From the March issue of Drovers.
Overall meat department sales have increased 2.5% since the recession that began in 2008, a growth rate the grocery industry says outpaces many other departments. That’s good news if you are a livestock producer, but there’s more to learn about how rapidly changing shopping habits will influence your business in the future.
In February, during the Annual Meat Conference in Nashville, Tenn., the Food Marketing Institute and the North American Meat Institute unveiled the 11th Annual Power of Meat study, which found 60% of shoppers made changes during the recession in what, where, when and how they buy their beef, pork, poultry and other proteins. Of those, 60% are spending the same amount but on fewer or different items, 25% are simply spending less and 15% are spending more, whether it’s on more product, better quality, or premium-priced items like heat-and-eat options.
While the meat department recorded a sales bump, performance varied among different types of meat. Conventionally raised and processed meat, which comprise most of the sales, increased 3.8%, and value-added goods increased 6.4% in sales—both on lower volume. Natural and organic product, however, rose 23.5% and 31.5%, respectively, albeit on much smaller volume.
A majority of shoppers—more than eight in 10—believe meat and poultry play an important role in a healthy, balanced diet. Millennial shoppers, however, were less likely to believe food intake is an essential part of health or that meat and poultry are important in a balanced diet. A key decision factor appears to be younger consumers’ connection to digital sources of information and their desire for transparency and traceability in all their food purchases.
A second study unveiled during the Annual Meat Conference—the National Meat Case Study—found fewer items overall are in the retail meat case. With more value-added and heat-and-serve items, 40% of the linear feet of the retail fresh meat case was dedicated to items other than fresh meat. By contrast, in 2002 the fresh meat case was 69% stocked with fresh meat.
The National Meat Case Study also found 96% of fresh meat products were branded, either with the store brand or a supplier brand. Just 4% remains unbranded. Five years ago the study found 27% of fresh meat
Whether you own 50 or 5,000 cows, these two studies underscore the priorities you should adopt for your operation. Consumers—especially millennials—want quick meal solutions and brands that offer quality and consistency. To serve those customers, retailers offer branded products to help build trust and loyalty.
Is your herd up to the challenge? Can your calves satisfy the specifications of branded products? Calf buyers will continue to show their demand for quality and health assurances with their bids. Packers and retailers are seeking cattle they can proudly put their name on. Your future success will depend on whether your cattle can meet those brand specifications.