'Beef'ing Up Sales
Consumers have returned to the familiar amid COVID-19, and meat has come back to the center of the plate.
Specifically, consumer perception of the beef industry has positively shifted. From January to September 2020 the percentage of consumers claiming to eat beef at least weekly has increased from 67% to 72% compared with 2019, according to the Centennial, Colo.-based National Cattlemen’s Beef Association (NCBA). In addition, the number of people with a positive perception of beef has increased, resulting in positive perceptions reaching 70% for the first time.
A Meat Resurgence
The year 2020 proved to be unchartered territory for the meat category. Retailers were forced to keep up with demand as consumers panicked at the onset of the COVID-19 pandemic and prepared to shelter in place. They bought more meat than they needed, not knowing whether stores were going to remain open or whether there would be product shortages, as meatpacking employees were unable to work due to rising coronavirus infections. As a result, many retailers experienced empty meat aisles, leading big names like Kroger and Costco to restrict how much meat customers could buy at a time.
In 2020, overall meat dollar sales increased 18.4% and volume sales grew 10.3% versus the same period last year, as reported by IRI and 210 Analytics. This translates into an additional $12.7 billion in meat department sales during the pandemic, which includes an astounding additional $5.7 billion for beef, $1.6 billion for chicken and $1.1 billion for pork, versus the same period in 2019.
The protein-focused Tyson Foods Inc., which produces approximately 20% of the beef, pork and chicken in the United States, reported that its fiscal-year sales climbed to $43.2 billion from $42.4 billion the year prior, with beef, the strongest-performing category, responsible for 36% of sales.
One segment that was particularly popular throughout 2020 were grinds, and during December 2020, the dominance of grinds in meat sales continued, with ground beef sales totaling $798 million, or 202 million pounds, according to IRI and 210 Analytics data.
“In early summer, when beef had a very tight supply, we saw other grinds stepping up to the table,” says Anne-Marie Roerink, president of San Antonio, Texas-based 210 Analytics. “The price per pound for beef, and the availability of ground beef, was such that people shifted to ground pork, ground turkey, chicken, bison, etc.” In December 2020 alone, ground turkey sales totaled $104 million.
Lamb also experienced an increase in sales, thanks to a shift from foodservice to food retail. In December 2020, lamb continued to experience the highest percentage gains on its small base, up 34.1% versus the same month a year ago, according to IRI and 210 Analytics data. Lamb has kept its monthly gains very steady, at 30%-40% over year-ago gains.
The Big Chill
Consumers also hit the freezer aisle in 2020 for their protein needs. According to IRI and 210 Analytics data, meat, poultry and seafood all experienced above-average growth in the frozen food section, which has emerged as a true extension of the meat department.
“When you look throughout 2020, there are periods of shelter in place, and time periods where mobility was much higher, when virus counts were down,” notes Roerink. “During the periods of low consumer mobility, you see both frozen and shelf-stable gear up. This is directly related to people wanting to go to the store less, but actually having to cover more meals, from breakfast and lunch to dinner, beverages and snacks. This means that people looked for items that can easily be frozen or items that have longer shelf life.”
According to Roerink, frozen seafood in particular experienced exceptional growth during 2020. Whereas fresh and frozen seafood were of similar size in total dollar sales at the beginning of 2020, the aggressive growth in frozen seafood has moved it well past its fresh counterpart.
Overall, double-digit increases versus the same week a year ago were seen for the vast majority of frozen categories, led by meat, poultry and seafood. These proteins increased their contribution to sales to 25.9% in December 2020.
Consumption Trends Create Opportunity
Increased beef consumption following COVID-19 is creating new opportunities for food retailers. While many restaurants across the nation are still under COVID-related restrictions, the deli-prepared food section can step in as a safer alternative to eating out while providing quick-serve meal solutions, with proteins playing a significant role.
NCBA’s November 2020 Deli-Prepared Survey found that almost half of consumers would be more likely to make purchases in this section if there were even more beef options. “However, having a variety of protein options is still important, especially among younger consumers,” the survey notes. “Shoppers are also looking for a variety of cuisine options as well, such as American, Italian and Mexican, when they shop the deli-prepared section. Incorporating beef into options utilizing these cuisines could entice even more consumers.”
