Chickens wearing consumer hats in a supermarket, symbolizing consumer demand driving the poultry industry.

Poultry's Profit Puzzle: Unlocking the Secrets to Survival and Success in a Changing Industry

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Lena Kashyap in Business & Economy August 2025 • 4 min read.

"Explore how demand factors, not just productivity, are reshaping the US poultry industry, impacting everything from plant survival to consumer choices."


The poultry industry, a cornerstone of the American food system, is undergoing a period of rapid transformation. Traditionally, discussions about business success have centered on productivity, assuming that more efficient operations automatically translate to greater profits and stability. However, a recent study challenges this conventional wisdom, highlighting the critical—and often overlooked—role of demand-specific factors in determining which poultry businesses thrive, survive, or disappear.

This isn't just about farms and factories; it's about understanding the evolving tastes and preferences of consumers, and how these demands ripple through the entire supply chain. Do consumers favor certain brands? Are there regional preferences that impact sales? How do exports shape production strategies? These are the questions that now dominate the conversation, pushing productivity into a supporting role.

This article explores the key findings of this research, offering insights into how poultry businesses can adapt to a changing landscape. Whether you're a consumer, an industry professional, or simply interested in the future of food, understanding these dynamics is essential for navigating the complexities of the modern market.

Beyond Efficiency: Why Demand Rules the Roost

Chickens wearing consumer hats in a supermarket, symbolizing consumer demand driving the poultry industry.

For years, the standard narrative in economics has been that productivity is the key to survival. The idea is simple: the most efficient companies produce goods at a lower cost, allowing them to undercut competitors and capture market share. In the poultry industry, this has meant focusing on streamlining operations, reducing waste, and maximizing output. While efficiency remains important, recent research indicates that it's no longer the primary driver of success.

The study, which analyzed data from US poultry processing plants between 1987 and 2007, reveals a surprising twist. While high productivity is undoubtedly beneficial, it's the ability to meet specific market demands that truly sets companies apart. This means understanding consumer preferences, adapting to regional tastes, and building strong relationships with buyers. It's about more than just producing a quality product; it's about getting that product to the right people, at the right time, and at the right price.

  • Consumer Preferences: Do consumers favor white meat over dark? Are they willing to pay a premium for organic or free-range options? Understanding these preferences is crucial for tailoring production.
  • Regional Tastes: Different regions of the country have different culinary traditions. Poultry companies need to adapt their offerings to suit local tastes, whether that means spicier seasonings in the South or different cuts of meat in the Northeast.
  • Buyer Relationships: Building strong relationships with retailers, restaurants, and export markets is essential for securing sales and ensuring a steady stream of revenue.
These demand-specific factors are becoming increasingly important as consumer tastes evolve and the market becomes more fragmented. Companies that can effectively navigate this complex landscape are more likely to thrive, while those that rely solely on efficiency may struggle to stay afloat.

The Future of Poultry: Adapting to a Demand-Driven World

The poultry industry is at a crossroads. While efficiency will always be important, the ability to understand and respond to consumer demand is now the most critical factor for success. This requires a shift in mindset, from a focus on production to a focus on the market. Poultry companies that can embrace this change and prioritize demand-specific factors are poised to thrive in the years to come, while those that cling to outdated models risk being left behind.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.2139/ssrn.2636559, Alternate LINK

Title: The Effects Of Productivity And Demand-Specific Factors On Plant Survival And Ownership Change In The U.S. Poultry Industry

Journal: SSRN Electronic Journal

Publisher: Elsevier BV

Authors: Tengying Weng, Tom Vukina, Xiaoyong Zheng

Published: 2015-01-01

Everything You Need To Know

1

What are the primary factors driving success in the US poultry industry, and how have they changed?

Traditionally, the US poultry industry focused on productivity and efficiency, such as streamlining operations and maximizing output, to ensure success. However, a recent study indicates that demand-specific factors are now the primary drivers. These include understanding Consumer Preferences, adapting to Regional Tastes, and building strong Buyer Relationships. Companies that can effectively meet these demands are more likely to thrive.

2

How do Consumer Preferences influence the poultry industry, and what are some examples?

Consumer Preferences play a crucial role in shaping the poultry industry. These preferences drive the types of products that are in demand. For example, if consumers favor white meat over dark meat, poultry companies must adjust their production accordingly. Similarly, the willingness to pay a premium for organic or free-range options also influences production decisions. Understanding these preferences helps tailor production to meet consumer demands.

3

Why are Regional Tastes important for poultry businesses, and how does this impact their strategies?

Regional Tastes are significant because different parts of the country have distinct culinary traditions. Poultry companies must adapt their offerings to suit these local preferences. For example, they might need to offer spicier seasonings in the South or different cuts of meat in the Northeast. This adaptation allows companies to cater to local demand and increase their market share.

4

What role do Buyer Relationships play in the success of poultry businesses, and why are they critical?

Building strong Buyer Relationships with retailers, restaurants, and export markets is essential for poultry businesses. These relationships help secure sales and ensure a steady stream of revenue. By understanding the needs of buyers and maintaining good communication, companies can ensure their products reach the right people at the right time and at the right price. This is crucial for long-term sustainability.

5

How is the poultry industry evolving, and what must companies do to thrive in the future?

The poultry industry is transitioning from a production-focused model to a demand-driven one. While efficiency remains important, the ability to understand and respond to consumer demand is now the most critical factor for success. Poultry companies must shift their mindset, prioritizing factors like Consumer Preferences, Regional Tastes, and Buyer Relationships. Companies that embrace this change and prioritize market demands are poised to thrive, while those clinging to outdated models risk being left behind.

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