The beef industry has undergone significant change in the past few years. On the production side, severe drought has caused structural changes in the industry. Herd size has dramatically diminished, input costs are high and some cattlemen are exiting the business instead of taking on herd rebuilding. Looking ahead, there are further significant changes in the marketing landscape that the industry must successfully adapt to in order to keep beef as the premier center of the plate protein.
Households composed of one or two persons now represent 62% of total households. In addition, some families are now eating more a la carte meals, where individual entrees are needed to meet each person’s desire. Retailers are going to need several merchandising options as they reach out to these consumers. A recent beef checkoff study found strong consumer interest in packages of small, 4-5 ounce expertly trimmed steaks in the meat case… as well as on the restaurant menu. Market research also has found that a limiter for beef consumption is that beef does not perform well in the microwave. This has led to testing of new packaging such as a microwaveable ground beef option with a pouch to collect grease as the beef is cooked.
Hispanics are anticipated to grow from 16 percent to 30 percent of U.S. households from 2010 to 2050. The percentage of Asian consumers in this country is expected to nearly double, from 5 percent to 9 percent. Not only will tastes shift, but the beef industry must be able to satisfy increasingly diverse consumer palates. This will create an explosion of taste options to enjoy, particularly for millennials who embrace ethnic flavors to a much greater degree than older segments of the population.
The marketplace is fractured into three major generational cohorts. The baby boomers remain the most economically powerful generation and, at its peak, was 76 million strong. Boomers want to stay vital and productive as they age and, as more become empty nesters, their discretionary income increases. Generation X is the smaller (49 million) that followed the boomers. They are the in-between cohort whose influence is increasing as the boomers retire. Third is the millennial generation which, at 80 million strong, is bigger than the boomers. Millennials are the market of the future and as this cohort moves through society it is changing everything. Also, it is important to note that many of us refine our taste buds when coming of age in our 20’s. Historically that has been the time frame when steak consumption climbs. We must stand ready to educate millennials as they go through this important gastronomical coming of age.