SECTOR REPORT

1 Extracted from ASIAN MEAT MAGAZINE – January/February 2016

Prepacked, branded meat makes

headway in Asia

I n mature Asian markets, prepacked

chilled and frozen meat have been making progress. In Japan, South Korea, Singapore, Hong Kong, Malaysia, Thailand, Indonesia, and China, it is typical to see chilled and frozen meat sold prepacked in supermarkets and meat shops. While this is mostly true in urban centres, better cold chain logistics have made these value-added products available even in areas outside of cities.

Joshua de Manuel, President of the Philippines’ JDM Meat Shop in Cebu Province, told Asian Meat Magazine that there are many ways in which meat can be packed. This can be done using loose, vacuum and shrink packaging with different materials such as cellophane, polyethylene, nylon, polypropylene, polyamide and other films. Sometimes, the meat is

As urbanisation spreads throughout Asia, its consumers are becoming more accepting of chilled and frozen meat, but at different paces in

various countries. While some consumers have embraced prepacked, precut and preweighed meat, others continue to cherry-pick. ISA Q TAN

and the ASIAN AGRIBIZ team take a look at how chilled and frozen meat are currently retailed around the region.

packed in styrofoam or preformed plastic and wrapped in clear cling-wrap.

Packing the meat this way protects it during handling and while on display, and prevents contamination. At the same time, customers are able to see what they are buying.

At many supermarkets and wholesalers in Indonesia, frozen and chilled meat are mostly packed in styrofoam and plastic wrap, already cut, weighed and priced. This convenience allows the buyers to simply choose the pack they want.

The meat is available in different portioned cuts. Chicken can be bought whole, or in portions like breast, thigh, wings and offal. Beef is available in premium cuts such as sirloin and loin as well as non-premium cuts and offal.

Chilled meats cuts sold in the Philippines are displayed in freezers or chillers.

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Especially for beef, the meat is available in the range of 200-500g per styrofoam pack, as this is the preferred weight of the buyers, one store supervisor in Jakarta told Asian Meat Magazine.

“Families in cities now have only three to four members. So the weight is just right and enough for them,” he added.

This is also true in Malaysia, where the standard procedure in supermarkets and meat shops is to display preweighed and prepacked meat in a variety of parts and cuts.

Lee Chi Soo, Manager of meat retail outlet Raw Meat, said pre-packaging keeps the meat safe.

“Chilled meat is good, and when meat is displayed in a chiller box, it needs to be packaged,” Mr Lee said. “If the meat is not covered or packed, the outer layer will dry out. Overall it promotes cleanliness as there is no drip.”

On a practical level, it is helpful for both staff and customers who are in a hurry.

Portion packaging of meat by standard cuts and weight is also the norm for chilled and frozen meat in India. Since a big part of the country lacks adequate public cold storage and refrigerated transport facilities, unpacked frozen or chilled meat is scarce in India.

Meat producers there also provide cold storage facilities such as refrigerators to store frozen or chilled meat, and this is a reason for the dominance of portion packaging in this sector.

In the retail market, India’s leading poultry players like Suguna and Venky’s offer meat products in various cuts and weights so that consumers have more choice.

“Unpacked frozen or chilled meat is used mainly by hotels in India as it is cost effective compared to the price of portion packaged ones,” J Kannappan, General Manager (Operations) of Hari Bhavanam Restaurants, told Asian Meat Magazine.

In Vietnam, (broiler) chicken

CXC Foods uses its packaging to entice children to give its “Pepper Steak Salad” a try.

J Kannappan

sold in cuts, weighed and packed and tagged with the supplier’s brand name, is increasingly popular in big cities like Ho Chi Minh and Hanoi, where there

is a growing young and middle class population. These consumers tend to spend less time in cooking and are influenced by western-style standards and cuisine.

On the other hand, native or backyard chicken are weighed and packed in whole carcass in supermarkets and convenience shops there.

Similarly, big integrators in the Philippines like San Miguel Foods Inc and Bounty Fresh Foods Inc sell chicken either whole or in portioned cuts. Whole dressed chicken is packed either in loose plastic packaging, especially if it still contains the entrails, or in vacuum packs.

Meanwhile, cuts are placed in styrofoam trays and wrapped in cling plastic. Additionally, however, unpacked portioned cuts are also available to allow consumers to select the specific parts and cuts that they want to buy.

Rapid growth in China

The Chinese chilled and frozen retail meat sector is growing rapidly as better cold chain logistics expand their scope and reliability.

