Majority of Consumers Can Be Persuaded to Spend More on Meat
The events of the past several years have changed consumers’ ideas of just what premium meat is and in what circumstances they’ll pay more for a better experience.
Of course, consumers will consider grade and variety, such as Angus, but the combination of the COVID-19 pandemic and fears of meat shortages, followed by an inflationary period, has prompted consumers to consider what constitutes enough added value to spend more money as they shop for meat. Health-and-wellness concerns play a part, along with the growing importance of knowing where food comes from. In some cases, consumers who are more comfortable knowing the origins of their meat will go out of their way to shop at sellers they trust. Also, considerations such as grass-fed and natural designations are more attractive to a significant proportion of the eating public.
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As a result, grocers need to thoroughly understand their core meat customers, what they want and how to win more meat sales from consumers who shop their stores but do all or a significant amount of their purchasing from specialty providers.
It’s important to note that 91% of consumers surveyed say that they can be persuaded to spend a little more on meat and poultry, according to the 2024 “Power of Meat” report from Arlington, Va.-based FMI – The Food Industry Association, suggesting that delivery of value messages for premium meat will get the attention of shoppers. A clear value proposition that allows consumers to better assess what they might purchase can draw the 30% of shoppers who account for 66% of dollar sales, FMI notes.
Grocers can capitalize on their relationship with shoppers, but FMI acknowledges that they may want to reconsider operations. With consumers in stores weekly, the opportunity to upsell is always there. As shopper case-ready acceptance reaches a record high, pack size variety, freezer-ready packaging, secondary displays, and cross-merchandising to optimize trips and units per trip can all improve the consumer proposition.
‘A Gentle Nudge’
The impact of price, combined with longer-term demographic shifts, hints at an opportunity to realign assortment, marketing and merchandising to address changing purchase patterns. Inflation may put pressure on consumers overall, but Patrick Fleming, new business development manager at Midan Marketing, a Chicago-based marketing agency specializing in the meat and agriculture industries, says that doesn’t necessarily mean that consumers are shying away from premium meat. Rather, he argues, consumers are making choices in their budgeting, at times cutting back on other items to make premium purchases on those foods, including meat, that make the meal.
Given that many consumers improved their cooking skills during the pandemic, and that restaurant meals are often cut back when consumers are under budget pressure, premium meat is a simple-to-prepare way to get a restaurant-quality meal at home, and so becomes a bargain, particularly if grocers remind their shoppers of that fact. Simple messaging on how premium meat can make a meal special can get a Wednesday shopper thinking about the weekend and how they would like to see a delicious cut of meat come sizzling out of the broiler or off the grill.
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“A gentle nudge can move premium meat up the shopper’s mental page,” advises Fleming.
An understanding of consumer preferences on a community-by-community and even a store-by- store basis is key to maximizing premium meat sales potential. Convenience remains important but takes a backseat to price as consumers balance their spending. Meat and poultry can be found in 87% of home-prepared meals, which reflects a mix of scratch-cooked and semi-and fully prepared items.
Most consumers bought value-added products, typically sold at a price premium, less often in 2023, according to FMI, but that’s the first time in years that value-added meat and poultry sales were down, demonstrating that convenience can get consumers to pay a premium for meat, even if inflation has crimped gains there. However, grocers themselves can help shoppers create meals that they’ll want to make again: 92% of shoppers agree that meat and poultry have a great price/value pairing. So, in-store messaging as simple as reminding consumers that premium meat and a salad can be a great dinner can encourage purchasing, suggests Fleming.
According to Jackie Lopez, director of marketing for Arkansas City, Kan.-based Creekstone Farms: “In the last five years, premium meats have truly come into their own. The 2024 ‘Power of Meat’ report reaffirmed consumers remain keen on recreating a fine-dining experience at home. The data showed us that among the 43% of consumers who dine out less frequently, 75% are trying to create restaurant-style dishes at home. That translates into 32% of the total population.”
