Sector Trend Analysis – Meat (fresh and processed) in the Philippines

The Philippine consumer^{Footnote 1}, ^{Footnote 2}

According to Euromonitor International, the consumer market in the Philippines is set to benefit from growing urbanisation, an expanding industrial sector and gradually reducing poverty levels. Income level growth in the Philippines is set to outperform the global average, with per capita gross income more than doubling over 2020 (US$2,756.7) to 2040 (US$12,639.5) in the country. The growth is expected to be driven by the government's expansionary fiscal programme, rising foreign investment, an improving labour market situation, and robust economic activity.

Middle youth (aged 30-39) were the highest income earners, (aged 30 to 34; US$5,088.1 - aged 35 to 39; US$4,994.2) in 2020 and are to maintain the leadership position throughout to 2040, enjoying their higher levels of education and developing careers in international companies. Meanwhile, young adults (aged 15 to 24) are set to register the steepest increase (aged 15 to 19; 306.7%, aged 20 to 24; 304.6%) in their average gross income levels over 2021 to 2040, increasing their significance across Filipino consumer markets.

Social classes D, the number of individuals with a gross income between 50.0% and 100.0% of all individuals aged 15+, (25 million) and social class E, less than 50.0% of an average gross income of all individuals aged 15+ (30 million) were the largest social classes in the Philippines in 2020, illustrating the country's struggles in the fight against high poverty levels. Social class E is to remain prevalent in 2040, accounting for 37.5% of the total population aged 15+. However, social class C is forecast to expand at the fastest pace (34.4%) across social classes through to 2040, expanding the lower-middle class consumer market.

Private consumption in the Philippines is set on a steep growth path over the outlook period (to 2040) due to rising employment and remittance inflows. Further, on average, Filipino consumers spent more than half of their budget on essential spending, such as food, housing and transport in 2020. Rural consumer expenditure levels are to increase at a faster pace compared to urban consumer expenditure, illustrating market potential outside the large urban areas in the Philippines.

The Philippine population is expected to reach 136 million by 2040 making the country the sixth largest in the Asia-Pacific region. With a surging population and rising middle class, the Philippines represents a progressively increasing consumer market upon its emergence from the pandemic yet, high levels of income inequality will limit consumer spending power for many.

Ageing is set to accelerate between 2020 and 2040 as life expectancy increases due to improving healthcare and living standards while birth rates decline as women increasingly focus on education and working. Despite these factors, the Philippine population will remain relatively young in comparison to the surrounding Asia-Pacific regional context.

Meat and livestock production in the Philippines

The Philippine's primary meats for production are pork and chicken, producing 1.5 and 1.4 million tonnes respectively in 2020. All meats (pork, chicken, beef, buffalo and goat) experienced declining annual growth rates ranging from 6.1% to 14.4% from 2019 to 2020, while chicken production experienced the only positive increase in compound annual growth rate (CAGR) of 2.9% as volume increased from 1.2 million tonnes in 2016 to 1.4 million tonnes in 2020. Beef production in particular, experienced the largest declines in CAGR (11.2%) as volume declined from 184,105 tonnes in 2016 to 114,563 tonnes in 2020.

Chickens and pigs are the Philippine's primary livestock, producing 178.3 and 12.8 million heads respectively in 2020. Only chicken and buffaloes experienced declining annual growth rates of 4.3% and 0.3% from 2019 to 2020, as well as declining CAGR's of 0.1% respectively. Ducks in particular, experienced the largest increase in CAGR (2.9%) as volume of livestock production increased from 10.5 million heads in 2016 to 11.8 million heads in 2020.

Global and Association of Southeast Asian Nations trade overview

The global market for meat has experienced positive growth and increased at a CAGR of 5.7% as imports have increased from US$125.0 billion in 2016 to US$165.0 billion in 2021. In 2021, China was the largest market for meat with imports valued at US$31.6 billion, followed by Japan with meat imports of US$14.2 billion and the United States with imports valued at US$13.4 billion in 2021.