Cold chain logistics are reaching second and third tier cities and even into large county towns, greatly expanding the potential consumer base. And where frozen and chilled meat is available, the growing number of consumers who can afford higher-quality products are turning away from shelf-stable preserved meats.

Chilled product sales are forecast to grow at an 8% annual rate for the next five years as chilled warehouses and transport expand. As for frozen

meat, in the past many Chinese consumers did not trust it, partly because there was so much foreign material that the meat had to be thoroughly defrosted so it could be cleaned. However, frozen meat quality has been improving rapidly.

Companies are taking advantage of new packaging and display technologies to produce more attractive, longer-lasting products. Modified atmosphere packaging (MAP) is becoming increasingly common for high-end chilled meat, such as Jingqishen’s organic black mountain pork, made from a native breed fed on acorns.

Henan Yongda uses advanced freezing and packaging technology to produce Individually Quick Frozen (IQF) products, including its traditional chicken gizzards, with a transparent back to give customers a look at what they are paying for.

Hondo Beef, also based in Chongqing, has used the new cold chain and packaging technology to expand distribution nationwide, including traditional products like its organic sliced oxtail. The package comes with a clear cutout that appeals to careful older shoppers who like to closely inspect their purchases.

3 Extracted from ASIAN MEAT MAGAZINE – January/February 2016

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CXC Foods has developed small beefsteaks for children, marketed in packaging designed to appeal to the younger set. The labelling on CXC’s ‘Pepper Steak Salad,’ a small flavoured steak packaged in slices that can be spread on a green salad, is written in large, uneven characters as if by a child.

The package is illustrated with a

cartoon drawing of a child with a fork – a formerly unusual implement for Chinese meals – and a cartoon cow munching on grass and saying, ‘Healthy growth is for me’.

Branding initiatives

With the move towards packaging meat, companies have begun branding initiatives to differentiate

Adding value & serviceMany retailers add value to entice consumers to buy chilled and frozen meat. One way this is done is to sell meat that has been processed slightly, such as marinated or prepared cuts that can be cooked directly.

In the Philippines, it is common to find meat retailers sell meat cuts that have been marinated for barbecue, processed into native sausage or sweetened cured meat. Still these are not packaged but buyers can just say how many pieces or how many kilos they need before they are packed in plastic. Some supermarkets may offer to vacuum pack these products.

Another way to add value is by providing additional service. In Malaysia, one advantage of shopping at a meat shop is the presence of

a butcher, who can cut the meat to suit the customers’ preference.“Customers can choose to take our prepacked products or they can

request for special cuts. We provide cuts for soups, curry or even particular types of cuisine such Japanese, Korean or French,” said Lee Chi Soo, Manager of meat retail outlet Raw Meat. By January 2016 Mr Lee hopes to open his sixth outlet.

Such additional service is also available in the Philippines and Vietnam. For Fresh Options, packing meat in styrofoam trays which are then cling

wrapped is an added service for their delivery customers.“Some of our customers who order for delivery specify that they want the

meat portioned,” said Anthony Lozano who is in charge of Fresh Options Meat Shops operations in Metro Manila.

“For example, they will buy 4kg of a specific meat cut, but they want it portioned into half-kilo packs so they are easy to store, we can do that for them,” Mr Lozano said.

He added that stores are equipped with cutting machine, so that walk-in customers can also ask for meat that they have chosen to buy to be cut accordingly.

Meat retailers add value to chilled products by doing some processing. These products are however, not prepacked.

their products from another. “Some would say meat is meat but

in this day and age, when there are many retailers of chilled and frozen meat, they want to make sure that buyers keep returning,” a produce merchandiser from a supermarket chain in the Philippines told Asian Meat Magazine.

Branding will help retailers do this, he added.

In Indonesia Save Max, the wholesale arm of Gunung Sewu Group that is operated by Emporium Indonesia, brands its products to differentiate them from others.

Teddy Margamulia, Category Manager of Save Max, told Asian Meat Magazine at its store in Cibubur, West Java, that meat product branding is important since it will attract buyers to return to their stores.

Save Max sells the Bonanza branded chilled beef produced by sister company Great Giant Livestock. To increase buyers’ awareness towards the brand, the retailer invites celebrity chefs to conduct cooking demonstrations at its stores.

“During the cooking demonstrations, we give out samples for customers to taste our cooked Bonanza beef, and explain to them its quality and uniqueness,” he said.

In addition, Save Max also provides flyers and decorates its meat sections with posters and standing banners of Bonanza beef.

