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SECTOR REPORT – CURED MEAT ASIAN MEAT M A G A Z I N E Cured meat producers innovate to stay relevant

Cured and dried processed meats still have a place in the market, but they fill a segmented category. ARIEF FACHRUDIN and the Asian Agribiz team find that some cured meat producers are innovating their product offerings and marketing to stay relevant and to attract consumers of all ages.

2 ASIAN MEAT MAGAZINE – July/August 2018 SECTOR REPORT – CURED MEAT

Bali Ananda’s lapcheong is made of natural ingredients using a special family recipe.

Consumption of bakkwa, a a town in Johor neighbouring traditional Chinese of dried . sweet barbecued meat, during “The traditional bakkwa market has been is too competitive with too many stagnating or declining among players competing in the small Malaysians, as consumers become segment. We must also be quick more health and price conscious. to adapt to consumers’ changing Besides, has a famous preference,” he said. bakkwa brand with a long history. Bakkwa tissue These factors combined have made the market challenging for Unlike the oily, chewy and meaty small and medium sized players. taste of traditional bakkwa, Mr Tan However, Tan Tian Han, owner of claims his bakkwa tissue is healthier, Malaysia’s Kinyubi Food, believes less oily, less sweet and crunchier. the market will always have room As the name implies, his creation for innovative products to suit the is paper-thin, with thickness of less consumers’ ever-changing taste buds. than 1mm and a generous scattering Mr Tan started to develop the of almond flakes on the meat. signature bakkwa tissue four years But the work required to produce ago after he tried it during a trip to bakkwa tissue is more tedious than Taiwan. On his return to Malaysia, he traditional bakkwa. It takes Mr Tan decided to create his own Malaysian 2-3 days to produce it, in contrast version of bakkwa tissue. He has to less than a day for traditional been selling the product since 2016. bakkwa. Prior to this, he was producing He added that his product is traditional meat , meat floss and especially popular among younger related meat products for more than and elderly customers who have 10 years. But the bakkwa tissue is difficulty chewing on the traditional what got his business going among bakkwa. However, traditional bakkwa residents and tourists to Batu Pahat, still enjoys a fair share of followers.

ASIAN MEAT MAGAZINE – July/August 2018 3 and flavours, which he hopes so many innovative, modern meat will appeal to a wider Malaysian products with good packaging in the crowd. market. This is also a challenge for Mr Tan reckons producing bakkwa us to improve the taste, packaging tissue costs 4-5 times more and marketing of our traditional than traditional bakkwa. Firstly, cured and dried products.” unlike integrated producers that After joining the firm in 2016, Mr have upstream and downstream Jaya decided to set up a website for businesses, he obtains lean meat the company called sosisbaliananda. from a supplier, and thus is subject com. Through this platform, he to fluctuations in raw material promotes the firm’s profile and price. Secondly, the almond flakes products without being limited by required in production is sourced distance and time. In addition, he Tan Tian Han (right) and his wife Gan Mee Leng. overseas and costs higher as well. also promotes the products on But given the price sensitivity several online marketplaces such as Mr Tan is constantly tweaking his of consumers, he must delicately Tokopedia and Bukalapak, to name recipe. “We are striking a balance balance the impact of increased raw a few. between healthier ingredients while material price with his selling price. He revealed that the strategies maintaining the traditional way of have proven effective and has Adapting to changing lifestyles making bakkwa,” Mr Tan said. successfully raised both the firm’s and habits The bakkwa tissue contains sales and brand awareness. less than 10% of lard and Bali Ananda, a famous lapcheong “Bali is still our main market, but substantially less sugar per sheet () producer in Bali, with our online marketing, today than conventional meat jerky, thus Indonesia, has been in the cured our products are distributed to creating a drier, less shiny texture. and dried pork business since 1972. customers in Greater Jakarta, East Sugar is applied on the pork slice However, with changes in consumer Java and South Sulawesi. Several during production to caramelise the lifestyles and shopping habits, the restaurants in Jakarta and Surabaya bakkwa’s texture. family business needed to adapt. have also used our pork lapcheong,” New variants Christian Jaya, a third-generation he told Asian Meat Magazine. family member, said: “In this internet New taste and product He is currently developing two era, we must change to stay relevant more variants for bakkwa tissue: spicy and competitive. Currently there are Pork lapcheong with an original taste is the signature product of Bali Ananda, made using a traditional recipe that has been passed down through the generations. However, Mr Jaya thinks that relying only on that product will not be enough to grow the business. So, he ventured to explore new tastes. Now, Bali Ananda has new taste variants for its pork lapcheong,

The production of bakkwa tissue.

Bakkwa tissue waiting to be sorted into boxes.