The Philippines was the seventeenth largest market for meat in the world with imports valued at US$2.0 billion in 2021, representing a moderate increase in CAGR of 15.3% from US$957.2 million in 2016. The Philippines also experienced the largest annual growth increase (87.2%) of the top 10 global markets as meat imports increased from US$1.0 billion to US$2.0 billion in 2020-2021. In comparison, Canada was the twelfth largest market with meat imports of US$3.3 billion in 2021, with a CAGR of 2.8% from meat imports of US$2.9 billion in 2016.

The Association of Southeast Asian Nations (ASEAN) market for meat has also experienced positive growth attaining a CAGR of 5.7% as imports increased from US$228.1 million in 2016 to US$301.0 million in 2021. In 2021, Singapore was the largest market for meat with imports valued at US$151.3 million, followed by Malaysia with meat imports of US$138.0 million and Thailand with imports of US$5.2 million in 2021.

The Philippines was the fourth largest market for meat in the ASEAN region and experienced the largest CAGR of 26.7% as imports increased from US$1.5 million in 2016 to US$4.9 million in 2021. The Philippines also experienced the largest increase in annual growth (48.5%) of the top ASEAN markets as meat imports increased from US$3.3 million in 2020 (to US$4.9 million in2021).

Philippine's trade summary

The Philippines had a diverse supply network of meat products. In 2021, the top three suppliers of meat to the Philippines were Brazil (US$385.8 million, 232.5 million kilograms), the United States (US$359.4 million, 246.3 million kilograms) and Canada (US$220.1 million and 150.1 million kilograms).

Top imported meat products to the Philippines in 2021 were frozen, boneless meat of bovine (HS code 020230) valued at US$502.4 million, 148.8 million kilograms, followed by frozen cuts and edible offal of fowls (HS code 020714) valued at US$445.4 million, 408.9 million kilograms and frozen pork, bone in (HS code 020329) valued at US$324.1 million, 185.3 million kilograms.

Canada's performance

The Philippines was the seventeenth largest global market for meat with imports valued at US$2.0 billion in 2021, representing a moderate increase in CAGR of 15.3% from US$957.2 million in 2016. Of the US$2.0 billion meats imported by the Philippines, Canada was the third largest supplier (representing a 11.3% market share) with imports valued at US$220.1 million, 150.1 million kilograms in 2021. Top meat imports from Canada were frozen pork, bone in (HS: 020329) valued at US$71.0 million, 39.3 million kilograms, followed by frozen hams (pork), bone in (HS code 020322) valued at US$55.0 million, 34.4 million kilograms, and edible offal (pork), frozen (HS: 020649) with values of US$34.9 million, 27.0 million kilograms in 2021

Canada exported US$281.8 million, 162.0 million kilograms of meat to the Philippines in 2021. The top meat supplying Canadian provinces were Québec, Manitoba and Alberta occupying market shares of 58.6%, 13.9% and 10.4% respectively in 2021. Top meat exports from Canada to the Philippines were frozen pork, bone in (HS code 020329) with values of US$139.6 million, 68.2 million kilograms, frozen hams (pork), bone in (HS code 020322) valued at US$ 59.4 million, 31.4 million kilograms, followed by edible offal (pork), frozen (HS code 020649) with values of US$28.8 million, 17.2 million kilograms, and frozen cuts and edible offal of fowls (HS code 020714) with values of US$27.4 million, 29.4 million kilograms in 2021. At the time of this report's writing, work is ongoing with the Philippine regulatory agency to negotiate on a zoning arrangement that would enable Canada to resume exports of live poultry, day-old-chicks and poultry meat to the Philippine market.^{Footnote 3}