“In future we may also put up a video at the meat section to show how Bonanza beef is produced at the farm, processed and distributed at

Jingqishen uses MAP technology to package its premium Black Mountain Pork Ribs.

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SECTOR REPORT

Save Max outlets,” Mr Teddy said.Sales of Bonanza beef is on the

rise, and Mr Teddy sees this trend continuing along with the growing number of Save Max outlets being opened in Indonesia.

The same promotion efforts are also given to its Delfarm branded chicken, produced by Gunung Sewu’s new subsidiary Sierad Produce.

Another retailer Transmart Carrefour is also adding value by branding its chilled meat products. The supermarket, part of CT Corp Group, promotes its meat products through TV commercials.

The campaign, which began in mid-2015, tells consumers that beef and chicken sold at all outlets are produced from cattle and chickens raised, processed and distributed according to good farming and processing practices and halal regulation via a cold chain system. This assures them of the products’ quality, safety and traceability.

“We want to make sure that buyers at our stores get quality meats at competitive prices, and supply, especially for beef, is assured,” the

company said on TV.In India, by providing cold storage

facilities to other retail outlets like supermarkets in addition to company-owned outlets, meat producers are also able to build up their brands. This helps companies like Suguna and Venky’s to further market their meat products.

Meanwhile, in the Philippines, some meat companies have already turned to institutionalised branding to tout the freshness, safety and quality of their meat.

“Fresh Options is no longer just the name of our stores, but is a brand of fresh chilled meat,” said Anthony Lozano, Regional Sales Head of RDF Feed, Livestock & Foods Inc and who is in charge of Fresh Options Meat Shops operations in Metro Manila.

“Our pork and chicken are produced by our sister company, Red Dragon Farm, so we can assure the customers of the quality of the meat.

We slaughter and deliver daily so the freshness of our products is assured,” Mr Lozano said.

Biotech Farm, a pig producer in Southern Philippines, already sells its pork under the Better Pork brand. The meat is sold exclusively at supermarkets in KCC Malls, which is a sister company of Biotech.

“It’s a move to institutionalise the

Teddy Margamulia (left) and Heru Parwoto, Assistant Category Manager – Fresh Food Department of Save Max.

Fresh chilled whole chicken carcass sold at a wholesaler in Indonesia. The carcass is packed

with plastic wrap and in a styrofoam tray.

Attractive presentation gives customers appetite for more

Besides slicing and packaging, attractive presentation of meat products is essential, whether laid out in round party or ovals, shaved meat or ham, single products or different products together in single packs or family portions.

Thanks to Weber’s innovative technology, individual and complex product presentations can be created fully automatic and without manual intervention – for maximum profit and minimum give-away.

Portions are precisely stacked or shingled, and shaved meat is laid out exactly to the gram. Adding interleaved paper and film is possible and if party trays are required, the slices can be set out in an oval or round circle.

In terms of fresh meat, for example steaks, slicing with a Weber Slicer, portioning, and then picking and infeeding by a Weber Pick & Place Robot by meeting highest hygiene requirements, each portion will reach the package safely.

The Weber Pick Robot/Shaved meat delivers precision and hygiene.

5 Extracted from ASIAN MEAT MAGAZINE – January/February 2016

SECTOR REPORT

brand,” said Dr Harold Eslabon of Biotech Farms.

Similarly, big companies also have brands that are now well known in the country. For example, San Miguel has its Monterey and Magnolia brands for red meats and chicken, respectively. Bounty Fresh has the Bounty Fresh brand, and Robina Agripartners has the Robina Farm brand.

For Raw Meat, however, it is not so much having a brand as a label. “We are just going with Raw Meat. This is the name of our business. As a responsible retailer I want to put a label on my product, and that’s it. We are in the butchering business and what is really important is quality, safety and freshness of our product,” Mr Lee said.

“To reach these goals our staff must be trained to handle meat well, to maintain the correct temperature and to have good cutting skills. If you can score here you will always have regular customers,” he added.

Cherry-picking

Unpacked and unweighed is still the dominant way chilled and frozen meat is sold in the Philippines. In many supermarkets, to minimise handling, servers wait for customers to point to the meat or cut they want, bag them in plastic, weigh and seal them before handing them to the customers.

The same is true in Vietnam, where consumers are still unaccustomed to using frozen meat due to concerns on quality and safety. News of bad quality frozen meat seized in markets worry them, and limited and out-of-date distribution infrastructure and cold chain facilities are big constraints to its acceptance.

