Production poultry meat of which chicken accounts for 90% in India, is rising at a faster clip than other meats like mutton, beef and pork. Between 2007-08 and 2010-11, the latest year for which data is available, poultry meat production grew at a compound annual growth rate (CAGR) of 7.7% compared with 4.9% for mutton and 2.8% for pork, according to the ministry of statistics and programme implementation. Beef production grew at 8.8%, primarily driven by exports.Chicken is considered a much healthier source of animal protein than mutton, beef and pork, the last two of which are avoided by Hindus, and Muslims, respectively, for religious reasons.
MEATY GROWTHBetween 2005 and 2010, chicken consumption grew at a CAGR of about 18%, almost twice as high as the growth in the 1994-2005 period, according to a recent Credit Suisse report which quotes National Sample Survey Organisation data. The other food that comes closest to chicken in its growth rate is egg, which grew at a CAGR of over 10% in 2005-2010. The value of poultry meat produced in 2010-11 was nearly Rs 30,300 crore (see Meat Production in India) or under $5 billion in current terms, as per official data, and industry experts say the figure has risen to nearly Rs 40,000 crore, or $6.5 billion, now.The rise in demand is reflected in the growth of quick service restaurants (QSR) like Kentucky Fried Chicken and McDonald's. Rating agency Crisil expects the QSR market to double in size by 2015 from Rs 3,400 crore in 2012-13.
Tarun Lal, chief operating officer of Yum Restaurants International in India, which owns KFC, says the rise in chicken consumption is also driven by its availability in modern retail stores. KFC, which came to India in the mid-1990s but was relaunched in 2004, has 300 outlets. "We have been growing at 40% annually and plan to add 80-100 outlets every year," says Lal.
ET reported on October 25 that another American chain, Burger King, is set to open shop in India. There was also news recently that Reliance Industries is joining hands with a British company to run a QSR chain in India dedicated to chicken. A Reliance spokesperson, however, denied the report.
Among the biggest producers of chicken in the country are Coimbatore, Tamil Nadu-based Suguna Poultry, Venky's India, and Godrej Agrovet, which has a joint venture with US multinational Tyson Foods. While Venky's is in the QSR space with Venky's Express, Suguna is also mulling the same, says its managing director GB Sundararajan. Godrej Agrovet MD Balram Yadav was unavailable for comment and questions sent to Venky's remained unanswered. NO BACKYARD BUSINESSAiding the increasing chicken consumption is the growth of poultry farms across the country. While there is no data available on the number of poultry farms in the country, about 5.5 crore chickens are killed weekly.
"Farmers in India have moved from rearing country birds in the past to rearing hybrids which ensure faster growth of chicks, higher eggs per bird, increased hatchability, low mortality rates, excellent feed conversion and consequently sustainable profits for the poultry farmers," say Subrata Ray and Ravi Kabra of rating agency Icra in a May 2013 report. Satish Pal, president of Poultry Federation of India, says till the late 1970s the country was mostly reliant on country birds for its chicken meat.
With the growth of broiler farms and research, production of broilers has become more efficient and scalable. "For instance, it used to take 5 kg of feed to get a 2-kg chicken in the 1980s, but now it takes just 3.2 kg of feed. Also, a broiler would reach 2 kg in 60 days, now it just takes 35 days," says Pal, who has a broiler-breeding farm in Haryana from which he sells 70-75 lakh one day-old chicks every year.
Ray and Kabra say the productivity gains of poultry industry are reflected in relatively lower price increases in poultry meat over the past five years compared to other meat products: "Poultry wholesale price index has grown at 12% year-on-year over 2008-2013 against 21% for the overall meat products basket, providing an affordable alternative for meeting protein requirements in the Indian diet."
DOWNSIDES TO SCALEV V Kulkarni, director of the National Research Centre of Meat in Hyderabad, says the industry has been able to standardise production over the last decade or so. Though India is the world's largest exporter ofbeef, several countries prohibit import of poultry meat from India owing to concerns over lax standards.But Kulkarni begs to differ: "We are not much behind developed countries in quality but at the same time we are not competitive in the export market since developed countries provide subsidies to poultry farmers."Two of the biggest challenges to the poultry industry are huge price fluctuations and the threat of bird flu which recurs periodically. "The price of one kg of boneless chicken this week in Mumbai is Rs 240, next week it could go down to Rs 200," says Udeshi, who claims not to know the reasons behind the volatility. The price of mutton, currently at about Rs 350/kg, remains at the same level for as long as a year.
Kulkarni says lately the industry has also been hit by a rise in the prices of maize and soya, the main ingredients in chicken feed. Another worry for poultry companies is the incidence of bird flu. The last major outbreak was in 2008 when millions of chickens had to be culled. "It's not a major concern because the industry is scattered across the country," says Sundararajan. Suguna has 18,000 broiler farms in 14 states and processes 7 million chickens a week. It closed 2012-13 with revenues of Rs 4,850 crore.
The Indian poultry industry is heading in the same direction as in the US and China - where a few companies control most of the market, and small poultry farmers end up as contract farmers with these companies. A natural fallout of poultry farming being conducted on an industrial scale is questions being raised about the conditions in which chickens are reared at these farms.