Retail sales of fresh meat

Global retail sales of fresh meat

Global retail sales of fresh meat (fresh, raw, uncooked and unprocessed meat [beef & veal, lamb, mutton & goat, pork, poultry and other meat] whether packaged or unpackaged, chilled or frozen) have increased 3.6% in CAGR from US$745.8 billion in 2016 to US$890.3 billion in 2021 and are expected to increase in CAGR by an additional 5.9% as retail sales attain US$1.2 trillion by 2026. China was the largest global market with retail sales of US$199.2 billion (22.4% market share) , followed by the United States (U.S) with retail sales of US$89.9 billion (10.1% market share)and Brazil with retail sales of US$60.7 billion (6.8% market share) in 2021.

The Philippines was the twenty-seventh largest global retail sales market for fresh meat, after Morocco, with retail sales of US$6,663.6 million in 2021, representing a 0.7% market share in 2021. The Philippines experienced a slight decline in CAGR of 0.2% as retail sales decreased from US$6,727.9 million in 2016, however, the country is expected to moderately recover with a positive increase in CAGR of 8.4% in the forecast period as retail sales are expected to increase to US$10.0 billion by 2026. In comparison, Canada was the nineteenth largest retail sales market for fresh meat, accounting for a 1.3% retail sale market share with values of US$11.8 billion in 2021. Similarly, Canada is also expected to achieve positive growth with an increase in CAGR of 2.8% in the forecast period as retail sales are anticipated to increase to US$13.5 billion by 2026.

ASEAN retail sales of fresh meat

ASEAN retail sales of fresh meat have increased 4.8% in CAGR from US$27.6 billion in 2016 to US$35.0 billion in 2021 and are expected to increase moderately in CAGR by an additional 9.3% as retail sales attain US$54.5 billion by 2026. Vietnam was the largest ASEAN market for fresh meat with retail sales of US$12.4 billion (35.4% market share) , followed by Thailand with retail sales of US$7.1 billion (20.4% market share) and the Philippines with retail sales of US$6.7 billion (19.1% market share) in 2021.

Retail sales of fresh meat in the Philippines

Pork was the Philippines largest sub-category of fresh meat accounting for a 54.8% market share of total fresh meat retail sales (US$3.7 billion), followed by beef and veal with retail sales of US$1.5 billion (22.4% market share) and poultry with retail sales of US$1.3 billion 19.9% market share) in 2021. Pork experienced the largest increase in annual growth (20.7%) as retail sales increased from US$3.0 billion to US$3.7 billion from 2020-2021. Due to the recent limited supply of pork and restricted imports, the prices of pork increased, which eventually prompted the government to enforce a price cap on the retail of fresh pork.^{Footnote 4}

In contrast, the poultry sub-category experienced the largest decline in annual growth (23.0%) as retail sales declined from US$1.7 billion to US$1.3 billion from 2020-2021. Of interest, the lamb, mutton and goat sub-category experienced the largest increases in CAGR (9.8%) as their retail sales increased from US$106.2 million in 2016 to US$169.3 million in 2021.

In the forecast period, total fresh meat retail sales are expected to increase in CAGR by 8.4% reaching US$10.0 billion by 2026. The beef and veal sub-categories are expected to experience the largest increase in annual growth (13.5%) as retail sales increase from US$1.5 billion to US$1.7 billion from 2021-2022, and attain a moderate increase in CAGR of 10.1%% as retail sales of beef and veal reach US$2.4 billion by 2026.

Volume sales of fresh meat in the Philippines

Total volume sales (retail, foodservice and institutional) of fresh meat were 2.9 million tonnes in 2021. Pork was the largest sub-category of fresh meat in the Philippines with volume sales of 1.3 million tonnes, followed by poultry with volume sales of 1.2 million tonnes and beef and veal with volume sales of 414.3 thousand tonnes in 2021. All categories of meat experienced positive volume sale increases in annual growth ranging from 5.2% to 15.2%. The other meat sub-category experienced the largest increase in annual growth (15.2%) as volume sales increased from 15.1 thousand tonnes to 17.4 thousand tonnes in 2020-2021. Of interest, all sub-categories of meat experienced positive increases in CAGR's (with the exception of pork which experienced a decline in CAGR of 3.0% from 2016 to 2021). The poultry sub-category experienced the largest increases in CAGR of 4.2% as volume sales increased from 976.0 thousand tonnes in 2016 to 1.2 million tonnes in 2021.

