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11/11/2022

Meat Shoppers Polarize Choices

Amid rampant inflation, consumers want aggressive pricing or all-out convenience, with branded items often fulfilling the latter at expense of the former
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Creekstone Farm's premium all-natural  tenderloins
Creekstone Farm's premium all-natural tenderloins contain no hormones or antibiotics.

Double-digit price increases in many meat and poultry categories are making consumers see red at the cash register. This is prompting them to choose cheaper cuts, money-saving combo deals and recipes requiring less meat. Bulk packaging and private labels are also experiencing more activity, as are pork and chicken overall. 

But when consumers are pressed for time, convenience often trumps price. Then they often have no compunctions about splurging on fully or partly prepared items. Premium and organic products are also performing well, particularly among affluent and health-conscious consumers and those looking to save by creating restaurant-style meals at home.

[Read more: "Sausage and Ham Brands Innovate Pork Category"]

“Consumers are switching to more affordable proteins like chicken, pork and lots of ground meat,” affirms Rick Stein, VP of fresh foods at Arlington, Va.-based FMI — The Food Industry Association. “Retailers are trying to provide value and help them stretch dollars. But there’s idiosyncrasies. Shoppers say their dollar doesn’t go as far and they must be judicious. Then they’ll buy prepared foods because convenience means more than dollars. I don’t know the psychology. In inflationary times, you can’t stereotype consumers.”

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SpartanNash Meat
SpartanNash offers many ready-to-cook items such as stuffed chicken breast and stuffed pork chops.

Jonathan Greenway, global lead of the consumer products practice at New York-based global consulting firm Alix Partners, believes that more upper-middle-tier shoppers are trading down to the mid-tier. “People who buy premium priced will always have money for food,” notes Greenway. “It’s the almost-premium sector where people trade down to the middle. Middle brands benefit, although they lose some sales to value brands. The bottom end will benefit most.”

[Read more: "Premium-Priced Meats Rise In Demand Despite Inflationary Environment"]

Midwestern retailer and distributor SpartanNash closely monitors this ever-changing market. Working closely with suppliers, it evaluates pricing and introduces products that meet current needs. “When shoppers face rising costs, some categories are impacted by cautious spending,” says Tim Kent, director of meat and seafood at the Grand Rapids, Mich.-based company. “Part of SpartanNash’s mission to deliver ingredients for a better life means offering a range of meat options so shoppers don’t have to compromise due to budgets.”

For the 52 weeks ended in September 2022, meat prices increased 6.8% category-wide, compared with the previous 52 weeks, according to Chicago-based IRI. Since September 2019, prices have risen 26.3%. On a price-per-pound basis, hardest-hit categories for the 52 weeks ending in September 2022 include fresh chicken, up 19.3%; fresh turkey, up 18.5%; processed chicken, up 16.9%; breakfast sausage, up 15.2%; and dinner sausage, up 11.8%.

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Creekstone Farms' Black Angus Beef and Natural Duroc Pork
Premium products like Creekstone Farms' Black Angus Beef and Natural Duroc Pork are attractive to affluent and health-conscious shoppers, as well as people looking to re-create restaurant-style dinners at home.

Bigger Meat Departments

Over the past two years, many retailers have expanded meat and other fresh departments in square footage and offerings. Meat has benefited so much that it now outranks produce as a deciding factor in where people shop “for the first time in a long time,” observes Stein. 

Ground meat sections now provide more choices in aggressively priced convenient items. Ground poultry, beef and pork are often showcased together. The strategy seems to be working. Since 2019, pounds of ground meats sold have increased more than 22%, notes IRI. Beef commands 85% of ground meat dollars. It’s a good value, with price increases in the low single digits. 

“Consumers can comparison shop and are buying lots of ground meat,” says Stein. “It’s versatile, convenient and can be turned into tacos, chili and many things. You can buy two pounds, use one and freeze the other, or use the other pound the next night.” Retailers are also offering value by bundling together multiple meat types at one price, he adds. 

Some meats, like fresh pork, are “consistently viewed as values, even with price volatility,” notes Kent. According to FMI, price per pound only increased 0.3% to $3.18 over the past year. The same goes for fresh poultry. Even with price increases, chicken averages $3.15 per pound, turkey, $4.22. According to the Washington, D.C.-based National Chicken Council, individual chicken consumption was 96.9 pounds this year, versus 58.9 pounds for beef and 51.1 pounds for pork.

“With chicken, consumers can still have a premium experience at a smaller price compared to many red meats,” notes David Zucker, CMO and SVP of e-commerce at Salisbury, Md.-based Perdue Farms. “Nutrition, value and versatility are top reasons for consuming more chicken. Perdue continues to evaluate price strategies, including use of value bundles.”

Zucker cites growing demand for thighs, which have been popularized by wing shops and bars, and whole chickens. Also, use of smokers and air fryers is growing. “Consumers are getting more inventive about preparing chicken,” he says. “We’re updating website recipes to account for this.” 