"Poultry farms in India disregard the basic welfare guidelines and hygiene measures. PETA [People for the Ethical Treatment of Animals] investigations into poultry farms across India have shown that animal waste and dead bodies accumulate on the floor of poultry sheds," says Bhuvaneshwari Gupta, campaigns and nutrition adviser at PETA India. But such concerns, which have been voiced globally, will have little bearing on the growing appetite of Indians for their favourite meat.
ET Bureau Oct 27, 2013, 03.20AM IST
MEATY GROWTHBetween 2005 and 2010, chicken consumption grew at a CAGR of about 18%, almost twice as high as the growth in the 1994-2005 period, according to a recent Credit Suisse report which quotes National Sample Survey Organisation data. The other food that comes closest to chicken in its growth rate is egg, which grew at a CAGR of over 10% in 2005-2010. The value of poultry meat produced in 2010-11 was nearly Rs 30,300 crore (see Meat Production in India) or under $5 billion in current terms, as per official data, and industry experts say the figure has risen to nearly Rs 40,000 crore, or $6.5 billion, now.The rise in demand is reflected in the growth of quick service restaurants (QSR) like Kentucky Fried Chicken and McDonald's. Rating agency Crisil expects the QSR market to double in size by 2015 from Rs 3,400 crore in 2012-13.Tarun Lal, chief operating officer of Yum Restaurants International in India, which owns KFC, says the rise in chicken consumption is also driven by its availability in modern retail stores. KFC, which came to India in the mid-1990s but was relaunched in 2004, has 300 outlets. "We have been growing at 40% annually and plan to add 80-100 outlets every year," says Lal.
ET reported on October 25 that another American chain, Burger King, is set to open shop in India. There was also news recently that Reliance Industries is joining hands with a British company to run a QSR chain in India dedicated to chicken. A Reliance spokesperson, however, denied the report.
Among the biggest producers of chicken in the country are Coimbatore, Tamil Nadu-based Suguna Poultry, Venky's India, and Godrej Agrovet, which has a joint venture with US multinational Tyson Foods. While Venky's is in the QSR space with Venky's Express, Suguna is also mulling the same, says its managing director GB Sundararajan. Godrej Agrovet MD Balram Yadav was unavailable for comment and questions sent to Venky's remained unanswered.
"Farmers in India have moved from rearing country birds in the past to rearing hybrids which ensure faster growth of chicks, higher eggs per bird, increased hatchability, low mortality rates, excellent feed conversion and consequently sustainable profits for the poultry farmers," say Subrata Ray and Ravi Kabra of rating agency Icra in a May 2013 report. Satish Pal, president of Poultry Federation of India, says till the late 1970s the country was mostly reliant on country birds for its chicken meat.
With the growth of broiler farms and research, production of broilers has become more efficient and scalable. "For instance, it used to take 5 kg of feed to get a 2-kg chicken in the 1980s, but now it takes just 3.2 kg of feed. Also, a broiler would reach 2 kg in 60 days, now it just takes 35 days," says Pal, who has a broiler-breeding farm in Haryana from which he sells 70-75 lakh one day-old chicks every year.
Ray and Kabra say the productivity gains of poultry industry are reflected in relatively lower price increases in poultry meat over the past five years compared to other meat products: "Poultry wholesale price index has grown at 12% year-on-year over 2008-2013 against 21% for the overall meat products basket, providing an affordable alternative for meeting protein requirements in the Indian diet."
DOWNSIDES TO SCALEV V Kulkarni, director of the National Research Centre of Meat in Hyderabad, says the industry has been able to standardise production over the last decade or so. Though India is the world's largest exporter ofbeef, several countries prohibit import of poultry meat from India owing to concerns over lax standards.But Kulkarni begs to differ: "We are not much behind developed countries in quality but at the same time we are not competitive in the export market since developed countries provide subsidies to poultry farmers."Two of the biggest challenges to the poultry industry are huge price fluctuations and the threat of bird flu which recurs periodically. "The price of one kg of boneless chicken this week in Mumbai is Rs 240, next week it could go down to Rs 200," says Udeshi, who claims not to know the reasons behind the volatility. The price of mutton, currently at about Rs 350/kg, remains at the same level for as long as a year.Kulkarni says lately the industry has also been hit by a rise in the prices of maize and soya, the main ingredients in chicken feed. Another worry for poultry companies is the incidence of bird flu. The last major outbreak was in 2008 when millions of chickens had to be culled. "It's not a major concern because the industry is scattered across the country," says Sundararajan. Suguna has 18,000 broiler farms in 14 states and processes 7 million chickens a week. It closed 2012-13 with revenues of Rs 4,850 crore.
The Indian poultry industry is heading in the same direction as in the US and China - where a few companies control most of the market, and small poultry farmers end up as contract farmers with these companies. A natural fallout of poultry farming being conducted on an industrial scale is questions being raised about the conditions in which chickens are reared at these farms.
"Poultry farms in India disregard the basic welfare guidelines and hygiene measures. PETA [People for the Ethical Treatment of Animals] investigations into poultry farms across India have shown that animal waste and dead bodies accumulate on the floor of poultry sheds," says Bhuvaneshwari Gupta, campaigns and nutrition adviser at PETA India. But such concerns, which have been voiced globally, will have little bearing on the growing appetite of Indians for their favourite meat.
ET Bureau Oct 27, 2013, 03.20AM IST
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