In the forecast period, total volume sales of fresh meat are anticipated to increase in CAGR by 5.7% to attain 3.9 million tonnes by 2026. All sub-categories of fresh meat will experience positive growth in volume sales within the Philippine market. The pork sub-category in particular, is expected to experience the largest increase in annual growth (13.2%) as volume sales increase from 1.3 million tonnes to 1.5 million tonnes from 2021-2022, while the beef and veal sub-category are expected to experience the largest increases in CAGR (5.8%) as volume sales attain 545.6 thousand tonnes by 2026 (from 414.3 thousand tonnes in 2021).

Retail sales of processed meat

Global retail sales of processed meat

Global retail sales of processed meat (shelf stable meat, chilled processed meat and frozen processed meat) have increased 4.1% in CAGR from US$145.4 billion in 2016 to US$177.4 billion in 2021 and are expected to increase in CAGR by an additional 4.0% as retail sales attain US$216.3 billion by 2026. The United States was the largest global market for processed meat with retail sales of US$33.3 billion (7.5% market share), followed by China with retail sales of US$13.3 billion (6.9% market share) and Germany with retail sales of US$12.3 billion (6.9% market share) in 2021.

The Philippines was the eighteenth largest global retail sales market for processed meat, after Belgium and Norway, with retail sales of US$1.9 billion in 2021, representing a 1.4% market share in 2021. The Philippines experienced a moderate increase in CAGR of 10.6% as retail sales increased from US$1.1 billion in 2016 to US$1.9 billion in 2021. The country is expected to continue to increase in CAGR by 4.2% in the forecast period as retail sales are expected to increase to US$2.3 billion by 2026. In comparison, Canada was the tenth largest retail sales market for processed meat, accounting for a 1.1% retail sales market share with values of US$4.3 billion in 2021. Similarly, Canada is also expected to increase in CAGR by 1.9% in the forecast period as retail sales are anticipated to increase to US$4.7 billion by 2026.

ASEAN retail sales of processed meat

ASEAN retail sales of processed meat have increased 7.9% in CAGR from US$3.0 billion in 2016 to US$4.3 billion in 2021 and are expected to increase in CAGR by an additional 6.4% to US$5.8 billion by 2026. The Philippines was the largest ASEAN market for processed meat with retail sales of US$1.9 billion (5.4% market share), followed by Indonesia with US$1.2 billion (3.4% market share) and Malaysia with US$437.3 million (1.3% market share) in 2021.

Retail sales of processed meat in the Philippines

Processed meat, as a staple food, strengthened in 2020 as it benefitted from increased meal occasions at home. Rice, bread and noodles which form part of the main meals among Filipinos, are usually accompanied by different kinds of protein such as fish, chicken or beef. As such, these products have benefited from a shift in consumption away from foodservice channels to the home. Product stabilization is expected to continue as no major shifts in consumer lifestyles were anticipated in 2021.^{Footnote 5} Further, staple foods such as processed meat, seafood and meat alternatives are appreciated for their general affordability and convenience.

Chilled processed meat was the largest sub-category of processed meat with retail sales of US$714.2 million, followed by frozen processed meat with retail sales of US$704.0 million and shelf stable meat with retail sales of US$453.0 million in 2021. Of the chilled, frozen and shelf stable sub-categories, retail sales for processed red meat were the highest, followed by retail sales of processed poultry from 2016 to 2021.

