The new consumer behaviors for poultry’s watch list

COVID-19 has changed consumer behavior around the world offering a number of new opportunities for chicken and egg producers.

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The pandemic has seen demand for e-commerce grow, and food producers will have to adapt their offerings to succeed in this channel. | ipopba | iStock.com
The pandemic has seen demand for e-commerce grow, and food producers will have to adapt their offerings to succeed in this channel. | ipopba | iStock.com
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Anyone who follows consumer behavior, be it in regard to poultry meat or eggs or any other staple of the supermarket, cannot have failed to notice that significant changes have taken place since the emergence of COVID-19.

While the panic buying that took place at the start of the pandemic may now be consigned to history, some of the changes resulting from the emergence of the novel coronavirus will stay with us.

Earlier in 2021, WATTPoultry International organized a series of webinars looking at how COVID-19 has changed not only how producers produce but how consumers consume. In the second of the three-part series, industry experts gave their views on the latter of these two topics, examining how consumer behavior has changed and the directions in which it might further evolve.

According to Chris Dubois, senior vice president at IRI, there are now a number of new market drivers that producers need to pay particular attention to.

Cooking behavior 

The pandemic has changed cooking behavior. In the U.S., Dubois points to two new groups, which he calls the confident cooks and the cooking enthusiasts. The former group make up approximately 8% of the population and the latter 22%. Together, these two groups accounted for 97% of the increase in incremental growth of meat cut sales in 2020.

The confident cooks tend to be those consumers that are more affluent, have larger households and older children, and it is not simply that they are buying more, but what they are buying has changed, too. The types of purchases made by these groups, for example seafood, suggest a greater confidence in food preparation.

Bringing the restaurant home

A theme consistently heard from consumers is that they want restaurant quality at home. As economies re-open, consumers will eat out again, but some of this changed behavior will last, particularly as consumers have learned that they can enjoy good food at home, but spend much less.

Premiumization

It is not simply that consumers are putting more effort into food preparation, they now increasingly want higher quality food—demand for premium products has grown.

This is happening in the U.S. and numerous other markets, across product categories and among low-, middle- and high-income consumers.

The trend, however, is particularly strong among blue collar families, and the idea that premium is simply for the wealthy no longer holds true. It is being driven by a desire to make lives better. Putting a better meal on the table, or a better brand, is what is increasingly appealing, and this appeal is universal, echoing the trend of brining the restaurant home.

New locations

The pandemic has seen numerous employees working from home. In 2017, 7% of the U.S. working population did so from home. In 2020, this rose to 33%, and this change has created numerous new in-home meal occasions, shifting consumption away from outlets on the road or in town centers.

As economies return to normal, significant numbers of workers are expected to continue working from the home office, offering new opportunities for those companies that are able to innovate and target them.

As part of this trend to more home eating, consumers have invested in kitchen appliances, such as air fryers and pressure cookers, giving them new ways to cook. In the frozen category, there are now, for example, pressure cooker-ready meals.

Another trend proving to be increasingly popular is recipe websites offering click-through to purchase ingredients in-store for subsequent collection.

Buying beyond the store

E-commerce may have been expanding for some time, but 2020 was a fulcrum moment, pulling changes forward by four or five years. It now accounts for 11% of purchases across all channels.

This change means that food producers need to interact with consumers differently. Some big brands that have been successful in-store have not garnered the same loyalty online, while on-pack promotions, for example, may result in shelf-standout, but not be so successful on a webpage.

Discounting

The tends identified by Dubois were echoed by Professor David Hughes, emeritus professor of Food Marketing at the U.K.’s Imperial College London, and visiting professor at the Royal Agricultural University.

He noted that home working is leading to more home meal preparation and snacking, and to a rise in demand for frozen food, locally purchased food, and a reliance on trusted brands.

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 Consumers goring interest in social issues will put ever more pressure on the poultry industry, which must be in a position to respond, argues Hughes.

However, COVID-19 is resulting in polarization of both income and markets.

The low wage, or gig, workers have fared particularly badly during the pandemic, while white collar workers that could work from home have done so and not had a hit to their income, in many cases.

The impact on the poorer segment of society is worldwide. Numerous retailers have engaged in a price war to cater to this group and any price war puts pressure on retail margins and subsequently on producer margins.

Hughes, however, has also witnessed the change in demand to higher quality food, citing the Chinese market, which, he noted has moved over the last 15 years from being a huge, relatively low-priced mass market, to one with much more segmentation with premium prices at the top end.

Fragmentation and segmentation bring numerous opportunities for chicken and, to a lesser extent, also for eggs.

It will be where poultry producers are able to differentiate and where most profit growth will occur in the future. Standard chicken will simply attract a standard price, but those birds that are reared free range, or with provenance claims, for example, will be where producers will do well.

This demand for non-standard birds is growing around the world with different markets having different preferences.

Social pressures

As consumers are favoring certain ways of producing foods, they are also rejecting others. There are a number of social issues that are increasingly linked to food products and, post-COVID, they will increasingly disrupt markets.

Take, for example, concern for the environment. While the chicken and egg industries may already be seen in a favorable light where environmental issues are concerned, producers need to be aware of change.

Hughes warns that eco- or enviro-labels may not be so very far away. These labels are already being used in some European supermarkets and they may become more widespread. If chicken and egg producers want to continue to be seen in positively, they need to know how they will be judged.

Looking longer term, the future for chicken and eggs is undoubtedly bright. The global population continues to grow, and it is growing fastest in those areas where per capita meat consumption is low — Africa and Asia. Income may be rising in these continents, but it will still act as a constraint, meaning that lower priced proteins, such as chicken, eggs and fish, will be the main beneficiaries.

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