By Chris DuBois and Jonna Parker, IRI
The COVID-19 pandemic has spurred stronger consumer interest in meat (sorry, vegetarians, though plant-based refrigerated meat alternatives grew too!), with the meat department growing 19.2% in 2020, to $82.5 billion. Meat also won on every lever of growth: Household penetration, dollars/buyer, trips/buyer and meat trips.
Now that we are into 2021, and life is somewhat normalizing and vaccinations becoming more widespread, what's the future for meat going to look like now, and how can manufacturers and retailers keep growth going?
For 2021, there are four major trends we see that will impact purchase decisions in the meat aisle. We know consumers cooking more at home due to the shutdowns led to meal experimentation, and we believe many consumers will still continue to cook at home now that they've become more confident in their ability to make high-quality meals. Premium purchases, new appliances that help in the kitchen and the ease of getting groceries delivered straight to their doors have also supported more meals – and meat – at home.
1. Meet the Confident Cooks
Though only 12% of dollar sales, confident cooks represent 44% of the gains in the meat and seafood category. These cooks have been expanding their repertoires using new types of meat and seafood, such as tilapia, and purchasing less common cuts of meat such as lamb, veal, pork roast and pork ribs. The average U.S. household typically buys 10 different cuts of meat each year, but confident cooks bought 18 different cuts in 2020.
According to Anne-Marie Roerink, principal at 210 Analytics, which regularly partners with IRI on thought leadership, "The meat department's superpower is variety. The pandemic really brought this into focus for consumers who had to make many meals at home."
Who are the confident cooks? They come from several groups spanning across the Midwest to the East Coast. They tend to be affluent, Asian, Black, Hispanic, live in 5+ member households and are young Boomers or Generation X. To reach them, CPG manufacturers and retailers should consider expanding their social media presence with key influencers to win these shoppers.
2. Premiumization Picks Up
Premium purchases greatly enhanced consumers' experiences during COVID-19. Some low-income households spent more to create premium experiences at home, even despite their economic struggles. In the future, we believe consumers will continue to try to replicate restaurant-style meals at home.
Our data shows us that many premium meat cuts outperformed total meat or protein averages. For example, volume sales for prime beef went up 55%, accounting for four times the growth of total beef. Retailers who supported prime beef lines outgrew the retailers who didn't. Product claims such as "wild-caught" and "100% grass-fed" also did exceptionally well in this category.
We expect that premiumization will continue to be a trend for 2021.
3. New Appliances Drive Meat Engagement
Working from home caused a massive shift in the way we eat. Some consumers no longer shared a cafeteria or went to their usual lunch spot. Now, there are 33 million lunch and breakfast occasions happening at home. More planning and prep time go into our meals than ever before. This presents a huge opportunity for brands to engage and innovate with cooking, to help save consumers' time but still give them the quality they crave.
Innovation has taken the form of new appliances such as air fryers, which have experienced 10x growth in the last two years. Pressure cookers have also been trending, with sales doubling each year since 2011. Foods like roasts, Brussels sprouts and French fries are super popular to cook in air fryers; some brands have started putting air fryer direction on their packages, and prepped meals specifically for pressure cookers have so much potential. As a manufacturer or retailer, consider how different items can be combined or created to help consumers easily cook full meals in their air fryers or pressure cookers, taking some of the burdens off of meal planning and making it easier to eat meals at home. Consumers are more focused than ever on health and wellness, so this provides a good opportunity to promote healthy meals.
4. Buying Out of Store
COVID-19 accelerated online grocery orders, especially for fresh foods like meat, as meat e-commerce grew 90% in 2020 and was 10% of overall meat sales. This space will continue to accelerate. Sixteen percent of U.S. consumers used online as their primary way to buy groceries in 2020 during the pandemic, and 81% of online grocery shoppers expect to do this more or about the same even after being vaccinated or restrictions are lifted.
Source: 210 Analytics, Proprietary survey April 2021, IRI E-Market Insights and IRI Market Advantage, CY 2020
In particular, frozen meat and shelf-stable meat were the Nos. 2 and 3 top e-commerce categories last year, respectively, in terms of sales gains online. Again, the opportunity to determine how to help people at home make meals quickly and easily will be critical in 2021. One way to approach this is by marketing through accessible, shoppable recipes online so that consumers can quickly access everything they need to cook a great meal. Also, offering "basket load" discounts for online shopping orders adding on more than one meat item. Too often, online shopping is about list fulfillment. Reminders such as "It's grilling season! Add some fresh ground beef and pre-packaged bratwursts to your basket to save $1 off your total meat purchase" would go a long way to building higher sales – and it's much easier to do this online than physically move items next to each other in store.
We expect that many of the behaviors that consumers have developed due to the pandemic won't fully go away even when the pandemic does. There is certainly pent-up consumer demand to dine out, but it will most likely be a 50/50 split between eating away from home and at home during the second half of 2021. Manufacturers and retailers who keep this fact at the forefront can find ways to create demand for easy restaurant-style meals at home, providing that premium experience for consumers, showing them how to use their appliances for these meals and making it easy to shop online for the ingredients.
For more on these trends, watch our recent webinar "Consumers' Changing Relationship with Meat and Meals," listen to our podcast "Cooking Confidently" or reach out to your IRI representative or IRI@IRIworldwide.com.