the sales clocked 210 tonnes.

The encouraging point for processed chicken manufacturers is that this sector has been witnessing continuous growth even when the poultry sector in general witnessed a downtrend in 2008 and dormancy in 2009.

"People have begun to buy chilled chicken and institutional buyers are taking frozen chicken," Mr Shivakumar said.

The body temperature of a chicken is usually 25 to 27°C. In the chilling process, it is brought down to 8 to 10°C after the feathers are removed. This has a shelf life of three days if kept in the refrigerator. Frozen chicken is where the temperature is reduced to 4°C kept in a blast freezer before being sent to the retail outlets. The frozen chicken can last one year.

Mr Shivakumar said that people in the cities could soon take to processed chicken on grounds of waste disposal. "In a live chicken, the yield is only 65 per cent and the rest is waste. If 15 lakh [1.5 million] birds are slaughtered every day, the waste generated is nearly 30 lakh tonnes. This will soon make people turn away from the live birds," he said, reports The Hindu Business Line.

Again, the turnover time in sales between live bird and processed chicken could set the agenda for the future. "If buying a live chicken takes eight to 10 minutes for a customer, purchase of chilled chicken takes hardly two minutes," Mr Shivakumar said.

Asked about acceptability, he said it was there. "Presence of processed chicken in retail outlets has to increase," said Mr Soundararajan.

In order to improve awareness among consumers on processed chicken, VKS Farms has begun giving samples from its retail outlet 'Dola'. Suguna Poultry, on the other hand, has come up with a variety of chicken products to promote consumption of processed bird.

The increased consumption of processed chicken could mean better bottom line for the poultry firms. Since the chicken is processed at their outlets, they could make better use of the wastes.

"We grind the wastes into powder that is used in pet feed," said Mr Shivakumar. In fact, he says, it could also be a gain for the consumers since they have to pay only for what they consume, and not for the waste.

"At our retail outlets, a live bird costs 110 rupees, whereas a chilled one costs only 90 rupees," says Mr Shivakumar.

With cold chain development, the problem of power cuts is not a problem since people have begun using generators. "People have begun investing heavily in cold chains," Mr Shivakumar said, reports The Hindu Business Line.

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