Animal Protein Outlook: Another Wild Year?

Consumers may be looking to trim the fat in their meat-buying budgets, but animal proteins are still center-of-the-plate mainstays. According to the 2021 “Power of Meat” report conducted by 210 Analytics on behalf of FMI — The Food Industry Association and the Meat Institute’s Foundation for Meat and Poultry Research and Education, 98% of American households buy meat.

As a new year begins, carnivorous consumers are making decisions based on a variety of socioeconomic factors that continue to shape — and reshape — the marketplace. 

First, with implications for both shoppers and retailers, prices continue to rise. According to the U.S. Bureau of Labor Statistics, the protein market is experiencing some of the highest rates of inflation, with meat, poultry, fish and eggs up nearly 12% over 2020 levels. Beef prices are hitting highs not seen since 1990, and several manufacturers have already revealed their intent to raise prices on their branded products in or after January. 

In response, many shoppers are dialing back their animal protein purchases, at least compared with the high levels seen during the cook-at-home period of the pandemic. According to market research firm IRI, consumers bought fewer items from the meat department during the first three quarters of 2021 compared with 2020. 

Still Hungry for Meat

Although people face steeper prices at the meat case and are exposed to the drumbeat of stories about the impact of meat production on the environment, they’re still eating animal-based proteins — just in different ways.

Similar to what’s happened in past economic downturns, shoppers are trading down from more expensive steak cuts to budget-friendlier ground beef or ground turkey. Some shoppers are switching to frozen foods, including frozen meals made with meat, and value portions of frozen meat. In a recent IRI report on the meat category, researchers from 210 Analytics found that consumers are seeking out sales specials, often using apps and in-store promotional signage to find deals. 

Meanwhile, as the pandemic lingers, changing lifestyles and priorities are also influencing purchases at the retail meat case. The prioritization of health and wellness has fueled interest in leaner cuts and products made with a blend of meat and plant-based ingredients; buying smaller portions for dietary reasons also helps consumers spend less as prices rise. Further, pandemic-era shoppers who’ve brushed up on their cooking skills but want a hand in the kitchen are looking for products that make preparation easier.  

There are some differences within protein segments heading into 2022, however:

• In the pork sector, dollar sales of fresh pork rose during September, as did bacon and ground pork, outperforming other animal proteins. 
• Chicken may be siphoning some sales from higher-priced beef cuts: The National Chicken Council points to a projection from the U.S. Department of Agriculture’s Economic Research Service that per capita consumption of total chicken will edge up from 97.2 pounds to 98.3 pounds in 2022.
• Beef prices may be on the upswing, but demand in the consumer and wholesale market remains strong, according to the industry group CattleFax. Wild-card factors for 2022 include drought conditions, market volatility and processing capacity challenges. 
• The seafood category, which was riding high during the pandemic, has been affected by supply chain issues and shoppers’ price sensitivity, reflected in a dip in fresh seafood sales from October 2020 to October 2021. That said, between January 2021 and October 2021, frozen seafood sales rose 2.6%, IRI and 210 Analytics research shows. 

No matter how prices and other factors shake out across various animal protein segments, assortment is more important than ever, points out Michael Uetz, principal/owner at Chicago-based Midan Marketing. “One strength of the meat case is the amount of variety it holds,” Uetz notes. “Between beef, pork, chicken and more — as well as numerous different cuts and their many applications — meat is certainly not a one-size-fits-all meal solution. For consumers looking for a premium option, the meat case delivers. For those on a budget looking for value, there are options. When promoting and merchandising your meat selection, be sure to show different cuts of different proteins in different price ranges.”