Shelf stable meat (processed red meat) experienced the largest increase in annual growth (7.7%) as retail sales increased from US$417.7 million to US$450.0 million from 2020-2021. Shelf stable processed red meat also experienced the largest increase in CAGR (11.3%) as retail sales grew from US$263.7 million in 2016 to US$450.0 million in 2021.

In the forecast period, the chilled processed red meat sub-category is expected to experience the largest increase in annual growth (4.7%) as retail sales increase from US$702.7 million to US$735.4 million from 2021-2022, and an increase in CAGR of 4.4% is anticipated as retail sales of the sub-category attain US$872.5 million by 2026.

Of note, over the forecast period, there is expected to be a gradual shift of consumer lifestyles back to pre-COVID-19 times, which could decrease meal occasions at home which could effect the demand for processed meat at retailers.^{Footnote 4} Further, processed meat alternative proteins such as seafood and meat-free (plant- based), are likely to be continually explored by companies as these protein types could also help address the growing consumer demand for healthier food choices, as white meat is considered healthier than red meat.^{Footnote 4}

Competitive landscape

In 2021, the top processed meat company in the Philippine market was San Miguel Corp with retail sales of US$852.2 million representing a 45.5% market share, followed by CDO Foodsphere Inc with retail sales of US$332.8 million and a 17.8% market share. Of note, private label processed meat companies represented a 3.5% market share in 2021.

Within the sub-categories of processed meats, San Miguel Corp was the largest retailer for each (chilled, frozen and shelf stable processed meats) with retail sales of US$379.2 million (53.1% market share), US$335.0 million (47.6% market share) and US$138.0 million (30.5% market share) respectively, in 2021. In comparison, the company CDO Foodsphere Inc, as the second largest processed meat company, attained retail sales of US$141.5 million (19.8% market share) in the chilled processed meat sub-category and in the frozen processed meat category, reached retail sales of US$127.0 million (18.0% market share). Century Pacific Food Inc was the second largest shelf stable meat company with retail sales of US$135.6 million (29.9% market share) in 2021.

Volume sales of processed meat in the Philippines

Total volume sales (retail and foodservice) of processed meat was 470.1 thousand tonnes with retail sales (volume) of processed meat accounting for an 85.4% market share in 2021. Further, retail sales (volume) of processed meat within the chilled, frozen and shelf stable sub-categories accounted for a 91.6%, 71.9% and 94.9% market share in 2021. Of the processed meat sub-categories, chilled processed meat was the largest with volume sales of 186.9 thousand tonnes, followed by frozen processed meat with volume sales of 165.9 thousand tonnes and shelf stable meat with volume sales of 117.4 thousand tonnes in 2021.

All sub-categories of processed meat retail and foodservice volume sales experienced positive increases in annual growth as restrictions to limit the spread of COVID-19 were lifting. Foodservice sales (volume) in general, experienced slightly larger increases in annual growth (2020-2021) in comparison to retail sales (volume) in all sub-categories (with the exception of shelf stable meat). In particular, foodservice sales (volume) of frozen processed meat experienced the largest increase in annual growth (6.4%) as volume sales increased from 43.9 thousand tonnes to 46.7 thousand tonnes from 2020-2021. Overall, foodservice sales (volume) when compared to retail sales (volume), experienced declines in CAGR from 2016 to 2021 (due most likely to the imposed restrictions/closings placed upon the foodservice channel by COVID-19). Further, retail sales (volume) of shelf stable processed meat experienced the largest increases in CAGR (9.2%) as volume sales increased from 71.8 thousand tonnes in 2016 to 111.3 thousand tonnes in 2021.

