President of FreshSmartSolutions, Inc.
The U.S. reportedly eats one-sixth of the world’s meat production, but the landscape is shifting. According to United States Department of Agriculture (USDA) estimates, U.S. per capita meat consumption (red meat and poultry combined) has fallen 12.2% over the past 5 years alone, from 187 lbs. in 2007 down to an estimated 165 lbs. per person in 2012.
Meat Sales Grew in 2012 While Volume Fell
Total fresh meat department sales were up +2.1% in 2012, according to retail sales data from FreshLook Marketing, while volume (pounds) fell -2.4% and average price-per-pound increased +4.6%. Several of the categories struggled with significant price increases, including beef prices +7.4%, chicken +4.4%, and turkey +11.2%, driven largely by rising feed prices as the result of last summer’s drought.
Beef dollar sales were slightly up at +0.6%, but volume plummeted -6.3%. Beef still accounted for more than half (50.2%) of meat department dollar sales but just 35.4% of volume, only slightly ahead of chicken’s 33.2% share of category volume. Chicken sales accounted for 22.3% of fresh meat dollars, with sales growing +5.3% while volume inched ahead +0.9%. Pork dollar sales were flat while volume slipped slightly down -0.3%.
Price and Health are Key Drivers
Cattlefax, a beef industry research group, is predicting that prices will rise to record highs in 2013 as herds were dramatically thinned during last summer’s drought. Higher prices will continue to suppress beef consumption, encouraging many shoppers to trade down to less expensive cuts or perhaps forego a meat-based meal altogether. In addition to pricing pressures, health-conscious shoppers are also gravitating towards leaner, lower-priced cuts of beef and pork, but shoppers will need help in learning how to properly prepare and cook these leaner cuts to enjoy an optimal eating experience.
Impact of Convenience, Added Value, Mini Meals
Shoppers will continue to seek greater convenience and new flavor experiences, leading to expanded offerings of pre-cut, pre-marinated, or otherwise further-prepared meats. Younger consumers are the most likely to have increased their poultry consumption in the last year. They are least likely to possess cooking skills and therefore find value-added, ready-to-cook (seasoned, marinated) poultry products more convenient than ever. The growing trend of snacking and mini-meals is also driving a decline in portion sizes, and combined with rising beef prices, some chefs predict that beef will be used increasingly as a flavor ingredient in meals rather than being the meal itself.
Merchandising for Healthy Profits
Since shoppers often build their entire meal occasion around their protein selection and need assistance making the most nutritious choices, the meat department can be “ground zero” for the retail dietitian’s mission of helping shoppers to eat more nutritiously while supporting meat department sales. Here are three ways to collaborate effectively with your meat department:
Don Ladhoff is a recognized expert in retail and shopper marketing. As President of FreshSmartSolutions, Inc., he leads the development of retail solutions for a diverse group of companies and commodity boards spanning the perishables, packaged food, and technology categories. Don works closely with leading retailers in every major category, including grocery, club, mass, drug, and specialty channels to strategize and implement his clients’ programs. To learn more, visit www.freshsmartsolutions.com