Bird flu is generally perceived as an Asian, or latterly European, problem. Yet it could strike North America within months. Consumers will be concerned and may eat less poultry. No need to panic, argues Sylvain Charlebois.
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It is only a matter of time before avian flu hits domestic retail sales of poultry products and world trade with other countries. Although consumers cannot contract the avian flu by ingesting poultry products, its consumption has begun to fall – already by more than 10% in some parts of Europe – as fears grow over the spread of bird flu, despite official assurances that poultry remains safe to eat. Many experts believe that the avian flu will strike the North American continent within months, perhaps weeks.
Although concerns over the safety of poultry products are misplaced, they clearly do exist for consumers. But, when it comes to trusting its food supply, Canadian consumers are beyond compare – a trust that will serve well in a poultry crisis. Given this history of trust in the food supply, the real potential for crisis in the Canadian poultry industry is in loss of birds to the spread of the infection. But, again, Canada, by virtue of geography, may just have an advantage in averting this crisis.
The one mistake that cannot be made, however, is to assume that crisis aversion ought to be a primary driver for the food industry. Crisis is inherent to any major marketing system, and the key is to build in mechanisms to cope with crisis and to look for opportunities to safeguard against it. To treat crises such as BSE and avian flu as signposts of malignancy in the practices of a food industry is to render the industry unable to respond to the everyday concerns for the health and safety of the consumer.
Canadians showed resilience when faced with BSE
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By GlobalDataFrom 2003 through 2005, Canada became the only country in the world to see its domestic consumption of beef increase after discovering a first native BSE case. It took almost four months; from the time the ailing animal in Alberta was slaughtered on 30 January 2003, until the actual BSE test on 16 May, and yet Canadian consumers were still buying beef.
Canadian consumers’ perceptions were influenced by inherent trust in government when it comes to food safety. Arguably, Canadian consumers make a clear distinction between politicians and the functionality of our public administration. Reports show that beef consumption remained high in the wake of the Canadian BSE outbreak because consumers believed that authorities, and the CFIA (Canadian Food Inspection Agency) more specifically, were taking proper actions, and they believed that the meat was safe.
Chicken industry robust
As far as a similar crisis in the chicken industry goes, there is little comparison between the two industries. Chicken, unlike beef, has seen its domestic consumption in Canada grow steadily for the past 20 years. Canada also ranks ninth among the world’s countries in terms of chicken consumption per capita. Compared with beef, chicken is an affordable source of protein, and retail prices for chicken are becoming cheaper every year for consumers. The cost of producing poultry has steadily declined as a result of improved technology and genetics. The chicken industry has also been able to capitalise on the ongoing popularity of easy-to-prepare and ready-to-eat chicken products with time-conscious consumers.
In addition, the chicken industry’s make-up is very different from that of the cattle industry. Chicken, in Canada, is a domestic-oriented sector, as its domestic demand is always predicted and the anticipated market is divided up among farmers with quotas. This supply management system, of course, may represent an obstacle to entrepreneurial initiatives and to adapting production to economic conditions. Nonetheless, the poultry business has done well in Canada, as it has in many other parts of the world.
In terms of the marketing and management of the industry, the poultry industry is ripe with astute, responsive marketing ideas, and its managerial philosophy has served the industry well over the years. For a few years now, the Canadian poultry industry has worked on an On-Farm Food Safety Assurance Program that was implemented on every chicken farm across Canada.
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Professor Sylvain Charlebois |
At this point in time, there is no clear indication that would entice food marketers to believe that Canadian consumers will stop buying poultry products because of the avian flu pandemic. However, because of market dynamics and the inherent unpredictability of consumer behaviour, things can abruptly change. Many studies show that consumers, irrespective of where they live, have more trust in fruit and vegetables than meat products when it comes to food safety. However, through the BSE ordeal, Canadian consumers have shown that they have built up immunity to food-related risks and implicitly trust governing agencies. So, given the marketing and management strategies of the poultry industry, the industry’s independence of foreign markets, and the inherent Canadian trust in the food supply, there should be little for the Canadian poultry industry to fear in the way of a sales crisis. The key will be to ensure that this uniquely Canadian trust remains in force.
Apprehensive poultry farmers taking precautions
In the meantime, the poultry industry remains apprehensive. The potential for loss in terms of the spread of the infection through the chicken population remains high. But, for chicken farmers, the vast Canadian landscape could potentially become their salvation. In Saskatchewan, for example, where land is affordable and readily available, many industrial poultry barns have found safe havens in the prairies to protect themselves from the spread of avian flu. The geography reduces the potential for spread of the infection.
But, while some take shelter in wide-open spaces, many take refuge in blaming the industry and agitating for an untenable return to pre-industrial practices as a means of averting further crises. For such critics, the current system of intensive animal production is seen as the breeding ground for such potential catastrophes as pandemic avian flu.
Industrialisation a cornerstone of safe food chain
This is plain nonsense. Industrialisation was, and remains, necessary to ensuring both supply and quality – safety – on a daily basis. The food industry cannot function if it is crisis-oriented in the sense of placing the aversion of crisis above the concerns of everyday production and quality assurance. The poultry industry needs industrialisation to be able to meet demand and monitor the supply to guarantee its safety – regardless of any role it may play in encouraging crisis.
While the human impact of the avian flu cannot be dismissed, the bottom line is that we must risk the occasional development of such crises in order to have access to a plentiful, affordable, and safe poultry supply. The food industry simply needs to cope with the consequences of the realities of modern food production, and it is, one crisis at a time.
Sylvain Charlebois is assistant professor in marketing of the Faculty of Business Administration at the University of Regina, Saskatchewan, Canada.