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Meanwhile, the new ‘spicy & “Many hotels can’t afford that sweet’ and ‘honey’ variants are price. On the other hand, they still vacuum packed for longer shelf want to have the product for their life. “With vacuum packaging, the guests. Dagsap developed smoked products are good for consumption to respond the market up to eight months,” he said. change,” said Mr Mahisa, adding In the near future, Mr Jaya wants that the price of the smoked beef is to revamp the product packaging to more affordable because it is made make it more eye-catching. of CL 85 beef combined with fillers. Direct marketing Modified machine Mr Jaya looks to Singapore’s To produce smoked beef, Dagsap bakkwa producer Bee Cheng Hiang uses a modified sausage line. Mr as a good example to follow in the Mahisa said the production process cured and dried meat industry. is almost like sausage production. “They combine tradition and The difference technology in producing their is that the Christian Jaya (left) and his father innovative cured and dried meat dough is Wiratha Darma. products. They also have outlets to moulded and sell directly to consumers,” he said. then sliced. including ‘spicy & sweet’ and ‘honey’. “I want to steer our business this To modify the Mr Jaya has also created a new way. I want to open an outlet in line, Dagsap product: pork jerky with original Bali, so people can have easy and worked with taste. direct access to our products.” different “With the new tastes and partners, Innovating with market new product, we want to target including a change Ishana Mahisa consumers of all ages by giving local workshop. them more choices,” he said. Beef bacon was a flagship They asked Busch from Germany This year, Mr Jaya wants to create cured meat product of Indonesia’s to supply the vacuum pump. They another new product. “We want Dagsap Endura Eatore, used also worked with the Indonesian to produce a traditional frankfurter by many hotels in the country. agent of a Japanese meat made of pork with a special recipe. However, over the years, sales had processing equipment supplier We will soon develop this product been stagnant at only two tonnes to help with machine design. for trials. If our tasters say okay, we per month, forcing the company to For slicer, they turned to Treif of will begin commercial production,” discontinue the product. Germany. he said. Increasing competition in the “We learned that a normal Varied packaging hotel industry is another factor why sausage line has some difficulties Dagsap decided to stop making in producing smoked beef, so we Bali Ananda’s pork lapcheong with the product, said Ishana Mahisa, made some modifications. The original taste is traditionally packed Director. hopper was tapered for higher in plastic bags tied with rope. “We “There are many new hotels gravity. The stuffer was also have used this packaging model throughout the country, making modified to make it more powerful. since the start of our business,” said competition in this industry tighter. In addition, the modified line Mr Jaya. Since the players are competing uses a screw to push the dough on their room rates, they need and to prevent bubbling, and it is to control their food costs. equipped with a special vacuum Consequently, they choose cheaper pump because the dough is much processed meat products,” Mr thicker than sausage dough,” Mr Mahisa told Asian Meat Magazine. Mahisa explained. Beef bacon is an expensive cured Growing sales meat product since it is made from 100% meat, mainly from brisket. Dagsap’s efforts for the smoked The price of brisket is now around beef paid off. The product is not USD 5.76/kg. A kilo of brisket only only well accepted by its customers yields 700g of beef bacon, so this in the hotel industry, but also in the means production cost is around modern retail market. USD 7.20/kg. With margin and Mr Mahisa revealed that sales tax added, selling price should be of the product in modern retail is The strips version of Dagsap’s smoked beef. around USD 9/kg. picking up. Recently, the product

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technologies and long processing time thus jacking up the price. A kilo of raw salami sells for about USD 25/ kg, but salami imported from Italy is about David John Whitehead USD 60-80/kg. While cured meat products are priced quite high, producers say reducing the price is not an option. “We will not modify or replace the meat raw materials used in The old traditional packaging of Bali Bali Ananda’s vacuum-packed lapcheong. production because quality and Ananda’s pork lapcheong. food safety are our top priority. We always comply with regulations on also won a place in traditional tonnes of European style cooked food safety, using meat products markets. meat products. of clear origin,” explained Mr Dagsap uses different brands The market is growing yearly Whitehead. for different market channels. The but tends to do so at a slow pace “The additives we use are fully ‘Endura’ brand is for the horeca because of the high cost of the registered in Vietnam, with the industry, while ‘Yona’ is for the product and limited consumption. proportion and composition used modern and traditional markets. The Due to the special characteristics following government regulations. formula for both brands however, is of cured meat products, these We no longer use nitrites, but the same. are designed for the premium instead use a plant-derived “Currently we sell 4-5 tonnes segment made up of higher income additive, extracted from or a month, and sales is growing,” consumers. Making these products imported from Europe.” AM he said. “We are happy for this requires high quality raw materials achievement. Moreover, many that meet European standards. customers said the product has Order-based production a unique taste compared to competitors’ products. This product There are only a few companies does not contain monosodium in Vietnam that produce cured meat glutamate, we only use salt, sugar products due to the limited size of and special spices.” this segment. Mavin Foods, the food production Vietnam’s cured meat market arm of Australian Mavin Group, Cured meat products in Vietnam previously provided about 500- are still quite new to domestic 700 kg of salami and peperoni to consumers due to their taste and hotels and restaurants in the north. specific processing technologies. However, at present, the company Products are usually sold at hotels is not focusing on developing or or European restaurants with mostly increasing its market share in the Western-style diners. cured meat segment. The supply of cured meat “Since the market segment is still products in Vietnam is mainly too small and domestic customers imported from Europe or produced are still unfamiliar with these types at a few local factories specialising in of products, we only produce European-style food processing. them based on customers’ orders. The ratio of cured meat products Our current focus is on other to other cooked meat products such cooked products such as sausage, as ham and sausage is currently bacon and ham,” said David John small. The Vietnamese market Whitehead, Mavin Group Chairman. consumes about 3-5 tonnes a According to Mavin Foods, cured month, out of a total of 2000 meat products require complicated Dagsap’s smoked beef in vacuum packaging.

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