“The turkey sector has become more mature”

Hendrix Genetics has had a rapid development. The company can now call itself one of the two world leaders in the field of turkey breeding. The company takes an ever-stronger position with integrated breeding and distribution as a supplier to vertically integrated production chains. Since the start of Hendrix Genetics, almost 11 years ago, Antoon van den Berg as CEO steered the course of the company.

How would you describe the turkey sector compared to 10 years ago?

“Worldwide, the sector has matured with more concentration, scaling and an increased efficiency. In Western countries, and certainly in North West Europe, the focus will be more on animal welfare, other parts of the world will follow that trend. Consumer trends are spreading much faster than before. The turkey is a weaker animal than a chicken. The higher dropout rate is something that needs attention.”

Breeding companies are also merging, what is your take on that?

“It is essential to be sufficiently large. After the acquisition of B.U.T. and Nicholas by the EW-Gruppe, there are two strong turkey breeding organisations. Aviagen EW-group and Hybrid Turkeys of Hendrix Genetics both cover about half of the market. In recent years, Aviagen was a bit bigger but the acquisition and integration of B.U.T. and Nicolas, has cost this company market share.

We also see concentration and scaling in the supply chain through greater integration. Individual hatcheries fade. We ourselves have bought hatchery Coolen last year to further strengthen our distribution network. This leads to a more integrated flow. The acquisition of the French Grelier a few years ago fitted into that vision.”

How does this benefit the turkey sector?

“A more efficient chain and transparent vertical column is beneficiary. But the vertical integration in turkey farming will certainly continue, we are only halfway there.”

Which trend do you detect in the turkey meat market?

“More than 80% of production in Europe takes place in five countries. In Europe, Germany with 19% is still the biggest producer but is closely followed by Poland and Italy. Because of stricter laws and regulations, the production in Germany is under pressure. If this trend continues, Poland will soon be the largest producer of turkey meat in the EU. Also in Spain there is an increase production. Outside of the EU, Russia is fast growing and can be self-sufficient by 2020.”

And consumption?

“The consumption of turkey meat in the EU is relatively low, except for Germany. We do not foresee growth in revenue. Turkey competes globally with broilers for the fillets and pork in red meat processed products. Growth opportunities exist in processed products. Turkey is an inexpensive and lean alternative to pork. Especially in Muslim countries we see a strong demand for turkey meat. Also in Eastern Europe and Russia demand is increasing, and partly at the expense of pork. In Africa, we see an increasing interest in turkey. It is a good alternative to more expensive beef and lamb.”

How is turkey rearing itself changed?

“Nowadays turkeys are slaughtered at higher weights. Weights of male turkeys from 22 to 24 kg are no exception. Ten years ago this was four or five kg less. This trend is especially yield-driven because the higher the weight the lower the processing cost per kilo and the higher the meat yield. But the high weights are an increasing problem from a welfare point of view. We are committed as a company not to the highest weights, but for the most efficient turkey for the entire production chain with balance reproduction, growth and slaughter characteristics. But in the end it is not the breeding company who determines the allowed weight, but the abattoirs and integrations.”

What’s the impact of that on your breeding?

“We have three bred varieties: the Hybrid Grade Maker (GM), the XL Hybrid and Hybrid Converter. The GM is the market that requires a lighter turkey, the XL sales channels for heavy turkeys. Both have about 10% market share within our range. The Converter is in between and is the most common. We can provide all three types of turkeys but are the least active in the markets for extremely heavy turkeys. Because this is a sub-optimisation. For us, efficiency and animal welfare are more important. We see emerging countries such as the Arab countries have more interest in medium but strong turkeys. So there are opportunities.”

How do you respond to the stronger focus on animal welfare?

“We have previously established a business unit named Traditional Poultry. This unit has specialised in several slow growing turkeys (also with different feather colours), which fit into special concepts. Just like the slow growing broilers, there is a ‘turkey of tomorrow’, as it is called in the Netherlands – this turkey not only grows a little slower but is also more robust, and has a better meat quality. In these markets we have better opportunities than our competitor. There is still a limited demand, but when it increases we can immediately supply.”

What are the important priorities for Hendrix Genetics in the years ahead?

“In all lines we focus on a robust turkey with a lower mortality rate that produces efficiently even with less traditional feed materials. Improvement is especially possible in mortality rate and in reproduction parameters. Turkey hens only produce 100 to 120 eggs per year and reproduction and slaughter and fattening properties are not in balance. That gets more attention in breeding but of course meat yield, meat quality and feed conversion stay key focus areas.”

What is the genetic potential for the future?

“We experienced a flywheel effect of the scaling in the sector. Through more turnover we have an increased R&D budget which gives an acceleration of genetic progress, which leads to higher sales and so on. In the current breeding you must have a big size as a company. That’s true for turkey breeding, as it is for other species. Without leading global market shares, investments in genetic progress is no longer profitable.”