Meat department dilemma
Feb. 6, 2017
by Joel Crews
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Research reveals decisions behind consumer purchases of meat products.
KANSAS CITY, Mo. – Divining evolving factors influencing today’s retail shopping purchases in the meat department was the focus of a Jan. 26 webinar hosted by Nielsen. According to Meagan Nelson, associate director of fresh growth & strategy with Nielsen, the demographics of consumers play a significant role in the purchasing decisions in the meat department as the options and perceptions of protein as a food source become more diverse and buyers demand more information about their groceries.
The webinar, “Decisions, Decisions: How Do Consumers Shop Meat,” covered many of the trends influencing retail meat purchases, including research indicating a decline in shopping trips and decreases in money spent on those trips and specifically, on meat and poultry products. What, where and how people are buying is changing and retailers are challenged to meet their needs and develop programs to compete with alternatives to traditional supermarket shopping.
The ebb and flow of pricing among items in the meat department aren’t necessarily resulting in corresponding purchasing patterns in the current market, according to Nelson. The recent decrease in many retail items isn’t causing a windfall.
“Prices are declining, but we’re not seeing volumes increase at the same rate,” she says. “And the roller coaster ride isn’t over just yet,” she added as consumers’ purchasing habits are somewhat in flux during a time when the political climate and the future of trade and immigration policies are still being debated.
Forecasting the trends in terms of retail channels, Nielsen research indicates that the compound annual growth rate from 2015 to 2020 of where consumers are buying food are transitioning away from traditional supermarkets (1.9 percent growth) in favor of convenience stores (3.8 percent growth) and e-commerce (12.2 percent growth). Meanwhile, growth at dollar stores, at 3.2 percent, and club stores, at 3.7 percent provide further evidence of shoppers’ utilizing alternative channels to traditional outlets.
Not surprisingly, how shopping habits are evolving, in-store shopping is competing with alternatives too, as point-and clicking becomes more prevalent and more retailers offer delivery and pick-up options. Shopping trips per household are on the decline when comparing older shoppers’ 160 trips per year to millennials, at 101 per year and Generation X consumers, at 127.
Product claims are a significant factor too, according to Nielsen, as 8.4 percent of the dollars spent in the meat department last year carried a product claim.
In terms of dollars spent at retail, “Nearly all (products with) production claims are growing by double digits,” Nelson said, adding that antibiotic-free and free-range claims were the most misunderstood by consumers.
Analyzing the trends in what people are buying, Nielsen research shows purchases made in the perimeter of the store, including the meat department, increased $12.4 billion between 2013 and 2015 vs. absolute dollar growth of just $8.7 billion in the center of the store.
The definition of what constitutes health and wellness has also changed as 20th Century perceptions focusing on low-fat, low-calorie, reduced sugar and salt and products featuring bran and whole grain attributes have given way to 21st century demand for products formulated to be gluten free, organic, natural, free of artificial ingredients, high protein and feature production claims. Multicultural flavors have also become the rage, as Nielsen research states one-third of American consumers eat food containing multicultural flavors at least weekly.
Consumers are fragmented and depending on their location category, which include urban, suburban and rural, their access to food is dictated by those locations. Within the urban category, club stores and grocery stores are increasing in popularity in cosmopolitan centers at the expense of mass retailers and supercenters. Consumers in the struggling urban core are also frequenting mass retailers less, in favor of grocery stores and dollar stores.
Consumers in cosmopolitan centers are an area of concern, according to Nelson, because they are spending less on meat than in years past. Demographically, these consumers’ are characterized as independent singles or young transitionals; Asian or Hispanic ethnicity; vegetarianism is common; and they tend to utilize foodservice for snacking occasions with a penchant for home delivery.
“They care about ‘free-from’ foods,” said Nelson, which includes antibiotics, hormones, artificial ingredients and genetically modified products. They are also characterized by their TV viewing habits, said Nelson, and watching awards shows, baseball games, the debates leading up to the November presidential election and Spanish programming. Their spending on meat products per year dipped to $352 per year on average, a decline of 5 percent from the previous year.
The uptick in meal kits has become a trend that both retail food outlets and foodservice operators are focused on as the growth has become a prominent part of Nielsen’s tracking. Siting a Harris poll taken this past December, 25 percent of shoppers purchased a meal kit in the past year. These purchases, according to Nielsen, came at the expense of fast-food (66 percent of the time replaced with meal kits) and meals made at home (59 percent of the time being replaced with meal kits). When it comes to the meat used in meal kits Nelson said the current format is largely being accepted as 91 percent of consumers responding to a December, 2016 survey indicated they were satisfied with how fresh meat is packaged in meal kits and 89 percent were satisfied with non-organic meat in those meal kits.
A more in-depth look at the growing impact of meal kits is the subject research expected to be released in the near future, said Nelson, as the segment continues to grow in early 2016.