Red Meat - UK

In our last report, we concluded that the growth of the red meat market would be based on a larger premium segment. The growth achieved has been greater than expected, partly as a result of active new product development (NPD) in premium products and increased promotion, but also as a result of inflation of red meat prices.

The future is more challenging. The “credit crunch” is making consumers more careful about how they spend their money, trading down to cheaper alternatives, and a shift towards less expensive cuts of meat has been observed in the meat category. Growth rates for organic meats have slowed, and overall volume consumption is constrained by consumers’ concerns over the health implications of red meat. This report considers whether a better strategy in targeting consumers and further development of provenance attributes can offset these negative factors.

Key report themes:

• Two years of significant market growth are coming to an end
• Health concerns act as a barrier to increased red meat consumption
• Provenance is a product attribute that can be further exploited
• More effective segmentation is required to reach lower-consuming target markets

Issues in the Market

Key themes

Definitions

Market in Brief

Positive market growth

Provenance the key driver

Potential to increase

Future

Internal Market Environment

Key points

Health concerns

Figure 1: Agreement with selected lifestyle statements, 2004-08

Figure 2: The benefits and risks associated with red meat, 2008

Vegetarianism

Figure 3: Agreement with selected lifestyle statements, 2004-08

Supply issues

Figure 4: Consumer price index on selected food catgeories, 2005-08*

Figure 5: Ways of saving money when doing grocery shopping in the last 12 months, September 2008

Organic supplies remain scarce

Rise of foodies

Figure 6: Agreement with selected lifestyle statements, 2004-08

Provenance is key

Figure 7: Agreement with selected lifestyle statements, 2004-08

Regional and local sourcing

Production values more important in pork

Endorsement or confusion?

Figure 8: A summary of the main assurance schemes, 2008

Broader Market Environment

Key points

Demographic changes favour red meat market

Figure 9: Implications of projected demographic changes of the UK population for the red meat market, 2008

Increasing the barbecue share

Figure 10: Household ownership of barbecues, 2003-07

Impact of disease outbreaks

Competitive Context

Key points

Red meat performing well

Figure 11: Summary of market strategies in other protein foods markets, 2008

Chilled ready meals

Strengths and Weaknesses in the Market

Strengths

Weaknesses

Market Size and Forecast

Key points

Strong sales growth in 2007

Figure 14: UK retail sales of red meat, by value and volume, 2003-08

High prices starting to bite

Lamb benefits from greater exposure

Figure 15: UK retail sales of red meat, by type, by value and volume, 2003-07

The future

Forecast

Higher prices drive value growth

Figure 16: Forecast of uk retail sales of red meat, by value and volume, 2003-13

Impact of tightening consumer budgets

Segment Performance

Key points

Beef

Figure 17: UK retail sales of beef, by value and volume, 2003-08

Figure 18: UK retail sales of beef, by type, by value and volume, 2003-07

Versatility of mince pays off

Steaks outperform roasts

Pork

Figure 19: UK retail sales of pork, by value and volume, 2003-08

Pork chops give way to belly

Figure 20: UK retail sales of pork, by type, by value and volume, 2003-07

Lamb

Figure 21: UK retail sales of lamb, by value and volume, 2003-08

Lamb over-reliant on roasts

Figure 22: UK retail sales of lamb, by type, by value and volume, 2003-07

Offal

Figure 23: UK retail sales of offal, by value and volume, 2003-08

Companies and Products

Companies

ANM Group Ltd

Anglo Beef Processors

Cranswick PLC

Danish Crown UK Ltd

G rampian Country Food Group

Retailers

Asda

Budgens

Cooperative Food

Marks & Spencer

Morrisons

Sainsbury’s

Somerfield

Tesco

Waitrose

Trade bodies

Agriculture and Horticulture Development Board (AHDB)

QMS promotes red meat from Scotland

Hybu Cig Cymru (HCC)

Overseas suppliers

Product Positioning

Key points

Steak cuts

Figure 24: Prices of typical steak cuts, September 2008

Figure 25: Price (£/kg) comparison of steak cuts between October 2006 and September 2008

Roasting joints

Figure 26: Prices of typical roasting joints, September 2008

Figure 27: Prices (£/kg) comparison of roasting cuts between October 2006 and September 2008

Mince

Figure 28: Prices of typical mince, September 2008

Brand Communication and Promotion

Key points

Adspend jumps in 2007

Figure 29: Main monitored media spend on meat (fresh & frozen)*, 2002-08**

Figure 30: Comparison between main monitored media spend on main meat categories (fresh & frozen)* with fish and poultry, 2005-07

Supermarkets drive increased spend

Figure 31: Main monitored media spend on red meat, 2005-08*

Trade body activity

English Quality Mark boosted

Pork promotion reduces

HCC ups spending on Welsh Lamb

QMS reduces spend

Channels to Market

Key points

Multiple retailers’ share stabilises

Figure 32: UK retail sales of red meat, by type of outlet and value, 2003-07

Regional brands have helped the co-op and direct sales

Multiples capture lamb market

Figure 33: UK distribution of red meat, by value, by sector, 2005 & 2007

Consumer - Who: Usage and Frequency

Key points

Who eats all the meat?

Figure 34: Frequency of eating red meat, April 2008

Figure 35: Demographic profile of frequent (twice a week or more) eaters of red meat, April 2008

How to unlock potential growth with infrequent users of red meat?

Figure 36: Demographic profile of less frequent (between once a fortnight and once a week) eaters of red meat, by gender, age group and socio-economic group, April 2008

Fears over cholesterol limit consumption levels for 55-64

High prices impact male consumers

Figure 37: A comparison of the frequency of eating red meat, poultry and fish, April 2008

Appendix

Abbreviations

Appendix: Broader Market Environment

Figure 46: Trends and projections in UK population, by socio-economic group, 2003-13

Figure 47: Trends and projections in UK population, by age, 2003-13

Figure 48: Trends and projections in UK population, by lifestage, 2003-13

Figure 49: Trends and projections in UK household size, 2003-13

Appendix: Consumer - Who: Usage and Frequency

Figure 50: Frequency of eating red meat, by detailed demographics, April 2008

Figure 51: Average number of days between eating red meat, poultry and fish/seafood at home, by demographics, 2008