Much attention is being paid to the higher cost of beef, yet sales data and market research show demand for beef remains strong. Beef continues to be a cornerstone of the retail meat case, it’s featured on almost every restaurant menu, and Americans continue to purchase beef, even at higher prices.
Overall food prices are estimated to increase between 2.5 to 3.5% in 2014. Meats, poultry and fish, specifically, are forecasted to increase 3 to 4% this year. If you compare current beef prices to the same time period a year ago, the price is up about 13 cents more per serving.
Americans are beginning to see higher food prices when shopping and dining out. But the rising cost of beef is not deterring Americans from buying beef at the store or enjoying a beef meal at their favorite restaurant. Overall, 90% of Americans say they are still enjoying beef on a monthly basis, and more than 70% say they find steak prices acceptable at the grocery store and in restaurants. The demand for beef is strong and we are seeing this demand in the form of higher prices.
So the question is this — how are higher beef prices affecting retail and foodservice operators and consumers and how are they responding, and what is the outlook for beef?
How are Americans responding to higher prices?
Americans are continuing to purchase and enjoy beef, and they’re willing to pay more for it. A recent food demand survey conducted by Oklahoma State University showed consumers were willing to pay $6.35 per pound for a steak and only $4.63 for a chicken breast and $3.51 for a pork chop at the store.
Americans, specifically older millennial parents, are placing more importance on the value of food quality, taste and meal experience than the price of their food. Millennials are willing to pay more for high-quality foods like beef because it delivers on taste and quality like no other protein.
How are higher prices affecting retail operators?
When it comes to retail, dollar sales are king, and beef sales are vitally important to a healthy meat department. Beef is – and should continue to be – a focal point of every grocer’s meat department merchandising and marketing efforts. Not only does beef net more sales, pound for pound, than pork or chicken, it also makes up 8 percent of total supermarket sales and accounts for 49.5 percent of dollars sold in meat-case sales.
Beef drives traffic to stores and the meat case during the grilling season. And Americans say they’re twice as likely to visit a grocery store that is promoting beef for grilling, over a store that promotes any other protein.