In just over 50 years, Australia’s consumption of chicken increased tenfold. Industry expert and journalist Peter Bedwell provides an overview of the poultry sector. This article was first published in Food & Drink Business March 2021.
Australia leads the world in chicken meat consumption. We eat around 50 kilograms per person per annum, which is a far cry from the 4.6 kilograms in 1965. So just what has driven this phenomenal rise in a nation once famous for its beef and sheep meat consumption?
Cost in the obvious answer, but the emergence of supermarkets as the retail outlet of choice from the late 1960s was a significant factor in ‘the rise of chicken’.
Ingham’s is the largest chicken meat processor in Australia today, with 40 per cent of the total market. This is partly due to a long-standing partnership with Woolworths dating from when chicken started to gain popularity. Ingham’s is #8 in Food & Drink Business’ Top 100 Food & Drink Companies for 2020.
As Ingham’s and Woolworths grew, quick service restaurants (QSRs) started to emerge, in particular Kentucky Fried Chicken. This boosted the unstoppable love of chicken.
Other factors that came into play was the perception of chicken as a ‘healthy’ protein and relatively easy to cook.
It has continued to evolve with market demands and shifting demographics. The product range, once limited to the whole bird, is now crowded with a wide range of options from meal type to cultural preferences.
Other initiatives recognise the consumer concern for animal welfare and though there is little strong scientifically based evidence that free range is more welfare friendly than raising birds in enclosed sheds, the average consumer believes differently.
This has led to a number of new products being defined by production methods, including the RSPCA broiler accredited scheme for broiler growers that encompasses over 90 per cent of broiler production today.
Hazeldene’s Chicken Farm, a family-owned business located near Bendigo, was the first to adopt the RSPCA accreditation for broilers in 2011, which is now an almost universal standard.
Who grows the chooks
A critical factor in modern poultry production is the contract grower system.
Developed primarily in the US, Australian integrators like Ingham’s quickly adopted the system as demand for chicken meat grew at over three per cent a year.
In simple terms, a contract grower owns the land and builds the sheds and maintains the farms’ operations to the integrating company standards. The newly hatched chicks are delivered from company owned hatcheries and feed is delivered from the integrators’ feed mills.
In Australia, the birds are grown to market weight in 36 to 44 days, depending on the size and type of cuts required by retail customers.
Poultry housing on contract grower farms today is highly automated and uses sophisticated computer-based control of the shed climate to optimise the birds’ growth and welfare.
Regulation of key parameters such as stocking density of birds in sheds is the responsibility of state governments. RSPCA accredited farms involve a lower stocking density limit than state regulation allows.
The RSPCA regulation lighting protocols are considered to benefit the birds’ welfare, and its perching and deeper floor litter protocols are more than the minimum state based requirement. Ammonia levels in sheds are required to be monitored as part of the accreditation standards.
The contract grower system continues as the backbone of production: market leader Ingham’s has about 220 growers under contract and a further 62breeder farms.
Baiada Poultry, the other major integrator with around 35per cent of the market, sources its birds from both smaller family-owned contract growers. Baiada also owns Steggles and Lilydale Free Range brands.
There is, however, a growing proportion from a single corporate style contract grower Proten, which supplies about 40per cent of Baiada’s birds.
Broiler production at all stages is a high-volume low margin business that is highly capital intensive.
All the integrators big and small have been investing in improved infrastructure.
Ingham’s recently completed a major new automated feed mill at Murray Bridge that supplies other livestock industries with feed as well as its own operations. The company is planning new hatcheries to supply the day-old birds to its grower network.
At the grower level, broiler chicken sheds are highly automated with computer-controlled climate control to ensure optimal conditions for the growing period.
The ability of these control system to collect data and all aspects of rearing the birds has made the increased use of AI an option to improve the efficiency of the growing process. AI technology developed in the UK (Optifarm) is now available in Australia.
Changing expectations
Changing demographics mean the poultry sector is developing new production methods and product offerings.
Sustainability, environmental impacts and ethical considerations are becoming increasingly important.
Woolworths recently announced that its business is heading for carbon neutrality – will this apply to their suppliers, particularly of protein?
In the EU, poultry product labelling includes the carbon content per kilogram involved in the growing, processing and packaging of the product.
In South Australia, new free-range farms built to supply Ingham’s make extensive use of renewable energy through the use of solar panels and energy saving equipment in the sheds themselves.
Hazeldene’s recently developed its Bare Bird product, for which chickens are grown in free range sheds and fed a vegetarian diet. The products sell at a premium over conventionally produced birds.
Activists in the Netherlands, who were against rapid growth genetics, were instrumental in the adoption of slower growing genetics, which has since become established in Australia.
In 2019, Baiada introduced its Slow Hills brand, which sells through Coles. The Slow Hills breed is from poultry genetics company Hubbard and matures slower than other breeds.
These birds gain weight at a slower rate – roughly 60 per cent of their conventional cousins in the same amount of time purely due to genetics.
Adaptation
COVID-19 caused a number of challenges to chicken meat production including consumer hoarding, social distancing in processing plants, and the high risk of a facility becoming a hot spot.
Disruption to supply chains, which resulted in overstocking at freezer facilities, is only now being resolved as consumption patterns return to normal.
There is also now a new disruptor to the industry – plant-based protein.
Just as KFC was a major driver for chicken’s popularity when its first Australian store opened in 1968, it and other QSRs are offering meat-free plant-based alternatives.
Indeed, Ingham’s recently announced its own plant-based brand in Australian supermarkets and is already selling plant-based proteins to Aldi in New Zealand as well as some restaurant chains.
Announcing the company’s 1H FY21 financial report, Ingham’s CEO Jim Leighton said he expected plant-based protein could account for five per cent of the protein market over the next five to 10 years.
Meanwhile, in a world first, the Singapore Food Agency announced in December a cultivated meat – US-based Eat Just’s cultured chicken nuggets – met its food safety standards and was safe for human consumption.
While protein trends will continue to change, the dominance of chicken in Australia’s protein mix looks set to remain.
