Poultry consumption in Vietnam, India, Indonesia, and the Philippines (VIIP) has outperformed global growth in the past five years and is expected to continue growing through 2022 based on international financial services provider Rabobank’s industry report Foodservice is the new growth driver.
The report, which analyzed poultry consumption trends in the four countries, found the growing demand for poultry, particularly chicken, is primarily driven by its relatively lower price point and acceptability across different cultures in VIIP. It also identified the key factors that will drive further growth in poultry consumption in the next five years.
“In Vietnam, India, Indonesia, and the Philippines, consumption preferences are increasingly gearing towards snacking and convenience,” says Umesh Madhavan, Rabobank analyst of consumer foods. The growing acceptance of eating out and food delivery is proof of the changing consumer behavior.
“This growth pattern is supported by the significant millennial population in VIIP, who not only have a comparatively higher income but also are more likely to dine out and try different food options. These preferences will further boost the growth in foodservice,” says Umesh Madhavan, Rabobank analyst of consumer foods.
“This growth pattern is supported by the significant millennial population in VIIP, who not only have a comparatively higher income but also are more likely to dine out and try different food options. These preferences will further boost the growth in foodservice.”
Ben Santoso, senior analyst of animal protein at Rabobank, explains: “As eating out becomes more common, smaller-sized kiosks with a focus on poultry are expected to boost consumption through foodservice channels. However, supply-side factors such as increased competition in the processing industry and cheaper imports threaten to tighten margins for local VIIP poultry producers.
“Poultry producers therefore need to fine-tune their strategies to secure long-term margins and market share. A key move would be to invest in the foodservice channel either by developing the competence to be fully engaged in consumer-facing outlets or by establishing partnerships. For example, chicken fast-food kiosk chains appear well-suited to win in the changing consumption landscape of VIIP as they tick all the boxes when it comes to accessibility, infrastructure, and direct consumer interaction.”
Chicken fast food in the Philippines has historically been dominated by Jollibee, although the rapid growth of kiosk-style chain Chooks-to-Go by the Bounty Fresh Group of Companies has been noted. The group’s involvement in foodservice was driven out of concern over cheaper imports of chicken cuts, which prompted a move closer to end-consumers. At the end of 2017, Chooks-to-Go had 1,350 kiosks–up from 913 in 2012–all owned and operated by Bounty Fresh. The backward integration of Chooks-to-Go allowed them to sell a full-roasted chicken at P239 ($4.50) while a six-piece chicken bucket at Jollibee was priced upwards of P360 ($6.73). Chooks-to-Go has successfully entrenched themselves as an accessible and cheaper alternative to Jollibee.
Other brands, such as Andok’s, Sr. Pedro, and Baliwag have also expanded, but at a slower rate. On the other hand, the growth of Mang Inasal and KFC outlets has slowed to 0 percent to five percent over the last five years, compared to nine percent to 50 percent between 2008 and 2012. The slowdown may have been attributable to high rentals and price competition.
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