As in other product categories amid high inflation, consumers have increasingly embraced value when shopping for meat, but they also haven’t ruled out opportunities to indulge, retailers said at this week’s Annual Meat Conference (AMC) in Dallas.
“Over the past year, we’ve definitely seen a switch [by shoppers] to more value items. Items like value packs and larger packs that will drive your purchases and drive the amount of meat that you have at home,” David Hess, senior director of meat and seafood at Harris Teeter, told Winsight Grocery Business at AMC, held by FMI-The Food Industry Association and the North American Meat Institute (NAMI). “At the same time, we’re also still seeing good sales on premium items. So we’re seeing both ends of the spectrum—either they’re shifting to value or going to premium and maintaining it, which is a bit interesting.”
According to the FMI/NAMI 2023 “Power of Meat” study presented at the conference, 67% of consumers surveyed think meat prices are higher, and 69% believe poultry costs more. To save money, customers are re-examining the quantity (78%), kind (76%), cuts (74%) and brands (71%) of meat and poultry that they purchase, as well as where they buy it (64%). Also, among the eight in 10 meat consumers changing the amount of meat and poultry they’re purchasing, strategies are equally divided between shifting to smaller packages to save immediately and to larger bulk packs to save over time.
“The trends we see within our demographic, as well as the industry, are that value that I spoke of, whether it is price, value or convenience. They all have to come together to bring [customers] that value statement. So it’s evolving to their needs, what they need at the shelf,” said Crystal Ackerman, vice president of meat and seafood at Winn-Dixie parent Southeastern Grocers, who served as AMC co-chair and as an event speaker.
“At Southeastern Grocers, we’re continually looking not only at the price of product, but also how we deliver,” Ackerman noted. “We have meals that provide convenience. We have easy-to-grab solutions where they can mix and match but provide value, and we’re also going very localized to ensure that their needs are met.”
While the Power of Meat research found that 50% of consumers polled weigh price per pound as the most important factor in purchasing meat/poultry, 53% cited product quality and appearance as the top factor, especially among Baby Boomer and Generation X customers.
“We’ve seen a huge surge in premium meats. So [USDA] Prime [beef] is a big item—every customer is looking for Prime,” said Catie Cantrell, meat director at Heinen’s Grocery Stores. “I feel like customers are at a point where, if they’re going to spend money, they want to buy something that’s at an elevated experience. So I’m finding that they’re either going to the top tier of what we’re offering, or they’re looking for the value cuts on the other end. Items kind of in the middle are struggling, more so than those other sides.”
Creative promotions that offer premium meat and poultry options—especially for holidays and special occasions that have traditionally been foodservice-centric—and recreate restaurant-type meals as an everyday meal opportunity have gained strong traction with consumers, according to the Power of Meat study and AMC speakers.
“Another trend we see is that, when it comes to holiday times or events, customers don’t really look for value. They seem to spend or save their money to really go big for those events,” Harris Teeter’s Hess said.
The Power of Meat report noted that 71% of meat shoppers said they’re eating restaurant meals less often, amid elevated prices, and 87% are trying to recreate restaurant-type meals at home. That translates into 62% of the population, up from 31% last year.
“I think inflation forces a decision for customers to say whether they’re going to eat out at a restaurant three times a week, or eat at home an extra time and not go to the restaurant,” he explained. “Or they traditionally had steak for meal two times a week and now that becomes one time or maybe pork chops or chicken breast, a lower-dollar-value protein. So that’s really where you see those shifts come in. They’re not drastic shifts, but it becomes one meal here, maybe two meals here. You add that up over time and it becomes significant dollars shifting around the category.”
Eighteen percent of customers check social media for meat and poultry promotions before shopping or while at the store. But they’re also using channels such as websites, YouTube, Facebook, TikTok, Instagram and Pinterest to find meal ideas including meat.
“I’m seeing is a lot of this meal inspiration, these restaurant-type meals. Short ribs, osso buco [a veal shanks dish] every now and then gets these little surges based on what people see on social media,” said Heinen’s Cantrell. “So I’m excited to see grilling season, what picks up.”
Retailers said they expect meat promotions to ramp up this year as supply chain issues have settled down in the wake of the pandemic.
“We have stayed strong with promotions through the pandemic. As the supply chain has recovered—it’s not all the way there, but has recovered—you’ll see more and more promotions in the industry, in supermarkets and all the different segments, because you'll be able to supply it,” Hess said. “Retailers will have to use promotions to drive traffic, to offer value and to really entice customers to come in and purchase that item that they’re trying to push.”
Cantrell thinks eating at home should be the crux of grocers’ promotions for meat.
“Bring them into cooking at home. Right now, one of the things we’re trying to do is make eating at home a great experience where you’re not waiting for a special occasion, recognizing that our customers have unique reasons to come into our store,” she said. “Customers are not always shopping with the same [goal]. They may be looking for value in one time. They may be looking to splurge in the next. They may be looking for a special occasion the third time. And we’re trying to understand and communicate with our customers to offer them a solution to any of those points in time.”
Overall demand for meat remains strong, the retailers agreed, and the challenge going forward will be how to best connect with customers and meet their individual needs.
“The trends that have jumped out are really just the resilience and the newness of so many brands coming into this space,” Southeastern Grocers’ Ackerman said. “Pork, poultry and beef are not going to change. But how we package it, how we flavor it, and how we bring it to the shelf and help [customers] cook it is what has changed.”
Harris Teeter’s Hess admitted he’s also trying to figure out a retail channel issue revealed in the Power of Meat study: Supermarkets are leaking market share in meat to big-box players like mass merchants and club stores.
“I’m trying to decipher whether the clubs and mass are doing that well in meat that it’s grabbing the customer’s eyes, or is it a byproduct where they’re going to those stores for other reasons and just happen to be buying meat while they’re there, and that's where the leakage comes in,” he said. “I’m just trying to formulate a way to attack and to get that customer to stay with us.”