| KN15383 |
| KEY NOTE POULTRY : JUNE 2003 |
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This report covers: poultry, fresh, cooked, frozen, retail poultry sales, catering poultry sales, ethnic & Mediterranean foods, health and diet issues, chicken restaurants expansion, FSA exposes water in chicken con, British Turkey of the Year Awards, European chicken consumption, world production, Brazil, the Netherlands,
Companies covered include: Banham Poultry, Brandons, Aria Foods, McDonalds, Poultex.com, Bernard Matthews, Birds Eye Wall's, Grampion Country Food Group, GW Padley Holdings, Kentucky Fried Chicken (Great Britain), Kerry Group, Lloyd Maunder, Moy Park, Sun Valley Foods, Argent Group Europe, Aviagen, British United Turkeys, Cherry Valley Farms,The Cobb Breeding Company, Lincs Turkeys, Perkins Foods Holdings, Nando's Chicken, Fast Food Systems, Favorite Fried Chicken, Dixy Fried Chicken, KFC, McCain,
EDITORIAL NOTE: Please note within this report that Bird's Eye Wall's Ltd changed its name to Unilever Ice Cream & Frozen Food Ltd on 14th April 2003.
| Executive Summary 1 |
| 1. Market Definition 8 |
| REPORT COVERAGE 8 |
| MARKET SECTORS 8 |
| MARKET TRENDS 8 |
| Retail Poultry Sales 8 |
| Catering Poultry Sales 9 |
| Changing Lifestyles 9 |
| Ethnic and Mediterranean Foods 9 |
| Health and Diet Issues 9 |
| New Product Development 10 |
| Chicken Restaurants Expansion 10 |
| ECONOMIC TRENDS 10 |
| Population 10 |
| Table 1: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 11 |
| Inflation 11 |
| Table 2: UK Rate of Inflation ( percent), 1998-2002 11 |
| Unemployment 12 |
| Table 3: UK Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 12 |
| Household Disposable Income 12 |
| Table 4: Index of Household Disposable Income (index 1971=100), 1997-2000 12 |
| MARKET POSITION 13 |
| The UK 13 |
| Table 5: Household Expenditure on Poultry and on All Meat and Meat Products at Current Prices (£m and percent), 1998-2002 13 |
| Overseas 13 |
| 2. Market Size 14 |
| MARKET SUPPLY 14 |
| Table 6: UK Poultry Meat Supplies by Volume (000 tonnes), 1998-2002 14 |
| POULTRY Retail Sales 15 |
| Table 7: Retail Sales of Poultry by Value at Current Prices (£m at rsp), 1998-2002 15 |
| Retail Prices 15 |
| Table 8: Retail Price Index for Poultry and for All Food (index 13th January 1987=100), December 2001 to December 2002 16 |
| By Market Sector 16 |
| Table 9: Household Purchases of Fresh and Frozen Poultry Cuts by Volume ( percent), 2000 and 2002 17 |
| Fresh Chicken 17 |
| Cooked Chicken 17 |
| Frozen Chicken 17 |
| CHICKEN RESTAURANTS 18 |
| Table 10: The UK Chicken Restaurant Market by Value at Current Prices (£m at rsp), 1998-2002 18 |
| OVERSEAS TRADE 19 |
| Imports 19 |
| Table 11: UK Imports of Poultry Meat by Value (£m and percent), 1999-2001 19 |
| Exports 20 |
| 3. Industry Background 21 |
| RECENT HISTORY 21 |
| INDUSTRY SYNOPSIS 21 |
| Table 12: Median Turnover, Profit Margins and Remuneration in the Poultry Meat Processing Sector, Latest Financial Year 21 |
| POULTRY FLOCK 22 |
| Table 13: The UK Poultry Flock by Type of Poultry (number of birds), 2000-2002† 22 |
| PROCESSING 22 |
| Table 14: Number of UK VAT-Based Enterprises Engaged in the Production and Processing of Poultry by Turnover Sizeband (number and percent), 2002 23 |
| EMPLOYMENT 23 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 24 |
| DISTRIBUTION 24 |
| Table 15: UK Retailers' Shares of Chicken Sales by Value ( percent), 2002 24 |
| HOW ROBUST IS THE MARKET? 25 |
| LEGISLATION 25 |
| Feed 25 |
| Health 25 |
| Processing 25 |
| Welfare 25 |
| TRADE ASSOCIATIONS 26 |
| British Chicken Association 26 |
| British Poultry Council 26 |
| British Poultry Meat Federation 26 |
| British Turkey Federation 26 |
| 4. Competitor Analysis 27 |
| THE MARKETPLACE 27 |
| Table 16: Leading Member Companies of the British Poultry Council, 2003 28 |
