By David B. Strickland
Poultry Times staff
dstrickland@poultrytimes.com
ATLANTA — Looking at the protein production industries and what is on the horizon, Justin Sherrard, global strategist, animal protein with Rabobank, noted that, “it’s going to be a pretty interesting time during the course of this year.”
Sherrard was the keynote speaker during the U.S. Poultry & Egg Association’s Harold E. Ford Foundation Executive Luncheon, held during the recent International Production & Processing Expo in Atlanta, Ga.
He looked a wide range of factors affecting animal agriculture including possible challenges and opportunities associated with each topic, including consumer choices, production and trade.
“We hear talk in the U.S. about how the trade agenda with NAFTA (the North American Free Trade Agreement), as well as how the trade relationship with China could be revisited,” Sherrard said. “Probably there will be some movement this year, and we will stay on top of what exactly that is going to mean to the poultry industry. We are going to watch just as closely as all of you are, and as soon as we have views on these trade issues we are going to share them. We look forward to also hearing from others on what you see and what you hear and what you think is going to happen, as well.”
For animal protein production, he noted that this year is a growth year all around the globe for animal protein.
“I want to highlight the fact that this year we are moving back into a production year,” Sherrard said. “We are rebounding from what was the first year in a decade, last year, where total global production of protein was down.”
For 2017, protein production will be up, he added. This is being led by pork production which is leading the animal protein production around the world at the moment, with a global increase of 4 percent. Beef production is also up for this year, with a 3 percent increase in the U.S. and around 1.5 percent globally.
Poultry production is going to be down just a small margin this year. “Almost imperceptibly down,” he said.
“There is expansion within the industry, expansion of production everywhere; we are going to have more competitive markets that we are dealing in,” Sherrard said.
“I’m not sure that we are often enough thinking about competition between the different species when we think about what’s happening within the industry,” he added. “But the U.S. consumer, for sure, is going to be facing better offers on pork and better offers on beef this year, as well as what you are all going to be serving up in the poultry industry.
“And that is part of the fun we are all going to have, all part of the challenge that we are all going to have, as well.”
Consumers
Consumer growth in Europe is being forecast by Rabobank as having no growth for the year, Sherrard said.
“We are not going to be eating more protein Europe,” he noted. “We are going to be eating a little bit more poultry; but in Europe, no one is eating more protein, overall.”
For the U.S., looking back over the previous eight years, the number of households consuming meat products at least six times a week has decreased, he said. The average for the previous eight years in the U.S. is households consuming protein products about 4.1 times a week.
“So protein consumption is going down all around the world,” Sherrard said. “We’ve got production going up, but our consumption going down a little bit.”
When asked why they are consuming less protein products, he noted that consumers mention convenience, health considerations and a search for more variety in their diets. Consumers are interested in certain types of product as well, such as antibiotic-free, organic, grass-fed and natural products.
“So this is the backdrop that we have . . . how do we work harder to better understand what the consumer wants?” Sherrard added. “This is the sentiment that is being projected in the marketplace, and that is really what we need to be thinking about in terms of what we do to find growth, how we talk to consumers, what’s the message that we are giving them and what are we hearing back from them?”
The industry should be leading the change in marketing aspects for meat products, he said.
“We’ve got an opportunity to be engaged with the consumer,” Sherrard noted. “To have more of a conversation with consumers and find out what they are thinking, what their concerns are, and to help them understand the process that we are going through from a production point of view to deliver safe food, nutritious food and healthy food.”
He also spoke about the importance of building a trusting relationship between companies and consumers.
“If we really want to have a conversation with consumers, we need to do a better job of building a better relationship with them and understanding the role of trust in that relationship. If we want to be in a relationship with consumers, to understand what they want, what they are willing to pay for, then we need to have an open relationship with them. We need to be willing to share information.”
Also part of the current marketplace dynamic is how many consumers are active participants in online forums that discuss different types of foods, he said. These online groups discuss varied types of foods that are enjoyed and many styles of food that are desired in the marketplace by consumers.
Working to promote protein products in all channels is a must for the industry moving forward, he added.
“We’ve got wonderful products in this industry, and we need to believe in ourselves in promoting those products to the consumer,” Sherrard said. “We’ve got safe products. We’ve got healthy products. We’ve got products that tick every single box that a consumer might be interested in.
“But I don’t think that we are telling the story clearly. I don’t think that we are telling the story with confidence; and I’m not sure that we are telling the story through the channels that consumers are listening to, or reading or hearing about. And that, I think, is the great opportunity for all of us in the industry as we think about the many challenges that we are going to face in 2017.”
