The meat industry faces a fork in the road
Eric, a technician in his twenties, sits in a cafe in London's Soho district, ready to start having breakfast. His breakfast includes: sausage, bacon, fried eggs, fried potatoes and toast. All thoughts that these things might be harmful to health must make way for his appetite. When asked what he thought of the World Health Organization's (WHO) announcement at the end of 2015 that processed meat products such as bacon and sausages were carcinogens, Eric shrugged.
For the latest report released by the WHO, people resolutely said "Don't touch my bacon." Stephen Colbert, the host of The Late Show, said on the show that only the smell of fried bacon can wake up his two teenage sons every morning. "Do you think they can run downstairs because of the smell of my washing kale?"
However, the support of the people has not given much comfort to the meat industry, which has responded angrily to the International Agency for Research on Cancer (IARC) based in Lyon, France.
The North American Meat Institute (NAMI) called the report "too exaggerated and alarmist," and believed that the study was written by New Ager. Barry Carpenter, the head of the association, said: "IARC has declared that there is only one substance that will not cause cancer-a chemical substance in yoga pants."
In the hometown of Parma ham, industry associations representing producers of Italian ham, salami, and dried beef expressed concern that the incident “may have economic impact and cause people to lose their jobs”.
IARC's health warning reminds the global meat industry that a huge shift in consumer tastes has greatly changed the face of this industry. In developed markets, lower-fat, healthier meat and organic foods are becoming a new consumer trend, and the demand for processed meat products and red meat is declining.
This trend has swept the entire "junk food" industry (Big Food), and the most obvious impact may be the carbonated beverage industry. In the United States, sales of carbonated beverages have been declining for ten consecutive years, reflecting the deterioration of consumers’ impression of sugar and artificial sweeteners.
In the British and American markets, red meat consumption has been flat or declining for many years, while white meat (especially chicken) sales have been on the rise, responding to health warnings about heart disease and high-fat foods.
In the United States, although per capita consumption of red meat has remained largely at a low point in 60 years, the popularity of high-protein and low-carbohydrate diets such as the "Caveman diet" (Caveman) and "Paleo diet" (Paleo), It has always supported the consumption of red meat. Moreover, red meat is not labeled as a Class 1 carcinogen like processed meat products. IARC stated that only “limited evidence” has been found to show that red meat is carcinogenic, but red meat has high nutritional value and should not be removed from the diet. .
But for producers of meat products (such as frankfurters, ham, corned beef and beef jerky) that have been salted, cured, or fermented, IARC has not delivered such comforting news. The question now facing those companies that produce processed meat products is, how should they respond to this health warning?
Analysts said that the pressure on processed meat products and the general processed food industry will not disappear, because the road to healthier foods is still a long way off. Many start-up companies take advantage of this and provide organic or lower-fat products to gain market share from established companies.
Ferridy pointed out that Hormel, the maker of Spam luncheon meat, has recognized this trend since its founding in 124. This year, the company acquired a natural organic meat company Applegate Farm (Applegate Farm). Farms). Hormel recently stated: “We have realized that more and more consumers are looking for foods that are processed as little as possible and do not contain preservatives.” The company continues to launch its Jennie-O Turkey Store and Applegate Farms. More preservative-free and nitrate-free products.
So far, the industry’s main response to changes in consumer tastes has been to cut costs to maintain profit margins.
Analysts said that after decades of growth, packaged food companies have become inefficient and comfortable with the status quo, which makes them an acquisition target for outside investors. For example, Kraft and Heinz were both acquired by 3G Capital. The private equity group was founded by Brazilian beer tycoon Jorge Paulo Lemann and Warren Buffett's Berkshire Hathaway investment group. Last year, meat producer Tyson Foods (Tyson Foods) bought rival Hillshire for $8.6 billion.
But the cost-cutting effect is limited. Feridi said that if companies want to keep up with the rhythm of consumer demand, they need to launch products with fewer additives and more natural ingredients.
Ferridi said: "Adjusting product formulas will inevitably lead to higher raw material costs. On the way forward, companies may have to accept lower profit margins as the price of sales growth. This may be a difficult lesson for food companies. : A low-profit business is better than no business at all."
However, although the demand for processed meat products and red meat in developed markets has weakened, their demand in emerging markets has continued to rise. According to the Food and Drink Federation (Food and Drink Federation), in 2014, the sales of British food exports to China increased by 12% year-on-year. Food types include pork, dairy products and salmon. The federation hopes that China will approve the import of trotters, which it considers is a "huge potential" market.
Euromonitor said that China is expected to surpass the United States this year to become the world's largest processed meat market. In 2014, the processed meat industry grew by 3% year-on-year, and the main driving force came from China.
The Chinese eating habits are rapidly changing from rice and vegetables to meat. Euromonitor said that it would be difficult for China to feed 1.3 billion people if it is solely dependent on domestic food production, and the recent announcement by the Chinese government to end the one-child policy will increase this difficulty. China may be one way to save Western bacon producers, but advocates of organic and natural meat farming say the other way is to produce better quality products.