Red Meat - US

• How sales of beef, pork, and other meats have differed and what collateral effects beef recalls and bovine spongiform encephalopathy (BSE) outbreaks have had on other red meat
• What retailers are doing to promote private label meats
• Why there is a shortage of natural, organic, and kosher meat
• How consolidation has affected the beef packing landscape and why it has spurred legal action.
• How Hispanic respondents' views on red meat, soy products, and the environment present a challenge for marketers
• Why black respondents' views of red meat and health are more negative than other races/ethnicities
• How use of ground beef based on household income may differ from conventional wisdom
• Which consumers are cutting back on red meat for financial reasons and who is cutting back for health reasons

SCOPE AND THEMES

What you need to know

Definition

Data sources

Sales data

Consumer data

Abbreviations and terms

Abbreviations

Terms

EXECUTIVE SUMMARY

Challenges abound

Foreign trade helps U.S. suppliers sell more

Restaurants compete for shrinking food dollars

Declines in 2005 set market back for years

Economy and food budgets shrink

Changing health trends affect both amount and type of red meat demand

Recalls keep beef in the news

Beef packing consolidation continues and draws fire

FDM frozen and refrigerated red meat

Innovations benefit producers and consumers

Consumer usage and preparation of red meat

Consumer purchasing and knowledge

Consumer attitudes toward meat

Black respondents’ views on beef differ from whites’ and Hispanics’

Hispanics hold “greener” views on meat

MARKET SIZE AND FORECAST

Key points

Diet trends, food safety concerns affect sales

Figure 1: Total U.S. sales and forecast of red meat, at current prices, 2003-13

Figure 2: Total U.S. sales and forecast of red meat, at inflation-adjusted prices, 2003-13

Wal-Mart sales

COMPETITIVE CONTEXT

Key points

Prices influence choice of meat

Figure 3: Protein sources’ retail and wholesale prices, 2003-09

Per capita consumption of beef on the decline, while pork rises slightly

Figure 4: Per capita red meat consumption, 2006 and 2008

Geopolitical matters impact foreign trade activity

Red meat imports on the decline due to labeling requirements and low supply

Figure 5: Beef and veal imports, 2005-07 and January-September 2007 and January-September 2008

Exports struggling to top pre-2003 levels

Figure 6: Beef and veal exports, 2005-07 and January-September 2007 and January-September 2008

Import levels of Mexican pork in jeopardy

Figure 7: Pork imports, 2005-07 and January-September 2007 and January-September 2008

Relations with Mexico and Russia have potential to affect pork exports

Figure 8: Pork exports, 2005-07 and January-September 2007 and January-September 2008

Restaurants and retail competing for food dollars

Competing with a meatless lifestyle

SEGMENT PERFORMANCE

Key points

Market has yet to recover from 2005 setback

Figure 9: U.S. sales and forecast of red meat at current prices, by segment, 2003-13

Figure 10: U.S. sales of red meat, by segment, 2006 and 2008

SEGMENT PERFORMANCE—BEEF

Key points

BSE setback and recalls continue to hamper growth

Muscle cuts slightly outweigh ground beef

Price increases drive sales

Figure 11: U.S. sales and forecast of beef, 2003-13

SEGMENT PERFORMANCE—PORK

Key points

Lower demand and prices

Several new natural pork lines introduced

Figure 12: U.S. sales and forecast of pork, 2003-13

SEGMENT PERFORMANCE—OTHER MEATS

Key point

Lunchmeat gains dampened by mutton/goat/game declines

Figure 13: U.S. sales and forecast of other meats, 2003-13

RETAIL CHANNELS

Introduction

Key point

Supercenters grab share from supermarkets

Figure 14: U.S. retail sales of red meat, fish, and poultry, by retail channel, 2006 and 2008

RETAIL CHANNELS—SUPERMARKETS AND SPECIALTY FOOD STORES

Key points

The $10 meal

Promoting private label meat

Figure 15: U.S. sales of meat, fish/seafood, and poultry at supermarkets and specialty food stores, 2003-08

RETAIL CHANNELS—SUPERCENTERS AND WAREHOUSE CLUBS

Key points

Strong sales for low price destination

Dinners under $10 and daily meal suggestions online

Supercenters downsize

Figure 16: U.S. sales of meat, fish/seafood, and poultry at supercenters and warehouse clubs, 2003-08

RETAIL CHANNELS—PACKAGED RED MEAT ONLY

Key point

Share smaller but growth in mass channels still evident

Private labels versus case ready in refrigerated meat section

Figure 17: FDMx sales of packaged red meat, by retail channel, 2006 and 2008

Figure 18: FDMx sales of packaged red meat at food stores, 2003-08

Figure 19: FDMx sales of packaged red meat at drug stores and mass merchandisers, 2003-08

MARKET DRIVERS

Key points

Economy tightens food budgets

Figure 20: Seasonally adjusted unemployment rate, 16 years and older, by month, 2000-08

Beef recalls affect more than beef

Demand for natural and organic meat drives pricing

LEADING COMPANIES

Key points

Consolidation of beef industry continues

Shortages of kosher beef

High feed prices making meat production unprofitable

MAJOR SUPPLIERS

Tyson Foods Inc.

