Annual report 2018
Poultry is one of Marel’s three key protein industries. With the most complete product range in the industry and the largest installed base worldwide, Marel Poultry is a leading global provider of advanced food processing systems and services for broilers, turkeys and ducks. Marel Poultry contributed EUR 638 million in revenue in 2018, or 53% of total revenues, translating to an EBIT of 18.4%.
The consumer value of the global poultry, meat and fish market is currently estimated to be around EUR 1,200 billion, with the poultry market accounting for EUR 400 billion. More specifically for Marel, the market for sale and maintenance of food processing equipment for poultry, meat and fish is estimated to be around EUR 10 billion. Of this, poultry processing equipment sales are estimated at around EUR 3 billion, a figure which is expected to grow annually by 4-6%.
Marel Poultry continued to increase its strong world-wide presence in 2018. Despite challenging market conditions in various parts of the world, we completed a large number of significant projects around the globe during the year.
Our high-tech systems and services time and time again proved to be the preferred choice for customers dealing with local market requirements. For example, our ATLAS live-bird handling system has been a great success, with the solution currently operating in countries including Germany, the UK, France, Portugal, Spain, Australia, Canada and the USA.
Scarcity of human labor was a prominent trend across many markets in 2018. Poultry processors across nearly all regions, from China to South America, Europe to the US, are struggling to find skilled workers, particularly in countries where workers have access to multiple job opportunities in a variety of industries.
This limited access to skilled employees has been a key reason why poultry processors are investing in greater levels of automation. Marel Poultry offers innovative solutions that can automate and streamline processes throughout the plant, reducing reliance on human labor, while increasing throughput and yield.
In 2018, we worked in partnership with our customers to design fit-for-purpose solutions, ranging from modest plants to complete greenfield facilities. In response to processors’ demands, we optimized both efficiency and product quality by bringing automation to higher levels.
In 2018, Innova Food Processing Software became more integrated with Marel Poultry’s products. In today’s processing plants, sophisticated software is indispensable. Intelligent software is not only helpful in high-tech plants that process 15,000 birds per hour (bph), it can benefit any processing facility. Data-driven processors are able to reach higher performance levels and add value, resulting in less production loss and lower cost per product. Accurate data also facilitates quicker and more accurate decision-making.
By gathering data, Innova plays a major role in automation across all stages of the process. It enables processors to use this data to find the most efficient functioning of their machinery, allowing them to adapt to changing circumstances remotely and maintain a consistent product quality. With Innova, Marel is helping poultry processors around the globe to maintain a competitive edge in a challenging industry.
In 2018, Marel Poultry successfully added several further processing solutions to its range of primary and secondary poultry processing systems. We can now enable our customers to produce a wide variety of convenience foods rapidly and with high precision.
The highly automated further processing systems and solutions that we offer for poultry processors can be used for preparation, portioning and forming, coating, frying and cooking, but also for linking and peeling sausages and co-extrusion. Marel Poultry understands how processors think in this important part of the industry.
The 700mm wide Convenience Line for further processed products underwent a transformation in 2018.
The new, patented Helix Drum for the RevoPortioner was one important innovation in that line. In the Helix Drum, products are positioned along a helix shaped line, leading to continuous filling. The low-pressure method replaces the previous start-stop method and ensures an optimal and more consistent end product.
The combination of Helix Drum Technology with the new Active Batter Applicator, as well as the new RevoCrumb, unlocks opportunities for poultry processors. The crumb management of RevoCrumb guarantees perfect coverage of the product, keeping even the most vulnerable crumbs such as coarse panko and cornflakes, intact during processing.
In 2018, we introduced several new, innovative solutions that have helped advance the poultry production process. In partnership with our customers, our innovative developments resulted in numerous successful implementations of new concepts for the industry.
In 2018, Marel Poultry rolled out 15,000 birds per hour (bph) processing, an increase from the previous maximum speed of 13,500 bph. Given that the global population is growing steadily, and each year more people move from rural to urban areas, the demand for poultry is expected to increase considerably. To keep up with consumer demand, processing plants need to intensify their operations and improve both efficiency and speed.
