KANSAS CITY – Analysts that track the food manufacturing industry are trying to figure out which consumer behaviors will persist as states begin to ease pandemic-related restrictions. Larry Levin and Chris DuBois of market research firm IRI explained the major themes emerging from their research that will drive growth in the meat department and the CPG segment in a post-pandemic world. Their presentation was part of the 2021 Meat Conference, hosted by FMI – the Food Industry Association and the North American Meat Institute (NAMI).
“These are big platforms of innovation, big changes that, if you get behind these as a company and if you get behind these as a brand or a retailer, you’re going to grow faster than your competition,” Mr. DuBois said. “These are the big levers that we think were not only a big deal in 2020 but beyond as well.”
The confident cook
A higher comfort level among consumers in the kitchen drove 44% of gains in the meat segment, according to IRI. The Power of Meat study echoes this observation.
“The rapid increase in the number of home-prepared meals with meat/poultry, particularly among demographics that were mostly eating out before, has resulted in more people feeling they at least know meat basics,” the study said.
Currently in its 16th year, the Power of Meat, sponsored by Cryovac, a division of Sealed Air, and conducted by 210 Analytics, delves into the meat buying and consumption habits of consumers.
Mr. Levin said the confident cooks and cooking enthusiasts are slightly more affluent with larger households, and older children. These shoppers also are ethnically diverse. These high meat IQ shoppers also tend to prepare a greater number of dinners with meat and poultry, according to the Power of Meat. And they tend to have a greater range of kitchen appliances like Instant Pots and air fryers.
“The confident cooks and the cooking enthusiasts took this opportunity to drive more creativity in their houses, and it’s really reflected in the fact that the number of cuts of meat and fish that people bought in this last year — coming into the COVID environment — the confident cooks bought a little under 11 different types of meat and fish prior to COVID,” Mr. Levin said. “Coming out of COVID, they increased by 75% the types of meat and fish they purchased, now having upwards of 18 different cuts of fish and meat that they bought.”
A second theme uncovered by IRI research is the evolution of premiumization. Mr. DuBois said significant growth in sales of premium and super-premium food items occurred throughout the store. This trend toward premiumization cuts across income levels, so it’s not solely driven by “…rich people buying more stuff.”
“That’s partly because we see a few dynamics going on,” Mr. DuBois said. “It’s not about expensive products; it’s about making my life better. It’s about simplifying packaging to make my meal easier to cook. It’s making it easier, more flavorful, more accessible. Or it could be that it’s about bringing that restaurant experience back home at a much better price.”
Consumers were willing to pay more for premium-level proteins, IRI found. Prime beef was a prime example.
“Prime beef was one area that I saw grow, and that’s a classic, bring-the-restaurant-home type meal that hadn’t been there," Mr. DuBois said. “That explosion in growth and volume was tremendous all the way through; we saw a 4x change. Who’s buying? It goes right back to what Larry talked about, the same SKUs as the confident cook, the same SKUs to some degree as the cooking enthusiasts.”
New eating occasions
The work-from-home and school-at-home state of affairs spurred by pandemic-related lockdowns has led to new eating occasions or more emphasis on the breakfast and lunch dayparts.
“Three-quarters of meat shoppers who increased meat purchases since the start of the pandemic point to more at-home dinners as a reason,” the Power of Meat study stated. “While dinner has always been the most important meal occasion for the meat department, the pandemic prompted important inroads into the lunch and breakfast occasions as well.”
The study found that 56% of meat shoppers bought more meat/poultry because of preparing more lunches at home. This figure was even higher among those now working from home, at 65%, and those working a mix of at home and at the place of business (67%).
The federal government conservatively estimates that 20% to 25% of the working population (roughly 155 million people) will be working from home, up from just 7% of the working population working from home in 2017.
“That’s a displacement; that’s a big change from not going to the cafeteria at the office,” Mr. DuBois said. “That’s a big change from not going to a downtown business location commuting.” This new dynamic represents a significant opportunity for food manufacturers and grocers to innovate and offer products that help consumers plan for meals.
“If you think of Egg McMuffins and going to McDonald’s, maybe that Egg McMuffin looks a little different at home. Do you bring some of the foodservice items over? What about lunch? Does Uber Eats win that? Does McDonald’s win that? Or does the supermarket and the manufacturers behind it find solutions that make a difference?”
Emergence of e-commerce
Finally, e-commerce received a huge boost during 2020 as more consumers took the leap and ordered groceries, including fresh meat, from online platforms.
“The tremendous uptick in online shopping has changed the who, what and how in many ways,” according to the Power of Meat. “While older Millennials remain the most likely online shoppers, more Boomers, singles, small town and rural shoppers and cohorts that were lagging in online engagement before at least tried online shopping. With Millennials’ very different item and brand selection than their older counterparts, online baskets are rapidly changing.”
“E-commerce is not a ‘nice to have’," Mr. Levin said. "It’s a ‘need to have’.”