| Table 17: Selected Leading Poultry Processors and Chicken Restaurant Chains by Turnover and Pre-Tax Profit (£m), 2001/2002 29 |
| LEADING POULTRY PROCESSORS 30 |
| Bernard Matthews Ltd 30 |
| Company Structure 30 |
| Current and Future Developments 30 |
| Financial Results 30 |
| Birds Eye Wall's Ltd 30 |
| Company Structure 30 |
| Current and Future Developments 30 |
| Financial Results 30 |
| Boparan Holdings Ltd 31 |
| Company Structure 31 |
| Current and Future Developments 31 |
| Financial Results 31 |
| Brandons PLC 31 |
| Company Structure 31 |
| Current and Future Developments 31 |
| Financial Results 32 |
| Faccenda Group Ltd 32 |
| Company Structure 32 |
| Current and Future Developments 32 |
| Financial Results 32 |
| Grampian Country Food Group Ltd 32 |
| Company Structure 32 |
| Current and Future Developments 33 |
| Financial Results 33 |
| GW Padley Holdings Ltd 33 |
| Company Structure 33 |
| Current and Future Developments 33 |
| Financial Results 34 |
| Kerry Group PLC 34 |
| Company Structure 34 |
| Current and Future Developments 34 |
| Financial Results 34 |
| Lloyd Maunder Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 35 |
| Financial Results 35 |
| Moy Park Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 35 |
| Financial Results 35 |
| Sun Valley Foods Ltd 36 |
| Company Structure 36 |
| Current and Future Developments 36 |
| Financial Results 36 |
| SELECTED OTHER SUPPLIERS 36 |
| Argent Group Europe Ltd 36 |
| Aviagen Ltd 37 |
| British United Turkeys Ltd 37 |
| Cherry Valley Farms Ltd 37 |
| The Cobb Breeding Company Ltd 37 |
| Lincs Turkeys Ltd 37 |
| Perkins Foods Holdings Ltd 37 |
| CHICKEN CATERING 38 |
| Kentucky Fried Chicken (Great Britain) Ltd 38 |
| Company Structure 38 |
| Current and Future Developments 38 |
| Financial Results 38 |
| Nando's Chicken Ltd 38 |
| Company Structure 38 |
| Current and Future Developments 39 |
| Financial Results 39 |
| Other Companies 39 |
| Fast Food Systems Ltd 39 |
| Favorite Fried Chicken Ltd 39 |
| Dixy Fried Chicken Ltd 39 |
| OUTSIDE SUPPLIERS 40 |
| ADVERTISING AND PROMOTION 40 |
| Table 18: Main Media Advertising Expenditure on Poultry and Poultry Products (£000), 2001 and 2002 41 |
| KFC 42 |
| Birds Eye Wall's 42 |
| Bernard Matthews 42 |
| McCain 43 |
| EXHIBITIONS 43 |
| 5. Strengths, Weaknesses, Opportunities and Threats 44 |
| FRESH, COOKED AND FROZEN POULTRY 44 |
| Strengths 44 |
| Weaknesses 44 |
| Opportunities 44 |
| Threats 45 |
| CHICKEN RESTAURANTS 45 |
| Strengths 45 |
| Weaknesses 45 |
| Opportunities 45 |
| Threats 45 |
| 6. Buying Behaviour 46 |
| INTRODUCTION 46 |
| POULTRY CONSUMPTION 46 |
| Table 19: Household Consumption of Poultry and Cooked Chicken (grams per person per week), 1998-2001 46 |
| POULTRY PURCHASING PATTERNS 47 |
| Weekly Expenditure 47 |
| Table 20: Weekly Expenditure on Fresh and Frozen Poultry by Amount Spent in the Last Week ( percent of housewives), 2002 47 |
| By Demographic Groups 47 |
| Table 21: Expenditure on Fresh and Frozen Poultry by Sex, Age, Social Grade and Region ( percent of adults), 2002 48 |
| Preferred Outlets by Demographic Group 49 |
| Table 22: Outlets Where Fresh and Frozen Poultry is Purchased by Sex and Age ( percent of adults), 2002 50 |
| 7. Current Issues 51 |
| CORPORATE NEWS 51 |
| Banham Poultry Ltd 51 |
| Brandons PLC 51 |
| NEW PRODUCTS 51 |
| Aria Foods Ltd 51 |
| McDonald's 51 |
| INTERNET TRADING 52 |
| Poultex.com 52 |
| CHICKEN QUALITY 52 |
| FSA Exposes Water in Chicken Con 52 |
| TURKEY AWARDS 52 |
| British Turkey Product of the Year Awards 2002 52 |
| 8. The Global Market 53 |
| WORLD PRODUCTION 53 |
| BRAZIL 53 |
| THE NETHERLANDS 53 |
| EUROPEAN CHICKEN CONSUMPTION 53 |
| 9. Forecasts 55 |
| INTRODUCTION 55 |
| The Economy 55 |
| FORECASTS 2003 TO 2007 55 |
| Poultry 55 |