At the same time, strong market pressure to lower production costs per bird without compromising quality requires increased levels of effectiveness, which is a significant challenge.
Marel Poultry is the world’s first supplier of integrated 15,000 bph lines. Reliability is paramount when dealing with such high speeds. The first plants to operate at 15,000 bph are located in Germany, with plants in the UK and elsewhere around the world soon to install the solution.
Marel invests around 6% of its revenues annually in research and development. As a leading innovator in the industry, we are committed to collaborating with companies and other stakeholders, which includes working closely with leading universities.
In 2018, Marel Poultry invested in the Dutch FlexCRAFT research program, co-operating with Wageningen University & Research (WUR), Technical University Eindhoven, Technical University Delft, University of Twente, and University of Amsterdam.
The objective of the FlexCRAFT research program is to develop robots that can deal with a large variety of agri-food products. The parties involved are aware that intelligent robots will play a significant role in the food industry in the near future, making it essential that we devise ways to utilize such robots for optimal efficacy.
Marel’s RoboBatcher marks a milestone in food processing automation. Similar robotic technology could be used to improve other processes in the poultry value chain, particularly for tasks such as planning, control, gripping, and manipulation.
We are committed to making our contribution to developing this technology. Through our participation in FlexCRAFT, we can support this development, particularly as one of the program’s three cognitive robot projects focused primarily on poultry processing.
As part of the continuous development of the RoboBatcher, this year we launched an improved version featuring refined and specialized grippers for fillets, drumsticks, and whole legs.
The new gripper design can place products into trays according to patterns chosen by the user and with minimal giveaway. With supermarkets insisting on attractive presentations, tray styling is a hot topic among our customers. Improvements in styling performance minimize the need for restyling after the product has been placed in the tray, which helps processors save on labor.
Another important achievement in our tray styling innovation is the ability to print lightweight 3D plastic components for our equipment. As the design of the jaws in the RoboBatcher required advanced engineering, we utilized 3D printing, giving our engineers design flexibility and allowing them to keep the weight of the equipment as low as possible.
As the RoboBatcher needs to move quickly with powerful acceleration forces, a heavy gripper could potentially slow down performance and risk damage. Our new grippers feature many 3D-printed, lightweight plastic parts with fewer bolted joints needed, making them also easier to clean.
Mergers and acquisitions are frequent in the food processing industry, and something we follow closely.
The takeover of Crown Chicken by Cranswick in the UK, formerly a pork-only processor and a long-term customer of Marel Meat, resulted in an expanded and closer partnership between Cranswick and Marel. Now that the firm has entered the poultry business, it has chosen Marel Poultry as the primary supplier for its new facility.
The year 2018 saw the breakthrough of modern live-bird supply and anesthetization in North America, with several conglomerates switching to the ATLAS system and CAS SmoothFlow for stunning.
For its Milford, Delaware, facility US poultry processor Perdue Farms invested in a higher-wellbeing CAS system, as well as a live bird handling process that will be the first of its kind in the US.
Perdue has officially committed itself to converting all its plants to CAS instead of electrical stunning. While both electric and CAS stunning systems are approved, proven, and accepted for bringing the highest levels of animal wellbeing to poultry processing in the US, a growing number of customers show interest in integrating CAS systems at poultry facilities.
We expect orders from poultry processors, including large conglomerates, for CAS stunning systems to grow following positive results from pilot projects.
Sustainability concerns, such as limiting the carbon footprint and reducing food waste, as well as animal wellbeing and food safety, are driving demands for new automated technologies in the poultry industry. With this in mind, Marel Poultry continues to focus on developing sustainable processing solutions.
Any degree of bacterial contamination in the food chain can have significant consequences, making hygiene of paramount importance in the food processing industry. Marel Poultry offers solutions that help processors produce safe, high-quality food, with automation playing a key role by reducing the number of steps at which workers manually handle products.