In another approach to getting consumers to trade up to premium meat, holidays, special occasions and entertaining are top occasions when grocers can upsell consumers. FMI’s study underscores the need to optimize sales during primary and secondary holidays while recognizing that traditions are changing. As such, grocers should understand what cut or variety of meat shoppers deem healthier, pack sizes or brands they prefer, and what level of convenience they’re seeking, as these are all factors that can get consumers to spend more on a shopping trip.
Meat sales have benefited from a shift in consumers’ perception of protein in their diets so that, today, some 70% of consumers believe meat is an overall healthy choice that provides fuel and essential nutrients. Still, consumers are interested in portion size, variety and suggestions for nutritious choices, although flavor and value factor heavily into the purchase equation. Compared with 2008, protein is a more desirable package callout, while fewer consumers focus on fat, sodium, cholesterol and saturated fat when buying meat and poultry, according to FMI.
Different Views
Anne-Marie Roerink, principal and founder of San Antonio-based 210 Analytics LLC, notes that how consumers look at premium meat is different today, because their preferences are more personalized.
“Premium is definitely a moving target as it relates to consumers,” she says. “Whereas the industry has very specific standards and definitions relative to quality, such as Select, Choice and Prime for beef, premium can mean all sorts of things to consumers. It can be where they buy it, something with a particular production claim, a particular breed, what they’re doing with it, but obviously also the cut and kind they are purchasing. Relative to where, consumers often see purchasing something from the butcher as being more premium. Likewise, in stores, they view meat and poultry sold in the full-service case as being more premium. In some cases, this is absolutely true, with many grocers focused on higher-end beef and pork cuts at the counter.”
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Roerink adds that another consideration is that the consumer definition of premium is related to production claims such as organic, grass-fed or free-range. For many consumers, health, animal welfare and the environment are all interconnected when they think of a better-for-you choice.
“There is certainly a price differential, which also feeds into that premium definition,” she points out.
Additionally, branding continues to play a role in how consumers look at premium meat.
“Breeds such as Angus and Hereford have done a tremendous job in driving a quality and premium image,” says Roerick. “One of the strongest examples there is Certified Angus Beef, that through very precise quality standards has developed a differentiated position in the consumer’s mind by always educating about the intersection between quality and consistency and taste.”
Although it may be a more fragmented segment of the meat business, some traditional considerations continue to weigh heavily when it comes to consumer perceptions of premium meat, even if recent events have had their own particular effects. Take beef, for example.
“Consumers continue to prioritize taste, texture and tenderness when purchasing and consuming beef,” observes Hilary Gerard, director of retail marketing for the North American protein business at Cargill, in Wayzata, Minn. “The pandemic fueled interest in premium cuts, as consumers had more time to sharpen their culinary skills at home and attempted to replicate restaurant meals that were unavailable at the time. While higher-income consumers express a willingness to pay more for premium types of meat such as USDA Prime, Angus, grass-fed, organic and Wagyu beef, we’ve seen inflation impacting some consumers, especially those with lower household incomes.”
Creekstone Farms, for one, has evolved its business in alignment with changing consumer circumstances, notes Ryan Meyer, the company’s SVP of procurement and marketing.
“While Creekstone Farms continues to have strong demand from the foodservice sector, the past few years we’ve witnessed a surge in retail interest,” says Meyer. “In response, we have adapted our operations to ensure a consistent supply of top-tier products for consumers. We take pride in our array of offerings – from high-end steaks for special occasions to practical options like ground beef or pork loins for a weekday meal. We are committed to equipping our retailer partners as the ultimate destination for consumers.”
“Beef consumption had been on the rise prior to the pandemic, but the pandemic broadened and grew the consumer base for premium meats,” says Gerard. “Consumption behaviors have remained consistent over the last few years, with younger consumers, and especially Gen Z and Millennials, driving consumption growth, according to our proprietary research.”
