The Red Meat Market Today
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The Red Meat Market Today
What is driving or hinderingthe red meat market?
May 8, 2014
Agenda
• Market Drivers– Beef Sales and Forecast– Price– Health – Consumer Preference
• Beef Consumption• Millennial Generation
2
Market drivers
3
Obesity Trends Among U.S. Adults
Beef Cow Inventory:Is a Larger Herd on the Way?
Years
Mill
ion
Head
4
5
Another 700 million people in the next decade
Remember only 4 percent is in the U.S.
World Population Growth
6
Market drivers – Cost of Food
7
In the News – Rising price of Food
8
Source:
Red Meat Sales and Forecast
Mintel/based on Information Resources, Inc. InfoScan Reviews; Bureau of Economic Analysis; FreshLook Marketing Group
Total U.S. sales and fan chart forecast of red meat, at current prices, 2008-18
9
Source: Mintel/Based on Information Resources, Inc., InfoScan Reviews; Bureau of Economic Analysis; FreshLook Marketing Group
Beef sits atop the red meat category
Total U.S. retail sales of red meat, by segment, at current prices, 2011 and 2013
Beef Pork Other0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
34,864
14,225
1,375
36,951
14,712
1,465
2011 2013 (est.)
$ m
illio
n
10
Total Meat CategoryPound Share % in Total US Over Time
11
How Much Are Consumers Willing to Pay?
12
Reasons Reportedly Consuming Less Beef
Limiting cholesterol or fat
Health reasons
Other meats seem healthier
Eating more plant-based protein
Concerned about “factory farming”
More concerned about price
Too expensive relative to other meat
Prefer other meal options for taste
Among consumers (17%) who feel they are eating less beef
Source: Consumer Beef Index,July 2013
13
Obesity Trends* Among U.S. AdultsBRFSS, 1990, 2000, 2010
(*BMI 30, or about 30 lbs. overweight for 5’4” person)
1990
No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%
2010
2000
Market Drivers - Health
14
“Global obesity is a mega-investment for the next 25 years. Obesity may be the most pressing health challenge facing the world today and it will shape thinking by policy makers and
boardrooms around the world”
Industry Responding to Shifting Environment
15
Obesity Rates
Obesity will drive the health discussion in America• Obesity drives many other chronic
health conditions … coronary heart disease, diabetes
• Average American youth watching 50 hours of electronics, including 25 hours of TV per week
• Fat and calories are in the cross-hairs
What this Means for Red Meat:• Nutrition debate will continue … labeling, “good
and bad food” dialogue, search for solutions• Americans will seek guidance, diets, strategies
for eating
Sources: (1) ISIPP Publishing(2) Virginia Tech Cooperative Extension(3) Center for Disease Control and Prevention, 2008(4) UN Food and Agricultural Organization, 2004
U.S. Population Classified Overweight
34%
U.S. Population Classified Obese
34%
16
Source: Mintel
More consumers cutting back on red meat
“You’ve indicated that you are eating less red meat this year compared to last year. Please tell us why. Please select all that apply?”
I’m buying better quality red meat this year, but less of it
I’m dieting and that means eating less red meat
I’m watching my cholesterol and that means less red meat
It’s too expensive to buy as often as I’d like to
I’m trying to eat healthier and that means eating less red meat
0 10 20 30 40 50 60
16
19
32
36
57
All (Base: 729)
% of consumers
17
Reasons Reportedly Consuming Less Beef
Limiting cholesterol or fat
Health reasons
Other meats seem healthier
Eating more plant-based protein
Concerned about “factory farming”
More concerned about price
Too expensive relative to other meat
Prefer other meal options for taste
Among consumers (17%) who feel they are eating less beef
Source: Consumer Beef Index,July 2013
18
U.S. Consumer Interest in Protein Grows
• Protein is #1 nutrient that is growing in interest, among consumers who read labels.
• Aging consumers concerned about muscle mass expected to turn attention to protein foods.
19
Source: 2012 Food Marketing Institute Shopping for Health Survey
Source: Institute of Food Technologists, 2012
• “It is important for food and beverage marketers to highlight wherever possible that their products are a good source of lean protein.”
NPD Food and Beverage Industry Analyst, IFT 2014.
Market drivers – Consumer Shifts
20
State of the Consumer• Several other forces are shaping what the American
household looks like• 1-2 person households are now 62% of the total households
Source: U.S. Census Bureau
62%
38% 1-2 person households3+ person households
What this Means for Beef:• Lots of merchandising options in the store are needed 21
From 2010 to 2050:• Hispanics are anticipated
to grow from 16% to 30% of households
• Asians from 5% to 9% • African Americans from
14% to 15%• The newest ethnic trend is
“multi-racial” … only 2% of population in 2010, but it is a sign of the time for Millennials
0%
5%
10%
15%
20%
25%
30%
16%
5%
14%
2%
30%
9%
15%
2010 2050
?
