By Jonna Parker, Fresh Foods, IRI
If the pandemic has shown us anything, it's that meat's position as a star player in the grocery has only grown. 2021 sales of meat in the U.S. totaled $82.2 billion, an increase of 46% from 2016. Even more importantly, customers spent an average of $86.30 when meat was in their basket – 118% higher than when it wasn't.
The meat department is the undisputed anchor of the store, and the pandemic, as well as recent inflationary pressures both and outside of retail, have only strengthened that. When shoppers choose to upgrade to a more premium meat cut, the basket power is even more impressive. Baskets including steak averaged $108.19, more than double the average overall basket of $50.85. These steak buyers also tended to load up on items such as fresh fish, bacon, root vegetables, deli specialty cheeses, deli service lunchmeats, fresh cooking vegetables, fresh stone fruits, and fresh salads and leafy greens.
For manufacturers and retailers looking to make the most of meat, the data suggests that:
Assortment is key. Compared to pre-pandemic, Americans are buying more meat, more often and in more varieties. In 2021, Americans bought an average of 42 different cuts or kinds in the meat department. Go-to common cuts like ground beef, pork loin and chicken breast represented a lower share of sales as shoppers upped the variety.
A record number of Americans are now heavy meat buyers. 4.2 million more households spent over $600 in meat in 2021 – representing $7.5 billion more in total sales than 2020. These buyers tend to be heavy grocery food buyers in general, with meat as the trip anchor. They make 40 more grocery trips annually than the average American household, and they represent 23 million households.
Light buyers are important too. Frequency is the biggest difference between these buyers and heavy buyers – they make 14 trips annually to buy meat, versus 51 for heavy buyers. But they still spend $73 when meat is in the basket, doubling what they spend when they don't purchase meat. There are more than 63 million households in this category (spending $300 to $600 a year on meat), and they also increased their spending on fresh meat in the past year, spending more on chicken and turkey and less on beef.
Shoppers are concerned about rising meat prices. A January 2022 IRI shopper survey found that 95% of shoppers are concerned about food cost inflation. And 73% cited beef and pork as having noticeably higher prices – a higher percentage than for any other grocery item. In reality, fresh poultry and processed meat aren't among the top 10 categories in price increases. But when meat prices go up significantly, shoppers notice.
Meats with the highest price increases didn't all experience volume declines. The dance between affordability and premiumization is important to monitor. Consumers will spend on more expensive items, including meat, if they:
- Provide a value to their families (such as a larger size to feed many).
- Want to reward themselves or impress others.
- Trust the product attributes or brand.
- Perceive it as cheaper than alternatives in store or out-of-home.
Meat alternative purchases are growing. They grew 2.8% versus a year ago and were bought by 18.6% of households in 2021. But these purchases were generally not by vegetarians – they were by adventurous meat buyers who also spent less on beef and chicken but also spent more on pork, veal, lamb and exotic meats.
Online meat purchases are focused on the basics. Chicken represented 45% of all online meat sales in 2021 – 10 points higher than in-store. And common, versatile cuts like chicken breast, ground beef and ground turkey fared better online than in stores.
Premium products do better in-store than online. People still prefer to buy in-person when they want to impress or entertain with cuts like beef loin, pork ribs, beef ribeye, whole bird turkeys and pork shoulders.
The Four Keys for the Future
While meat departments have thrived throughout the pandemic, what got us here doesn't guarantee future success. Producers and grocers must address the facts that:
- Inflation pressure is real. Shoppers are perceiving the worst when it comes to increasing meat prices. It's more important than ever to understand that marketing meat is more than price – and to be selective and strategic in how and where prices are raised.
- Engaging the next generation is key. Younger consumers can be found in three times more light than heavy meat-buying households. They favor quick and easy cuts, multicultural options and easy dinner alternatives. And they're less driven to switch stores for meat than their predecessors.
- Consumers want solutions, not silos. Cooking fatigue is real and people are still eating more meals at home. Consumers want full-meal solutions incorporating meat as well as options that make impressing and entertaining at home easier.
- The future for meat is bright. Consumers have clearly demonstrated over the past few years that they appreciate the versatility, relevance and choice that meat makes possible. Having a standout meat department is critical.
The pandemic has clarified that shoppers' appetites for meat are only growing greater and more diverse. Through continued innovation in meat variety, meal solutions and strategic pricing, retailers and manufacturers can continue to make the most of meat as the store anchor and a reliable driver of bigger baskets well into the future.
For more insights, view my webinar on meat trends with JBS USA and Associated Wholesale Grocers and/or visit our Fresh Foods page.