The survey also revealed that consumers are currently buying, and are more open to buying, beef meatballs and beef sausage than meatballs or sausages made with other proteins. The interest in proteins and specific beef items shows that beef options could help draw even more consumers to shop for deli-prepared foods.
More at-home cooking is also driving greater variety of cuts/kinds purchased, so food retailers should leverage enthusiasm for experimentation. In its top cooking trends predicted for 2021, Bronx, N.Y.-based e-grocer FreshDirect indicated that the demand for premium cuts of meat will rise, as the retailer’s meat sales had recently increased 63%. The online grocer expects this trend to hold steady even after the pandemic.
Shopper behavior also shows that shelf life matters. Retailers should consider packaging that supports longer shelf life, and think about holding stock-the-freezer events.
“In the meat department, there is a real opportunity to address shelf life with packaging, so people can buy for several days and weeks at a time and be easily able to freeze it without repackaging, or store it in the refrigerator for several days or weeks,” says Roerink.
While there has been much discussion of adjusting portion size for smaller holiday celebrations, a big shift in cooking versus eating out has been observed among single consumers. Retailers should ensure that they have solutions that address beef offerings for these smaller households.
Roerink also reminds retailers about the health aspect when promoting beef. “In the beginning of the pandemic, we saw people fall back into more conservative eating patterns, perhaps [for] a bit of nostalgia or comfort, but healthful choices are roaring back,” she observes. “Immunity is a big area of focus for consumers, and beef brings zinc to the table, to name just one. Consumers highly associate vitamins C and D and zinc with immunity building.”
What’s for Dinner in 2021?
One year into the pandemic, many consumers are now scrambling to look for any shortcut they can get when it comes to mealtime. According to Springdale, Ark.-based Tyson, cooking and preparing meals from home has increased 67% since COVID-19 began. Ready-to-eat, -heat and -cook solutions can serve as ways to keep the food dollar in the retail channel.
In fact, Tyson says that retail demand for its prepared items surged during its most recent quarter, in both average sales prices and volume. “Consumers are really getting tired of cooking at home,” Dean Banks, Tyson’s president and CEO, told analysts on a conference call.
To help ease the burden of cooking fatigue, the company launched Instant Pot Kits, Instant Pot Seasoned Proteins and Tyson Oven Ready Family Size Kits in January 2021.
“Families everywhere are looking for their next great-tasting dinner solution,” says Steve Silzer, senior marketing director for the Tyson brand. “It was important for us to offer our new varieties of fresh meal shortcuts to cut down on the time spent chopping and stirring so families can spend more time together at the table enjoying comfort food classics.”
For example, Tyson Instant Pot Kits’ Creamy Stroganoff Beef & Noodle variety provides prepped fresh ingredients offering four to five servings, with 17 grams of protein per serving. The meal kit cooks in 25 minutes and consists of USDA Choice Beef Strips and wide egg noodles topped with a creamy sauce.
Consumers are also looking for dependable meal ideas that they don’t have to worry about messing up. “Beef roasts and ribs are intimidating to many,” notes Roerink. “What are ways in which you can lower the confidence barrier, much like the meal-kit companies have done?”
Grinds could be the key here. Not only are they an economical choice for many who are experiencing financial burdens during the pandemic, but grinds also have a very low confidence barrier. “In other words, anyone, regardless of skill level, can prepare grinds, whether form them into a patty or cook them up to put into a sauce,” explains Roerink. “People know the meat will not go to waste because they prepared it incorrectly. For cuts such as roasts or ribs, many shoppers are intimidated by lack of knowledge of how to prepare them.”
Roerink adds that grinds are highly versatile. “They can be used as burgers or meatballs, in meat sauces, or casseroles,” she suggests. “A lot of shoppers are in the store less often than they were pre-pandemic, and have shifted their meat purchases to cover more days. While some people may have planned out exactly what they are going to eat, others will opt for versatile cuts that they can use for a variety of dishes.”
Meanwhile, the famed Wahlberg brothers are focusing on the premium beef category for their Wahlburgers brand, targeting those customers who are willing to pay a little bit more for a high-quality product, like the brand’s new American-style Kobe blend boasting a rich flavor profile. Additionally, Wahlburgers is introducing a 100% grass-fed blend finished patty this year. A Flex blend is also in the works, targeted to meet the growing popularity of the flexitarian diet.
