Vice President Of PFG: How To Use Branding And Transparency To Improve The Profitability Of Poultry Farming?

- Aug 17, 2018 -

As consumers continue to call for transparency, branding is a key differentiator for companies seeking to increase poultry profitability.

“The call for transparency is real,” said Steve Sands, vice president of the Proteins Division of Performance Foods Group (PFG). “The retailers and marketers in the poultry industry cannot ignore this. I don’t want consumers to know more about food sources. The desire for information is quickly disappearing. Instead, food service companies need to adjust their entire supply chain to differentiate their products and tell the story of the product from farm to table."

On July 23, Sands gave a speech at the Chicken Marketing Summit in Orlando, Fla., and stressed: "We must be transparent; we must be willing to be transparent."

Research shows that consumers need transparency

Overall, Sands noted that 78% of consumers said that it is important for grocery stores and restaurants to provide information about how food is grown or raised.

However, transparency is not as simple as labeling chicken breasts as it comes from a chicken without antibiotics. Food service companies must further gain the trust of consumers by providing specific information on animal welfare, diet, poultry, transportation and production practices across the entire supply chain. According to Sands' data from Mintel, 43% of millennials do not trust large food companies as the main factors driving the transparency of the food industry. 78% said they want a more transparent understanding of how food is produced. This is very noteworthy. Mintel's data shows that Millennials have become the largest group of shoppers. If they believe that a company is engaged in unethical behavior, then 59% of consumers will stop buying a product, compared to 28% of millennials. Sands also emphasizes that the definition of “morality” varies from consumer to consumer, so it is important to understand who your real consumers are and which are branded accordingly.

How to adjust the supply chain

PFG sold more than 1.5 billion pounds of beef, pork and chicken in 2017, and PFG believes that true product differentiation is impossible until the supply chain is organized. Following this policy, the company has developed its own method of adjusting its supply chain to provide consumers with more transparent and quality-assured products. PathProven Food Tracking Technology ensures product traceability, auditability and compliance with a range of specific agricultural and processing standards to address consumer concerns such as antibiotic resistance, food safety, humane animal treatment, environmental and sustainability, feed ingredients Domestic production, livestock and poultry scale and “enterprise agriculture”.

Sands said the adjusted supply chain will allow consumers to benefit from transparency and provide opportunities for food service providers and retailers, such as increasing supplier profitability, achieving a more balanced overall plan, and tighter suppliers. Relationships and better supply ratios, etc. At the same time, he admitted that it was also very difficult. The need to leverage the entire poultry product, balance delivery dates and obtain customer purchases for specific project needs of different customers is a challenge that must be addressed throughout the supply chain.

Poultry brand opportunity

Sands recognizes that product branding is nothing new in the poultry industry, but it is becoming increasingly important in product differentiation.

He said: "It is not enough to just put a name on the box and then call it a brand. (Consumer) want to know how the brand is bred, how it differs from other products, and why it is in the public. different."

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He used the PFG Braveheart beef brand as an example. For the past four years, PFG's “Brand Protein Program” has driven all of the company's growth in this area. Sands specifically pointed out that PFG's total sales of Braveheart beef in FY2017 increased by more than 16%. Key: These brand proteins are “telling stories”.

According to Sands, PFG's Braveheart beef is produced in an organized supply chain that strives for superior quality, including agreements with manufacturers and packagers to ensure the quality and processing standards of cattle and to ensure product quality. In addition, part of PFG's “story” is the company's commitment to supporting cattle farmers to produce high-quality beef brands and directly compensate them.

As meat consumption, including poultry, stabilizes in the United States, Sands emphasizes that branding and marketing may play a greater role in driving future profit margins.

Sands said: "As meat consumption growth slows, brands become more and more important as profit margins begin to be driven by brands rather than consumption."

He believes that product differentiation does not only mean promoting new tastes, but it can mean something different for everyone; differentiation should include price, bird size, feed composition, geographic location, production and processing methods. The story of the producer, the credibility of the story, and product certification.

Sands concludes and emphasizes: “The brand will work, it can drive profits, the poultry industry has evolved to a critical stage, and branding will become more and more important.”