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Buying chicken with a smartphone: Tyson goes high-tech in China
[CHICAGO] Imagine picking up a pack of chicken drumsticks at the supermarket and scanning it with your iPhone to see exactly where the bird was slaughtered and when the meat arrived in the store cooler. For Chinese shoppers, chastened by years of food-safety scares, that's now a reality.
Tyson Foods Inc has added to some of its chicken products a quick-response code that can be scanned with a smartphone. The US company, which supplies one of every five pounds of meat eaten at home, has international ambitions and in China that means trying to entice consumers for whom the provenance of their food matters a great deal.
While Americans generally buy their meat from grocery stores, Chinese traditionally go to the local market. Many are still used to buying just-slaughtered chicken that's still warm, according to Tyson chief global growth officer Sally Grimes.
"The definition of fresh to the Chinese consumer is different," she said.
While national differences remain, Chinese patterns of consumption are evolving. The country is now the world's largest consumer of pork, the second-biggest for chicken and the No 3 for beef, as its emerging middle class eats more meat than its forebears.
And as they migrate to cities, they're buying more of it pre-packaged from a store. Despite the slowdown in emerging markets, China and India are expanding at a faster rate than the US and offer Tyson a chance to increase sales.
"You can't help but say, 'we better figure out the rest of the world,'" Ms Grimes said in an interview Feb 16.
Springdale, Arkansas-based Tyson gets about 13 per cent of its revenue from outside the US. It took a deep dive into where it could find growth opportunities after its 2014 acquisition of Hillshire Brands Co and found what it was looking for in China and India. Asian food sales growthis likely to exceed global increases through at least 2020, according to Euromonitor, as diets increasingly resemble those in developed nations.
The company is open to developing dishes internally or making deals for this expansion, Ms Grimes said. For time-strapped Chinese consumers, Tyson is offering frozen prepared foods such as New Orleans-style chicken wings that can be quickly sauteed in a pan. It's also working with e-commerce businesses to expand online food sales.
Tyson's business in China used to be focused on selling commodity meat to multinational restaurant chains such as Yum! Brands Inc. In 2014, it put its Chinese growth plans "in a holding pattern" after sales of allegedly out-of-date meat from another US supplier and avian influenza hurt demand.
The company's current approach in China mirrors efforts in the US, where over the last decade it has shifted from relying on commodity meat sales to providing more products that can charge a premium because they're cut, seasoned and packaged to fit changing consumer tastes and requirements.
Tyson is also making a push in India, where it's trying to expand an existing fresh-and frozen-chicken business and also move into other kinds of food. Its efforts there have included tracking ice cream shops in a bid to locate hard-to-find cold-storage capacity.
Ms Grimes declined to provide sales targets or projections for the international expansion other than to say Tyson is looking for "substantial growth".
"We are not going to do it overnight, and there is a lot of work ahead, but we are on a path," she said.