Private label is also gaining ground across multiple meat segments. FMI’s “Power of Meat 2022” report finds that consumer preferences for private brands reached new highs, at 31% for fresh and 26% for processed. Branded preferences are also high, at 29%.

SpartanNash’s shoppers are purchasing its Our Brands private label products at “two times the pace,” notes Kent. SpartanNash is further investing in this cross-category portfolio to “meet customers’ needs in this inflationary environment,” he adds. Meats include bacon, sausage, lunch meat and meatballs. 

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Perdue Chicken Tots
Launched in 2019, Perdue's Chicken Plus label combines chicken and vegetables, addressing shoppers' desire to increase vegetable consumption.

Succulent, Seasoned and Savory

Interest in convenience-oriented meats is high. According to “The Power of Meat,” they were purchased by 67% of meat customers in 2022, compared with 37% in 2016. Products include pre-marinated, pre-cut or pre-seasoned kabobs; meatloaf; meatballs; pre-marinated chicken wings; and meal kits. Among shoppers, 26% buy such items frequently. Key purchasing drivers are saving time (28%), superior flavor (22%) and “something different” (20%). 

“Consumers continue seeking convenience,” asserts Kent. “The closer you get a product to a ready-to-cook state, the better it performs.” Kent sees a “marked uptick” in seasoned and marinated meats, market-made sausages and trimmed chicken. Many items are prepared in stores. “Taste preferences are becoming bolder, more unique and spicier,” he adds. “Our teams work hard to find the next flavor profile that will resonate.”

Zucker notes that consumers have become “increasingly experimental” with new flavor combinations: “Coming out of the pandemic, unique flavors are driving growth in every category.”

In chicken wings, he cites less interest in saucy offerings, and more in rubs and other flavors “while getting the right crispiness and texture.” Buffalo sauce is seeing more dry-seasoning blends that “get the heat and flavor without the mess,” he observes.

Preparing foods in stores provides fresh, customized offerings, but retailers must contend with cost and availability of suitable labor. Some have opted for centralized commissaries or outsourcing production. “Labor continues to be challenging for grocers,” admits Greenway. “Outsourcing costs less and makes products consistent chain-wide. Think of how many ribs a line manufacturer can prepare hourly compared to someone in a supermarket. It’s dramatically different.”

There are also many branded options. Zucker notes strong demand for Perdue’s Short Cuts (pre-carved chicken breast) and Perfect Portions (individually wrapped skinless, boneless breasts). “They remove some preparation but allow consumers to have control making the meal,” he adds.

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Perdue Thanksnuggets
Introduced last Thanksgiving, Purdue’s ThanksNuggets pair antibiotic-free turkey with potato-seasoned breading.

Nuggets and Finger Foods

Finger foods are another focus, like Purdue’s new limited-edition BBQ Seasoned Pork Bites. They’re breaded and flavored with sharp cheddar and barbecue sauce. Perdue also offers all-natural Chicken Plus, which blends vegetables and chicken in nuggets and tenders. New to the brand this year are Chicken Tots, made from white meat, cauliflower, chickpeas, potatoes and cabbage, and covered with a crunchy panko coating.  

Some finger foods emphasize holidays or are seasonal. Introduced last Thanksgiving, Purdue’s ThanksNuggets pair antibiotic-free turkey with potato-seasoned breading. Meanwhile, this past Halloween, Tyson unveiled Spooky Nuggets, white-meat chicken pieces shaped like pumpkins, bats and ghosts.

Sausages are also popular during fall. This year, Hormel brought back its circa 1968 Little Sizzlers original pork dinner sausage for a limited time under its Black Label Bacon brand. Products were offered at select Midwestern retailers. 

For the near future, inflation shows no signs of slowing, running at a near 40-year high. Fall consumer price index figures indicate that food prices will continue rising at double-digit rates. Additionally, the retail price of food at grocery is rising faster than restaurant prices. How this will further affect meat spending remains to be seen. While some shoppers will seek bargains, others may reduce spending in travel, home improvement or other areas to continue purchasing convenience-oriented or premium meat products. It all boils down to personal priorities. 

    Hard-Boiled Egg-onomics

    Some consumers have found a new way to feather their nests and hedge against rising food prices: They’re raising backyard chickens.

    According to the 2021-22 American Pet Products Association’s (APPA) National Pet Owners Survey, individual chicken ownership climbed from 8% in 2018 to 13% just two years later. Chicken hatcheries are reporting sales increases of anywhere from 100% to 500%, according to  thehappychickencoop.com. Even Amazon is getting in on the action, with almost 100 listings for prefabricated chicken coops and myriad searches for baby chick supplies and nesting boxes.

    Chickens are being raised mainly for eggs, followed by meat. While dodging inflation is a key motivator, consumers also want to make sure chickens are raised naturally, cage-free and in sanitary conditions. Others began raising them as a hobby during the COVID-19 crisis. Additionally, chicken manure is an excellent fertilizer for tomatoes and other vegetables.

    More men than women raise chickens, noted the Stamford, Conn.-based APPA. Among chicken owners, 22% are Millennials and 19% are Gen Zers. Many are affluent and regard chickens as pets.

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