Most meat products sold in Vietnam are fresh warm and chilled meat, and conventional consumption habits favour unweighed and unpacked products.

This is particularly true for pork. To illustrate, a leading meat producer in Vietnam, Vissan weighs, cuts, and packs meat according to each customer’s requirements at its meat outlets.

One of the reasons behind cherry picking is that most consumers, even in the urban areas, still believe that chilled, and particularly frozen, meat is not as fresh as warm meat.

“Many Filipino consumers still think the chilled and frozen meat is not fresh, because their concept of freshness is meat that has not been subjected to chilling or freezing and on which traces of blood can still be seen,” Mr de Manuel of JDM Meat Shop in Cebu Province said.

In wet markets, consumers are allowed to personally handle the meat and choose which part they want, after which the stall owner will cut that part and weigh it. This

habit is still carried over by many consumers who have since shifted to supermarkets and meat shops. Knowing this, many stores continue to satisfy this preference.

Another reason customers tend to cherry-pick is that many think they could get bad meat in prepacked products.

“Many customers still have this mindset that if they buy prepacked meat, they will find that inside there will be some not so fresh or not so good meat,” said Mr Lozano.

Such belief is understandable. When buying prepacked fruits or vegetables, many customers said that they have gotten some rotten ones inside. Ingrained in their mind, they also think the same will be true for meat.

Save Max sells Sierad Produce’s Delfarm branded chicken. Prepacked Bounty Fresh chicken cuts.

Anthony Lozano (left) and Dr Robert Lo of Fresh Options.

Extracted from ASIAN MEAT MAGAZINE – January/February 2016 6

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Cooking demonstration at Save Max outlet in Cibubur, West Java. A staff is seen offering cooked Bonanza beef to visitors.

“We tried to sell prepacked and preweighed meat cuts before, but customers ignored them,” related Mr Lozano. “Now we do a little bit of it in our modified retail concessionaires, which are supermarkets where we have a retail display, but sales is still quite low. We do it just to cater to a small segment that wants to buy that way.”

Meanwhile, some consumers only want to buy or only have enough money to purchase exactly what their household needs, and cherry picking allows them to do this.

Slow growth

While there will always be a demand for fresh warm meat, in the future, chilled and frozen meat will likely become the norm in most, if not all, of Asia, and in time to prepacked meat. Exactly when is difficult to say, but certainly the different markets have moved towards it, some faster than the others.

There are still some customers who will question the freshness of chilled and frozen meat, often thinking that chilled or frozen is old stock.

“It is tough to explain to consumers that we have to maintain the temperature of the raw meat. These customers prefer to shop at wet markets. Our stall still sees a steady flow of customers,” Mr Lee said.

In the Philippines, retailers see that acceptance of and demand for prepacked meat will grow, but slowly.

“We need to educate consumers about chilled and fresh meat, and also packaged meat,” said Dr Robert Lo, owner of RDF and Fresh Options.

Cost will also affect how fast acceptance will come. Better packaging technologies are expensive, and in a market that is still price sensitive, acceptance will be slow, except for the mature and high-end market that are willing to pay a premium for these products.

Mr de Manuel believes that acceptance of prepacked chilled and frozen meat in the Philippines will remain slow, and will be “directly proportional to the number of consumers that are informed”.

The same is seen to happen in Vietnam, as rising income and urbanisation sweep across the country. Consumer demand and priorities will likely move towards higher quality, diversified, innovative and convenient products, including packaged meat. Progress however will probably be slow, as the country still lacks an effective cold chain and many households do yet not have refrigerators.

In India, a franchisee of Suguna Daily Fresh opined that because “Indian consumers are not familiar with unpacked frozen or chilled meat, portion packaging will continue to dominate this market for a long time to come”.

New entrants to retail like SKM Animal Feeds and Foods India Ltd are focusing on portion packaging as Indian consumers are gradually

shifting towards frozen and chilled meat from the conservative yet dominant wet market.

“Sale of packed meat items are growing and we are sure that it is poised to reach new heights in the

next five years as more departmental stores are turning towards selling such products,” Pramod Menon, a retailer said.

According to him, frozen and chilled meat have also penetrated second tier cities and gained momentum. “Once public cold storage facilities are established in semi urban and rural areas of the country there is no looking back,” he added.

And in the region’s more mature markets, it is no longer a question of acceptance. The move is toward better technologies in packaging, such as MAP and IQF, to name a few that will ensure safety, freshness and quality of the meats. AM

Magnolia whole chicken packed in plastic.

Pramod Menon