Our maturation chilling system is an excellent example of such a solution, as it virtually eliminates the risk of product cross-contamination. The result is higher quality products with a longer shelf life.
Reducing the company’s carbon footprint has become one of the key goals of Marel Poultry’s innovation team. This objective is in line with Marel’s commitment to the UN Sustainable Development Goals, including the goal of ensuring sustainable consumption and production patterns. To reduce our carbon footprint, we take water and energy use into account when designing all of our new technologies.
One example of carbon footprint reduction is ATLAS’ SmartStack transport module. Its construction features a bottom tray, which doubles as a pallet. The dual function design enables transportation of more birds per module, and gives them the most headroom in the industry. The design also reduces truck movements from farm to processing plant, thereby lowering the carbon footprint in transportation of the birds.
Maximum carcass balancing was an important trend in 2018. Perfect carcass balancing means being able to sell all parts of a chicken at the best possible price. Marel Poultry introduced two new products to optimize carcass balancing: total leg deboning and Q-Wing.
Deboning both thighs and drumsticks with the Thigh Fillet System and the Drumstick Deboning System adds value for processors by harvesting more boneless leg meat at a higher quality. Total leg deboning allows processors to upgrade lower value products to high-quality products in demand by consumers.
The fully inline, high capacity, total leg deboning solution from Marel Poultry helps poultry processors achieve optimal carcass balance. In adding more value to chicken legs, they are making optimal use of every part of the broiler. These solution show how sustainability and profitability can go hand-in-hand.
With previous methods, only a very labor-intensive process could detect a broken whole wing. As a result, processors would downgrade both broken and unbroken whole wings, even if some were high-grade pieces of meat. Wing products are becoming more popular and consumers demand consistent high quality wings. This provides incentive for poultry processors to invest in automated, accurate wing processing.
To address this challenge, Marel Poultry introduced Q-Wing, an automated quality assessment and distribution solution for wing parts. The system helps secure consistent quality and increase wing yields. Q-Wing makes it possible to harvest the highest value and yield from each part of the wing, thereby contributing to a better carcass balance.
Automation and smarter processing are important growth drivers in the poultry industry, but there are various other secular trends that come to play.
As the industry’s focus on automation increases, poultry processors are assessing, and subsequently investing in, more advanced systems. Marel Poultry works in partnership with processors to help them introduce automated and robotized systems into their facilities without requiring a complete plant redesign.
Our solutions are designed to meet and exceed the yield and effectiveness of manual work, with a high return on investment, and the lowest possible impact on daily operation. We ensure processors can continue to deliver end products of consistent quality as they modernize their plants.
In the poultry market, traceability is not just a buzzword. Food companies around the world are trying to minimize any loss of business and damage to their brand due to costly product recalls. Without an effective traceability system, food processors can be shut out of lucrative new markets, or could end up losing business to companies that demonstrate reliable traceability to ensure food safety.
Marel Poultry offers processors solutions that allow them to gather data and achieve end-to-end traceability. Sensors at crucial positions throughout the plant can deliver information to the control room, where Innova software can then identify and trace backwards every product in the plant.
Increased attention to animal wellbeing is both a challenge and an opportunity for growth in the poultry industry.
Animal wellbeing in poultry processing is particularly important during live-bird handling and anesthetization, two steps which are currently under close scrutiny. To address this, we developed the ATLAS and CAS SmoothFlow systems, both of which have set new standards as the industry’s most humane systems.
In 2019, global production of chicken meat is forecast to rise by 2.3% and reach 97.8 million tons. Global trade in chicken meat is expected to grow by 4.2% to 11.6 million tons.
The US is expected to continue to be the leading producer in 2019, accounting for 20% of total production, followed by Brazil with 14%.
In 2017, the European Union overtook China to become the third-largest producer of chicken meat in the world. It is expected to hold that position in 2019.
Brazil continues to be the world’s leading exporter of chicken meat, although the figures are lower than forecasts.
Source: USDA Foreign Agricultural Service (2018, October 11). Chicken Meat Production and Trade. Retrieved from: https://apps.fas.usda.gov/