Cargill Meat Solutions

Smithfield Foods

Swift & Company

NATURAL AND ORGANIC PRODUCERS

Coleman Natural Foods

Laura’s Lean Beef

Niman Ranch

BRAND SHARE—FDMX SALES OF REFRIGERATED AND FROZEN PACKAGED MEAT

Introduction

Key points

Recalls affect largest FDM supplier

Natural suppliers’ sales jump

Mid- and value-priced branded frozen meats grow

Figure 21: FDMx brand sales of refrigerated and frozen packaged meats in the U.S., 2007 and 2008

BRAND QUALITIES

Key points

Bubba Burger

INNOVATION AND INNOVATORS

New cuts of beef with catchy names lure cash-strapped consumers

Angus comes to private label

Gluten-free

Uncured increasingly appearing

ADVERTISING AND PROMOTION

Key points

Message: Red meat as a luxury

Figure 22: Omaha Steaks television ad, 2007

Figure 23: Certified Angus Beef television ad, 2008

Message: If it’s not quick, at least it’s easy to prepare

Figure 24: H.E.B Fully cooked Brisket television ad, 2007

Message: Red meat can be healthy

Figure 25: Yama Beef television ad, 2008

Message: New cuts mean steak is still an option even when money’s tight

USAGE

Key point

Despite rising prices, red meat is a key part of most diets

Figure 26: How often red meat/poultry/fish/seafood are eaten, by type, September 2008

Dollar and value menus may beat out cooking burgers at home

Figure 27: Incidence of household use of red meat, by household income, April 2007-June 2008

Consumers shy away from cooking trial and error with expensive cuts

Figure 28: Types of red meat eaten, at home vs at restaurants, September 2008

Older adults more likely to include red meat in their meals at home, but not when dining out

Figure 29: Average number of meals eaten per month that include red meat, at home vs at a restaurant, by gender, age, race/Hispanic origin, region and presence of children, September 2008

HOW MEAT IS PREPARED

Grilling is preparation of choice for beef

Figure 30: How red meat/poultry/fish/seafood is prepared, by type, September 2008

Men prefer the grill and the microwave for preparation

Figure 31: How beef is prepared, by gender, September 2008

Older consumers more likely to prefer their meat medium rare

Figure 32: Preferences for red meat doneness, by age, September 2008

PURCHASE AND CONSUMPTION

Female shoppers suffer sticker shock

Figure 33: Purchase and consumption behaviors regarding red meat, by gender, September 2008

Younger consumers need to see the benefits of eating red meat

Figure 34: Purchase and consumption behaviors regarding red meat, by age, September 2008

Celebrity tie-ins may help to educate consumers

Figure 35: Purchase and consumption behaviors regarding red meat, by household income, September 2008

ATTITUDES AND MOTIVATIONS

Older consumers least confident in safety of food supply

Figure 36: Attitudes regarding red meat and food safety, by age, September 2008

Chicken cited as posing greatest risk of causing illness

Figure 37: Attitudes and opinions regarding red meat/pork in comparison to other meat types, September 2008

RACE AND HISPANIC ORIGIN

Key points

Whites significantly more likely to use beef

Figure 38: Incidence of household use of red meat, by race/Hispanic origin, April 2007-June 2008

Black respondents’ preference for oven cooking may be tied to quality of meat

Figure 39: How beef is prepared, by race/Hispanic origin, September 2008

Black respondents much more likely to prefer their meat “well done”

Figure 40: Preferences for red meat doneness, by race/Hispanic origin, September 2008

Hispanics more open to meat alternatives

Figure 41: Purchase and consumption behaviors regarding red meat, by race/Hispanic origin, September 2008

Black respondents not convinced that red meat is a healthy option

Figure 42: Attitudes regarding health, diet and red meat, by race/Hispanic origin, September 2008

Black respondents least likely to doubt safety of food systems

Figure 43: Attitudes regarding food safety and environmental concerns, by race/Hispanic origin, September 2008

APPENDIX: OTHER USEFUL CONSUMER TABLES

Household consumption of red meat

Figure 44: Incidence of household use of red meat, by age, April 2007-June 2008

Attitudes regarding health, diet and red meat

Figure 45: Attitudes regarding health, diet and red meat, by age, September 2008

Attitudes regarding red meat and the environment

Figure 46: Attitudes regarding red meat and environmental concerns, by age, September 2008

APPENDIX: LAMB AND MUTTON IMPORTS/EXPORTS

Lamb

Figure 47: Lamb imports, 2005-07 and January-September 2007 and January-September 2008

Figure 48: Lamb exports, 2005-07 and January-September 2007 and January-September 2008

Mutton

Figure 49: Mutton imports, 2005-07 and January-September 2007 and January-September 2008

Figure 50: Mutton exports, 2005-07 and January-September 2007 and January-September 2008

APPENDIX: TRADE ASSOCIATIONS