“Patties are our best seller, and we’re looking for it to stay that way,” says Ryan Jahnke, VP at Bloomfield Hills, Mich.-based ARKK Food Co., the exclusive licensee of the Wahlburgers product line for retail. “We didn’t want to be a singular SKU of a gourmet blend, so it was important for us to get a couple of more options for retailers.”
Wahlburgers will also tap into a slightly different category this year with all-natural beef hot dogs and bacon, thanks to a collaboration with Golden, Colo.-based Coleman Natural Foods. Both products are antibiotic-free and don’t contain nitrites.
Jahnke notes that the Wahlburgers line has been perceived very well, and that the company feels confident in Wahlburgers’ growth plans because of it.
“We pulled IRI/Nielsen data on the Walburgers brand and were blown away at what we saw,” he recounts. “We focused in on some of our better accounts and found that we were anywhere from the top SKU to, at worst, the third-best SKU in the branded beef category in very major retailers. And nationally, our signature patty was the second-best SKU, according to Nielsen data in that same branded beef category. So we’re very excited for this year, as hopefully COVID eventually fades out, and we’re back to some sort of typical purchasing environment.”
Beef Outlook
On an adjusted basis, Tyson anticipates that the beef segments will remain strong, although not at fiscal 2020 levels.
Roerink agrees, pointing out that once we lap the COVID weeks, which would start March 8, retail meat sales will turn negative for the simple reason that meat sales shot up 90% over year- ago levels, due to pandemic panic buying and preparation for sheltering in place.
“This was uncharted territory for all of us, industry and consumer,” she says, “so we’re not going to see that level of sales again in all likelihood. In the fourth quarter, we’ve been seeing meat sales pretty steadily at about 10% versus year ago, and I imagine that this is where we’re going to see demand hold for the first quarter of 2021 – using 2019 as the base year, not 2020.
“Beef has been king of the castle in 2020,” continues Roerink. “Beef has added about as many additional dollars alone, versus all the other meats. A lot of it was ground, but we also see great movement in premiumization. That’s actually a trend we’re seeing throughout the store with people buying little indulgences instead of eating out, or perhaps recreating a restaurant meal. Interestingly, right along with beef, we’ve seen tremendous strength in mushroom sales as well, for a great cross merchandising opportunity for retailers.
- Where’s The Beef?
While demand for beef and other meats continues to surge, it’s impossible not to acknowledge the emerging alternative-protein segment. The food industry has moved toward offering more plant-based options in their product lines.
For example, Jensen Meat Co., a San Diego-based processor of ground beef, is currently expanding both its facilities and its team to manage co-packing opportunities for plant-based beef alternatives. Its new processing facility, to be completed by April 2021, will include bulk and patty forming for foodservice and retail finished products.
Among its alternative protein trends for 2021, The Good Food Institute (GFI) mentions that plant-based meat snacks could be a sizable opportunity. According to the organization, conventional meat snacks are a $2.8 billion category in the United States, split 50/50 between jerky and other formats. Plant-based meat snacks could tap into snacking and high-protein trends.
Washington D.C.-based GFI also says to keep an eye out for different plant protein sources this year. Key emerging ones include sunflower, mung bean, potato, rice, duckweed, chickpea, navy bean, oat and fungi.
Alternative-protein products are still a relatively small segment of sales compared with the traditional meat category, however.
“When looking at plant-based meat alternative sales, they represent 0.6% of total meat department dollar sales and 0.3% of volume sales,” says Anne-Marie Roerink, president of San Antonio, Texas-based 210 Analytics. “But absolutely, they have seen robust growth in 2020, upwards of 80%. The thing about alternatives is that it doesn’t replace the meat purchase; it’s just one of the protein choices for most people. There is a very small segment that drives the majority of these purchases, and most others buy it once or twice a year. So it’s not a matter of meat versus alternatives, but for most consumers, it is meat and alternatives.”
Further, according to Rockville, Md.-based Packaged Facts, it’s younger American consumers, particularly those between the ages of 18 and 44, who are the most likely to eat plant-based meat and who account for the majority of plant-based meat consumers.
As plant-based meat alternatives’ integration continues amid the pandemic, Roerink points out that they’re not a threat to meat sales, but an opportunity to engage with younger shoppers in the meat case.