In the forecast period, total volume sales of processed meat is expected to increase in CAGR by 3.0% to attain 545.2 thousand tonnes by 2026. Similar to the historic period, all sub-categories of retail and foodservice processed meats are anticipated to experience positive annual growth in volume sales. Of interest, the foodservice channels are anticipated to attain larger annual growth in volume sales (13.3%, 12.1% and 13.5% respectively) due most likely to the easing of foodservice COVID-19 restrictions, when compared to retail annual growth in volume sales from 2021 to 2022. Relatedly, foodservice channels are expected to experience larger increases in CAGR's in comparison to expected retail sales (volume) as placed pandemic restrictions are gradually removed within the forecast period. In particular, foodservice sales (volume) of frozen processed meat is expected to attain a CAGR of 11.8% as volume sales increase to 81.4 thousand tonnes by 2026 (from 46.7 thousand tonnes in 2021).

Product trend analysis^{Footnote 6}

According to Mintel, convenient formats of meat and poultry products are gaining traction in Asia-Pacific to help consumers simplify and speed up the cooking process at home. In particular, processed meats serve as a convenient and flavoursome meal component to supplement home-cooked meals.

However, growing health concerns and the 'clean eating' trend could challenge the processed meat industry. Trends indicate that poultry products, as a leaner source of protein, are highlighting better-for-you features, such as low fat and high/added protein to encourage consumption and improve the health image of processed meat.

New product launch analysis

According to Mintel's Global New Products Database (GNPD), there were 1,329 new meat and meat food products launched as an ingredient search, in the Philippines between January 2017 and May 2022. The number of yearly product launches has increased in growth by a CAGR of 1.1% from 234 meat and meat products as an ingredient, launched in 2017 to 244 meat and meat products in 2021.

Processed fish, meat and egg products, meals and meal centers and snacks were the top sub-categories of newly released meat and meat product (as an ingredient) launches while ease of use, microwaveable and social media were top claims associated with new meat and meat products as an ingredient, released during the prescribed period.

The top packaging types included flexible (414 products), skinpack (277 products) and can (184 products), while nearly half of the new product launches were released as new variety/range extension (657 products), new packaging (327 products) and new product (237 products) released between January 2017 and May 2022. Unflavoured/plain, cheese and pork were top flavours (including blends), while pork, beef and chicken meat were top ingredients identified during this period.

Examples of new products

Opportunities for Canada

The demand for fresh and processed meat as a predominant staple food to the Filipino consumer, is expected to continue, and evolve as the country emergences from the pandemic.  Fresh and processed meat can offer better-for-you features such as low fat and leaner source proteins which address the growing consumer requirements for healthier and clean eating food choices (e.g., white meat such as chicken, is considered healthier than red meat) as well as the affordability and convenience offered by processed meat.  As such, there remains substantial opportunity for Canada to increase its presence in the Philippine market as suppliers of safe and high- quality fresh meat, and value-added processed meat and meat products.  That said, it remains important for Canadian suppliers to work closely with their importing partners to ensure that the Philippine’s import requirements are met.  It is also important to note and appreciate the value of commitment, and market development efforts needed to further access the Philippine market in relation to competitors who may yield a price competitiveness and freight advantage due to their proximity.

Canadian suppliers interested in exporting meat and meat products to the Philippine market are encouraged to review the Philippines – Export requirements for meat and poultry products page provided by the Canadian Food Inspection Agency (CFIA).

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Find a Trade Commissioner

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Resources

• CANSEA; Agri-Food Update. Issue 45; July-September 2022, page 7
• Euromonitor International, Country Report. Philippines in 2040: The future demographic, April 6, 2021
• Euromonitor International, Country Report. Processed meat, seafood and alternatives to meat in the Philippines, December 2021
• Euromonitor International, Country Report. Staple foods in the Philippines. December 2021
• Euromonitor International, Income and Expenditure: The Philippines, November 30, 2021
• Global Trade Tracker, 2021
• Mintel, A year of innovation in meat & poultry, 2021
• Mintel Global New Products Database, 2022

Sector Trend Analysis – Meat (fresh and processed) in the Philippines
Global Analysis Report

Prepared by: Laurie Bernardi, International Market Research Analyst

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