June 13, 2018
Guangdong Wen explores genetics to produce meatier chickens
Guangdong Wen's Foodstuff Co Ltd, a major Chinese poultry producer, is tapping into genetics to develop meatier chickens for China's supermarket and fast-food sectors, the company's director, Wen Pengcheng, told Reuters.
This endeavour would be realised through an in-house gene bank and breed unit which create such birds for processing. Guangdong Wen aims to achieve "a certain weight", appearance and taste of chickens which meet consumer demands, Wen said. By accomplishing these expectations, it would be able to compete effectively with other companies like Fujian Sunner Development Co.
The move would mark Guangdong Wen's expansion from serving local markets, which sells live chickens. Due to bird flu outbreaks in past years, the habit of acquiring live poultry to guarantee freshness leaves the company more susceptible to market shutdowns, compelling it to consider other sales channels.
In addition, its swine business, according to Reuters, has been impacted by declining prices, with last year's net profits plunging 42.6% to RMB6.8 billion (US$1.1 billion) on revenues of RMB55.7 billion (US$8.7 billion). This development is not likely to improve anytime soon given the current glut in the supply of hogs.
Guangdong Wen, the world's fifth-biggest poultry company, presently sells about 80% of its poultry, or around 600 million birds yearly, live to markets, said Wen.
By venturing into retail, the company could cause a significant stir in the market, Pan Chenjun, a senior analyst with Rabobank, pointed out.
"It will definitely impact white meat, with consumers trading up and looking for better tasting product," she told Reuters, referring to the white-feathered chickens.
After all, Guangdong Wen is China's top producer of native breeds, also known as yellow-feathered chickens, which make up of around 40% of the country's poultry market, or 4.7 million tonnes in 2017.
These birds are slower-growing and preferred by international companies over white-feathered broilers for their more potent taste in popular dishes, firmer meat, and supposedly excellent nutritional benefits.
However, slower-growing chickens would lead to a costlier process to breed them, compared to broilers which are imported from foreign genetics firms.
In the meantime, Guangdong Wen is looking at a market outside China, namely France, which has a huge retail market for yellow chicken meat, Wen said.
Recent concerns of animal welfare have helped push the demand for slower-growing chickens in several European markets.