Business Strategies: Three trends to monitor in 2015
The global processed meat market has grown exponentially in the last decade and this growth is expected to continue. In fact, according to FPSA’s most recent “Processed Meat and Meat Processing Equipment” report, the global market is estimated to expand at a compounded annual growth rate (CAGR) of 14.3 percent from 2013 to 2018, to reach $799 billion by 2018.
The report offers good news for meat processors and many opportunities for expansion globally. Here are three trends meat-processing professionals should keep an eye on as they expand their businesses in 2015:
Readers can visit www.myprocessexpo.com to register for Process Expo, Sept. 15-18, 2015, at McCormick Place in Chicago, and to find out more about the educational program the trade show has to offer in 2015.
1. The middle class in developing countries
The rise of the middle class in developing countries is good news for meat processors. Factors such as increasing demand for protein-rich convenience food and the busy lifestyles of two-income middle class families in developing countries are driving the market for processed meat.
Asia-Pacific, in particular, is a promising market due to the increased acceptance of processed meat by the steadily growing number of middle-class consumers. The Asia-Pacific market accounted for 23 percent of the total market revenue at $81.664 billion in 2012 and is projected to almost double to $159.354 billion by 2018.
The ever-growing population, especially in developing nations, and their increasing income are expected to result in a rise in demand for food both fresh and processed. As a result, the volume of meat being processed is expected to increase in the near future.
2. Research and development investments
Investments in R&D by key producers to manufacture protein-rich, healthy processed meat are the winning imperative in this industry. These activities, which are carried out across all regions, especially in Europe, to develop low-cost production techniques are expected to add pace to the growth rate of the meat processing equipment market. The major constraint of this market is the small and medium-size organizations in Asia-Pacific, Latin American and South African countries catering to the demands of local markets but which cannot afford the costly meat processing equipment.
3. Opportunity in customization
One of the major opportunities in this highly competitive market is for meat processors to launch new products that target consumers in specific generations.
New products with natural and healthier versions are being targeted at health-conscious adults, and this is going to alter market dynamics soon. Many meat processors have started to replace artificial ingredients with natural or organic ones to improve the meats’ palatability and range of benefits to cater to the expectations of a wider consumer base.
New entrants in this segment find they are overrun by the top brands. They have started marketing their products to largely untapped markets. Consumers are increasingly demanding healthier and more natural ingredients, smaller pack sizes and generic or kids-oriented packaging. The future customers of processed meat seem to be older women and men who work away from home.
Our research indicates meat processors will have the opportunity for huge growth in the next three years. But as always, the meat processors that best utilize this knowledge and continue to innovate will be the companies that benefit from the increased market demand for processed meat.