| Table 23: Forecast UK Retail Sales of Poultry by Value at Current Prices (£m at rsp), 2003-2007 56 |
| Chicken Restaurants 56 |
| Table 24: The Forecast UK Chicken Restaurants Market by Value at Current Prices (£m at rsp), 2003-2007 56 |
| FUTURE TRENDS 57 |
| Demographic and Socio-Economic Trends 57 |
| New Product Developments 57 |
| Terrorist Threats 57 |
| Further UK Industry Rationalisation 57 |
| 10. Company Profiles 58 |
| Bernard Matthews LTd 59 |
| Birds Eye Wall's LTd 61 |
| Grampian Country Food Group Ltd 63 |
| GW Padley Holdings Ltd 65 |
| Kentucky Fried Chicken (great Britain) Ltd 67 |
| KERRY gROUP PLC 69 |
| Sun Valley Foods Ltd 71 |
| 11. Further Sources 73 |
| Associations 73 |
| Publications 73 |
| General Sources 73 |
| Bonnier Information Sources 74 |
| Government Publications 75 |
| The UK poultry market, as defined by this report, includes sales of poultry and poultry products through retail outlets, as well as the sale of poultry-based meals and snacks eaten in chicken restaurants and other catering outlets. Both sectors have been dynamic in recent years, as chicken and other poultry have benefited from consumer demands for healthier alternatives to red meat and for more convenience foods. |
| Retail sales of poultry and poultry products were estimated at £2.74bn in 2002, an increase of just 1.2 percent at current prices on 2001. However, retail poultry prices fell towards the end of 2002, so real market growth was higher than this. |
| The chicken restaurant sector showed strong growth throughout the 1998 to 2002 review period. Sales reached £488m in 2002, an increase of 5.6 percent at current prices on the previous year. |
| Retail poultry sales outperformed sales of most other meats in the 5 years to 2002. They fall into three categories: fresh, cooked and frozen. Fresh poultry is by far the largest category, but sales of fresh whole birds are declining as new products, such as poultry strips and chunks, cater for the growing need among busy consumers for quick-cook solutions. Added-value whole bird varieties, such as basted and glazed birds, are taking sales from traditional whole birds. The cooked chicken sector is the smallest, but it has been showing strong growth, boosted by the performance of the chilled ready-to-eat sector. Sales of frozen poultry have shown the weakest growth, but within that sector, flavoured chicken, children's products and new varieties, such as duck-based meals, are currently the best performers. |
| Outlet expansion by the leading players, the improved siting of outlets, more family-style restaurants and consumers switching from burger outlets have all helped chicken restaurant sales. Chicken is also an important menu item in many other catering outlets, especially ethnic food outlets, sandwich shops and pub restaurants, and the expansion of outlets in these catering sectors will drive further sales growth. |
| The poultry-processing industry is populated by a number of large, vertically integrated processors, plus some specialist producers, and poultry breeders and rearers. Most of the UK supply comes from domestic production, but lower-priced imported products are taking an increasing share of the market. The emergence of countries such as Brazil and Thailand as major low-priced producers poses some threat to the UK industry. |
| As the retail poultry market reaches saturation point, further growth is likely to come from more added-value products, and emerging sectors such as duck-based products. The chicken restaurant market is likely to continue to expand, driven by further store openings by the major players. |
| EDITORIAL NOTE: Please note within this report that Bird's Eye Wall's Ltd changed its name to Unilever Ice Cream & Frozen Food Ltd on 14th April 2003. |
Text © 2003 Key Note
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Last updated by Amanda Porteous July 2003