State of the Consumer – Ethnic Changes
Source: Bureau of Labor Statistics
What this Means for Red Meat:• Beef must work to maintain
and broaden its appeal to all ethnic groups
• Culinary tastes will shift 22
State of the Consumer – Busy Lifestyles
• 70% of women are working
• Average work night dinner expectations:
What this Means for Red Meat:• Convenience one of the drivers of growth • How do we make all red meat more convenient?
40 minutes from start to table
60 minutes from start to table
Too long for 31% of consumers
Too long for 70% of consumers
Sources: (1) Bureau of Labor Statistics(2) Convenience Framework, Dec. 2010
23
• A study conducted by FMI – Food Marketing Institute found:– 72% of shoppers decide what to have for dinner that day– 1 in 4 shopper (24%) decide what to have for dinner within one hour
before eating!
• Only about half of shoppers make most dinners at home with the ingredients they have on hand. – Half of shoppers buy frozen, fresh, prepared, or ‘fill in ingredients’ for
a meal or get take-out from restaurants for dinner at least a few days a week.
• To most consumers it is acceptable to take 30-40 minutes to prepare and eat a red meat meal – other meals the expectation is 20 minutes! FMI, Shopping for Health 2011 Study
24
State of the Consumer – Lack of Planning
Source:
Red meat consumed by 90% of consumers at least once a month
Mintel“How often (if at all) do you personally eat each of the following items at home?Please select one per type.”
Lamb (fresh or frozen)
Other red meat (e.g., buffalo, ostrich, venison; fresh or frozen)
Ham (other than deli meat)
Pork portions, fillets (bought fresh or frozen)
Beef portions, steaks, fillets (that is cooked at home from frozen or fresh)
Beef (that is bought ground – Either fresh or frozen)
0% 20% 40% 60% 80% 100%
15
18
51
67
74
83
25
20
33
19
17.5
10.5
60
62
16
14
8.5
6.5
At least once a month Every 2-3 months or less frequently Do not eat% of consumers
Base: 2,000 internet users aged 18+25
Consumption Frequency – Servings Per Week
Past WeekServings (mean)
July 2013
Source: Consumer Beef Index,July 2013
26
Source:
Hispanics are above average red meat consumers
Mintel“Do you personally eat each of the following at least once a month at home?”
Ground beef
Beef por-tions,
steaks, fil-lets
Pork por-tions, fillets
Ham Other red meat
0
10
20
30
40
50
60
70
80
90 85 82
7061
24
8272
67
49
17
Hispanic (Base: 298) Not Hispanic (Base: 1,702)
% o
f con
sum
ers
27
28
the millennial
• Born 1980 through 2000• 80 million strong• The Net generation, Gen Y,
Echo Boomers
• Optimistic• Always connected• Institutions are irrelevant• Fast multi-taskers• Connected with parents• Feel entitled• Educated, little experience• Not loyal to brands or
employers
Millennials
The Millennial Generation: “Things aren’t perfect. I need you to be...”
SOURCE: Millennial Generation and Beef, Conversion, December 20112929
Millennials may pay more for food
30Source: Jefferies AlixPartners
Base: Split sample (N = 505) Ranked by at-home importance Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home.
Agree Completely/Somewhat
Key: Significantly lower than non-segment ( )
What Millennials Think What Millennials Want
Millennials don’t know how to cook beef and have disappointing results with steaks & burgers.
Consumer Beef Index – Feb. 2013Millennials & Beef - 2011
Millennials: Beef’s Performance & Information Needs
31
Millennials: Beef’s Performance & Information Needs
Agree Completely/Somewhat
Base: Split sample (N = 505) Ranked by at-home importance Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home.
Key: Significantly lower than non-segment ( )
Consumer Beef Index – Feb. 2013 Millennial s & Beef - 201132
Source: Mintel
Prepared products appeal to youngest consumers, men
“Do you tend to buy red meat products that have been partially prepared for you?”
Age 18-24 (Base: 206)
Age 25-34 (Base: 297)
Age 35-44 (Base: 308)
Age 45-54 (Base: 331)
Age 55-64 (Base: 246)
Age 65+ (Base: 285)
05
101520253035 32
18 1511 13 12
% b
eef a
nd re
d m
eat
cons
umer
s
Age 18-24 (Base: 108)
Age 25-34 (Base: 188)
Age 35-44 (Base: 219)
Age 45-54 (Base: 250)
Age 55-64 (Base: 200)
Age 65+ (Base: 218)
05
10152025 22 20
14
47 9
% o
f por
k co
nsum
ers
33
Beef and red meat consumers
Pork consumers
Source:
Improved packaging may appeal to consumers
Mintel
“Please indicate which of the following statements, if any, about beef and pork products you agree with. Please select all that apply.”
I would like to see more on-package recipe ideas
I would like to see more individual-sized portion packs of red meat
I would like to see more resealable meat packages
0 5 10 15 20 25 30 35 40
18
22
30
23
26
35
Female (Base: 889) Male (Base: 850)
% of consumers
34
Market drivers
35
Obesity Trends Among U.S. Adults
36
The Red Meat Market TodayThank You!
37
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