Food industry demonstrates willingness to adapt to changing markets

Should be lauded for building partnerships that work for all, especially for consumers

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INNSBRUCK, Austria Oct 30, 2015/ Troy Media/ – The food industry is showing signs it can change, and the timing couldn’t be better.

Animal proteins have been a dietary mainstay in much of the western world for thousands of years. But demand for processed and red meats has been declining for a number of years now, for a variety of reasons. The arguments against animal protein consumption continue to pile up – among them, higher prices, health concerns, animal welfare and sustainability.

And recently the World Health Organization announced that bacon, sausages and other processed meats can cause cancer, making the case for eating animal protein in general weaker.

However, the food industry has started to demonstrate its willingness to adapt to changing market demands.

Take McDonald’s Restaurants of Canada’s recent decision – in the face of consumers’ growing wariness about the use of antibiotics on animal farms – to procure antibiotic-free chicken. The non-therapeutic use of antibiotics in farm animals encourages antibiotic-resistant germs that ultimately threaten humans.

Last March, McDonald’s U.S. arm grabbed headlines by announcing that over the next two years it will phase out serving chicken treated with some antibiotics. McDonald’s U.S. has the corporate muscle to do practically anything it feels is right for its business. And this move makes sense in an era marked by supply chain transparency.

In Canada, though, things are very different, and so McDonald’s Canada’s approach was more guarded. McDonald’s is one of Canadian chicken farmers’ largest customers. (It is estimated that more than 400 million McNuggets are consumed annually in Canada alone.) McDonald’s said it wanted to evaluate purchasing chickens raised without antibiotics before making a decision since Canada’s farming landscape is strictly regulated by the Canadian Food Inspection Agency.

Then, after some months of investigation, McDonald’s Canada decided to go antibiotic-free.

In a supply management system like Canada’s, recognized farming practices help marketing boards set farm gate prices so that farmers are assured of a decent living. By limiting imports with high tariffs and controlling production through quotas, the system creates an equilibrium between supply and demand that would be much more difficult to achieve in an open market

However, altering codes of practice is always challenging in Canada since farmers are concerned about how markets will react to potentially higher prices caused by any change. We shouldn’t forget that chicken competes in the supermarket and on restaurant menus with other animal proteins like pork or beef. Price points are therefore carefully managed across the food chain. And for the most part, the existing system has served chicken farmers very well for decades.

Antibiotics have been used in chicken farming since the end of the Second World War, when protein production became a priority in North America. Their use was encouraged to prevent and treat diseases, keeping animals healthy and managing losses on farms. Antibiotics enhanced production and kept prices stable for consumers.

So for years, the economic rationale for using antibiotics was justifiable. But times are changing. We now know more about the impact of farm antibiotic use on consumers and that adjustments are necessary. So it’s “Back to the Future” in chicken farming.

While changing the code of practice in Canada for supply-managed commodities like chicken is difficult and slow, the industry can and should align itself with consumer expectations.

The same thing can be said about egg farmers. They decided to partner with McDonald’s Canada a few weeks ago to supply cage-free chicken eggs over the next decade. Addressing consumers’ concerns about animal welfare and their own health was simply the right thing to do.

Because of McDonald’s clout and market power, it will be easier for other restaurant chains to follow suit and work on new partnerships with farmers. Some have been asking in vain for such a change for years.

McDonald’s Canada and Canadian chicken farmers and egg producers should be lauded for building partnerships that work for all, especially for consumers.

Dr. Sylvain Charlebois is a Professor at the Food Institute at the University of Guelph. He is currently on leave at the University of Innsbruck in Austria. Sylvain is included in Troy Media’s Unlimited Access subscription plan.

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