The COVID-19 pandemic has led to recurring disruptions in business operations and supply chains in the Australian Poultry Processing industry. Ultimately, this trend has hindered potential sales and is anticipated to contribute to the industry’s falling profit margins. On the other hand, a forecast increase in poultry consumption over the next five years has sparked an opportunity for market players to capitalise on ongoing consumer demand as economic conditions improve.
Poultry consumption and industry performance
Industry revenue has increased at an annualised 1.9% over the five years through 2021-22. However, revenue is expected to decrease at an annualised 1.5% in 2021-22. Trends in poultry consumption affect the industry’s performance.
- Poultry is Australia’s most popular protein, but consumption has declined slightly over the past five years due to lower meat intake and an increase in vegetarian and vegan eating.
- Rising health consciousness in consumers has limited declines in poultry consumption, as poultry is generally considered healthier than other meats. This trend is anticipated to contribute to per capita poultry consumption increasing by 1.1% in 2021-22.
- Rising demand for premium and value-added poultry meat has supported industry revenue and growth.
The COVID-19 pandemic and associated lockdowns and restrictions reduced demand for poultry from the hospitality and food service sectors as consumers shifted from eating out to cooking at home. This trend supported an increase in demand from supermarkets, which account for 40.1% of industry revenue in the current year. Ongoing price competition among supermarkets has constrained poultry price growth and, in turn, industry revenue growth. Escalating external competition from substitute products, such as other sources of protein and plant-based alternatives, has also limited industry revenue growth.
Supply chain issues
The swift spread of the COVID-19 Omicron variant, which started to affect supply chains in late 2021, led to a national supply shortage of chicken in early 2022. In particular, labour-intensive products became scarce due to staff shortages at processing plants, which ultimately led to empty shelves in the poultry sections of supermarkets. Fast food giant KFC also issued an apology for their lack of chicken meat, as they were forced to reduce their menu’s size.
Ingham’s & Baiada Poultry
The two largest market players in the industry are Ingham’s Group Limited and Baiada Poultry Pty Limited, which together account for almost half of the industry’s market share. Ingham’s holds 27.9% of the industry’s market share, and its revenue is expected to increase at an annualised 3.4% over the five years through 2021-22, to $2.2 billion. Baiada Poultry holds 21.9% of the industry’s market share, and its revenue is expected to increase at an annualised 2.9% over the five years through 2021-22, to $1.7 billion.
Both players have underperformed the overall industry in nominal terms. However, Ingham’s and Baiada Poultry have extended their premium product range over the period in response to rising demand for free range and organic poultry meat from consumers. This change has supported revenue growth for both players.
Looking ahead
The Australian Poultry Processing industry is forecast to grow moderately over the next five years, as the economy is set to recover from the COVID-19 pandemic. While domestic demand for poultry is projected to increase, external competition from substitute products is forecast to constrain the growth of industry revenue and profitability. As a result, the Poultry Processing industry’s revenue is projected to grow at an annualised 0.7% over the five years through 2026-27, to $8.1 billion.
IBISWorld reports used to develop this release:
