Value-added meat shows major COVID-19 related gains

As pandemic shopping patterns started to unfold, many retailers had limited ability to create value-added items in-house, due to a lack of available labor hours. However, case-ready value-added items did very well.

With more consumers indicating they are struggling with weekly meal planning and coming up with new recipes, value-added meats will likely continue to see strong sales in weeks to come (IRI).
With more consumers indicating they are struggling with weekly meal planning and coming up with new recipes, value-added meats will likely continue to see strong sales in weeks to come (IRI).

As pandemic shopping patterns started to unfold, many retailers had limited ability to create value-added items in-house, due to a lack of available labor hours. However, case-ready value-added items did very well. In all, value-added meat sales increased 29.2% between March 15 and July 12 versus the same period year ago. Given the enormous conventional sales, value-added shares dropped slightly, with the exception of turkey.

Value-added meat has been a growth driver for several years, based on the combination of a higher consumption frequency and an increase in household penetration. Demographically and behaviorally, core users skew toward younger shoppers in urban areas, with both a high level of weekly spending and number of trips.

This exact shopper group is already in, or entering into, their prime spending years. Therefore, value-added meat and poultry have been a growth driver for the department, with the overall value-added share increasing to 9.5% in the 52 weeks ending right before the start of the pandemic purchasing.

With more consumers indicating they are struggling with weekly meal planning and coming up with new recipes, value-added meats will likely continue to see strong sales in weeks to come. 

Double-digit dollar gains

The meat department has ruled the fresh perimeter since the onset of the pandemic. With 62% of the year behind us, meat department sales have already surpassed more than 77% of 2019 sales. Everyday demand continued to carry fresh and processed meat sales well above prior year levels for the week ending August 16. This was the sixth of eight non-holiday weeks between Independence Day and Labor Day. New COVID-19 cases started to moderate in many states and the federal unemployment benefit that expired at the end of July was extended, albeit a lower amount than previously.   

The net result of all the positive and negative forces for the meat department was double-digit dollar gains, at +16.1% during the week ending August 16 versus the comparable week year ago.  This was up slightly from the prior two weeks and the 23rd week of double-digit dollar gains. Volume increased 6.7% the week of August 16 versus year ago — also up slightly from 5.9% the week prior. At an average of $3.85 per volume across all meats during the week of August 16, prices were flat against the prior week’s $3.84 per pound.

So far during the pandemic, starting March 15 through August 16, dollar sales are up 32.3% and volume sales have increased 19.6% versus the same period last year. This translates into an additional $8.5 billion in meat department sales during the pandemic, which includes an additional $3.9 billion for beef, $1.2 billion for chicken and $881 million for pork. Unit sales continue to do well, with 14.8 million more transactions during the week of August 16 compared with same week year ago and 882 million more meat packages sold for the department since the pandemic began. 

What’s next?

Both consumer concern and economic pressure remain high, but seem stable for the moment. The economic pressure typically expresses itself in a greater search for value, whether promotions, private brands, cheaper kinds or cheaper cuts. Back-to-school season is in full swing, though it looks very differently from prior years in most states. This will continue to impact year-over-year trend lines, particularly for meats affected by breakfast and lunch occasions with many more children at home participating in virtual education.

Between the continued social distancing mandates, highly elevated consumer concern about the virus, economic pressure and the impact of virtual schooling, meat sales are likely to hold well above 2019 levels for the foreseeable future.

View our continuing coverage of the coronavirus/COVID-19 pandemic.

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