The coronavirus pandemic has ushered in new shopping behaviors, including an increase in both meat and online purchases. Meat sales saw a spike of nearly 80% during the week of March 15 over the previous year, according to IRI, which led to depleted shelves. The supply was replenished, and sales have not slowed much. The category saw 51.3% growth for the first week of May, while volume increased 37.2%. Year to date through May 3, meat department dollar sales were up 23.3%, boasting double-digit growth for eight weeks running. Year-to-date volume sales through May 3 were up 17.1% over the same period in 2019.
Stay-at-home orders and limiting foodservice to carryout only has spurred much of this growth as many consumers are now preparing and eating at home all three meals. But consumers are also showing changing habits when it comes to meat purchases. With the majority of meals now prepared at home, consumers are turning to staples and comfort foods, says Joe Heitzeberg, co-founder and CEO of Crowd Cow, an e-commerce-only meat purveyor based in Seattle.
“Now it’s like, how do I feed the kids Monday through Friday and lunch included,” he adds. “And then also people are eating breakfast more, and they’re willing to reach in and cook some bacon or sausage. You can make a pot of chili or chicken, which is nutritious and lower price and everybody likes it. … So we see a lot of demand for those staples. ... We also saw a huge uptake in our premium side of the store, Japanese Wagyu and other things. So really just everything is up.”
Mike Salguero founder and CEO of Boston-based ButcherBox, another e-commerce-only meat purveyor, notes the company is seeing a mix of what customers are ordering. “A lot of members are stocking up on basics like ground beef and chicken breast, while others are sticking to the cuts they normally order month over month but increasing the number of those cuts to their boxes, and then others are leaning toward heartier cuts like roasts, pork shoulders or whole chickens. Those heartier cuts tend to result in more leftovers, which help folks stretch one meal into a few.”
Changing Consumer Habits
Chicago-based Midan Marketing conducted consumer research at the end of April to look at consumers’ changing habits. It found that 60% of consumers will freeze meat/ chicken more often than normal, and 52% will experiment with different ways to cook meat/chicken. Another half are purchasing more meat/chicken per visit or order than normal, with 48% purchasing more ground meat than normal.
This research was conducted right as meat processing plants began facing rolling shutdowns as workers were diagnosed with COVID-19, which limited the meat supply and could dampen the strong uptick in sales retailers have seen in the category. To help keep product in the cases, many retailers implemented purchase limits on meat products. All of this has also caused prices to go up and whether consumers will be willing to continue to pay remains to be seen.
“If history repeats itself, prices will go up but come back down to normal levels,” says Michael Taylor, president of Daymon, a private brand solutions provider based in Stamford, Conn. “Forecasted prices of meat right now through the end of May are showing a 20% increase.” However, on May 13, Tyson announced that it was cutting prices it charges to retailers by 20% to 30% for ground beef, roasts and other beef products.
The struggles at meat processing facilities also have impacted the selection consumers are and will continue to see in the store’s meat cases. Greenwood Village, Colo.- based CoBank estimates that consumers would see 30% less meat in retailers’ cases by Memorial Day. Certain cuts may be hard to come by as processors focus on butchering to produce the most popular items, says Michael Uetz, principal of Midan Marketing.
In early May, the U.S. Department of Agriculture also predicted that U.S. consumers would reduce beef consumption by 5.9% this year.
The pandemic’s social distancing mandates have pushed many consumers online to make grocery purchases and they are not shying away from including meat in their orders. Before the pandemic, Midan Marketing research found that about one-third of consumers (32%) had purchased meat through an e-commerce platform but since the pandemic, another 21% were now purchasing meat online, more than half of consumers surveyed. Another 8% indicated that while they hadn’t yet made a meat purchase online, they planned to in the coming month (May).
Online-only meat purveyors are seeing the increase firsthand. ButcherBox had to institute a waitlist for new customers. “Since about St. Patrick’s Day, we saw quite an increase in demand, so at the end of March, we began the waitlist,” says Salguero. “The decision to go on a waitlist was pretty easy as a waitlist would ensure we could focus on our existing member base and not overwhelm the meat supply we had built up in anticipation of the pandemic. As of May 1, we’ve been slowly able to open the waitlist, but this is a gradual process.”
Brick-and-mortar retailers also had to institute similar waitlists for online orders as their systems quickly became overwhelmed with the influx of new customers due to the pandemic. Ahold Delhaize’s Hannaford banner shut down its Hannaford To Go e-commerce capabilities on March 17 before reopening the service in early April, with temporary changes in product limits and substitutions.
The pandemic has forced e-commerce ahead of previous predictions about adoption rates, but will that trend continue when consumers’ lives eventually return to normal?
“We’re facing a real paradigm shift. We believe people aren’t going to go back to their old ways or they aren’t going to go back to their old ways very quickly,” says Salguero. “We’ve spent a lot of time speaking with experts in habit research and viral research, among other areas, to better understand what to expect in the months to come. Based on those conversations, we are working under the impression that pandemic-like behavior could last into Q1 of 2021. This shift includes purchasing meat and other grocery items online. There is this new notion of do-it-yourself. Whether it’s making sourdough bread, banana bread or whipped coffee, people are enjoying those activities and realizing they’d rather do something themselves, so I think a lot of the new habits people have developed during this time are here to stay.”