Inflation and generational influence are expected to be two of the largest macroeconomic trends to affect chicken demand in 2023.
According to Brian Earnest, CoBank lead economist, animal protein, the economy’s current inflation spike has three different drivers.
- Central banks are “creating more money” to support economic growth, however, the excess has led to higher prices.
- Demand for goods and services has outpaced the supply.
- The rising costs of commodities, such as oil, increases the price of other goods.
Even with inflation, there are opportunities for chicken consumption to hold steady, or even increase. “Consumer spending remains resilient despite measures meant to slow the economy,” Earnest said at the 2023 Chicken Marketing Summit.
Even though chicken is a value protein, data from the USDA shows that as people make more money, they are choosing to include more protein in their diets, and one of the first options is chicken.
“According to data from the U.S. Department of Agriculture, there will be a 5% decrease in beef consumption this year compared to 2022,” said Earnest. “Beef consumption is under additional stress due to droughts affecting forage production.”
Generational differences
Generational influence is another factor reshaping the poultry market and chicken consumption. This is mostly due to Generation Z (Gen Z), born between 1997 and 2012, coming into the buying market with different outlooks and preferences compared to previous generations.
Gen Z is moving away from legacy products, or products that have been well established in the market for years, and towards new products due to their creativity and access to more options that previous generations did not have. “Gen Z has always known technology and had access to a greater number of options,” explained Earnest.
Also, Gen Z‘s overall debt load has tripled in the past two years, which is more than any other generation. However, this means these consumers are gaining confidence spending money, which could be a good thing for chicken consumption.
“It’s tough to be anything other than optimistic for chicken in 2023,” Earnest said.
