WWFE Report/CHICAGO — Although there has been a measurable change in consumer attitudes and behavior as a result of the economic downturn and consumers have definitely tightened their belts, consumer trends in a recent study show things are heading in the right direction, according to Merrill Shugoll, president of Shugoll Research, and Michael Uetz, a principal of Midan Marketing. Both speakers presented "An In-Depth Look at Meat Through the Shopper’s Eyes" on Oct. 29 at Chicago’s McCormick Place during the Worldwide Food Expo 2009.

Ms. Shugoll and Mr. Uetz presented their findings from a two-phase study conducted in 2009. The purpose of the study was to understand consumer attitudes and behavior relative to the purchase and consumption of meat and poultry and to determine if consumer research results could be corroborated with sales data.

"While consumers are looking for bargains, few are buying less meat and poultry," Ms. Shugoll said. "And although consumers are shopping for fewer convenience items, eating out less and using more coupons, these behaviors have tapered off slightly [during the study period]."

She pointed out the study reveals the destination for meat and poultry purchases has also changed, with consumers moving back to conventional stores. Mass merchandisers have also gained ground. Consumers still prefer conventional supermarkets, but mass merchants and membership clubs are often a second stop for many shoppers. And conventional grocery stores and mass merchandisers have been the biggest winners in the battle for customers, with membership stores losing out.

"A majority of consumers said they have either increased their meat and poultry purchases or have kept them the same," Ms. Shugoll said.

Total fresh meat and poultry pounds remain strong. In fact, total fresh meat and poultry pounds (in millions) were 2,435 in the third quarter of 2008 vs. 2,728 in the third quarter of 2009. Chicken has been the biggest winner in the battle for consumer dollars. And its total pound volume has significantly increased from 802 million lbs. in third quarter 2008 compared to 890 million lbs. in the third quarter 2009.

Beef’s pound volume is also experiencing significant growth in 2009. In millions of lbs., it increased from 1,024 in the third quarter 2008 to 1,114 in the third quarter of 2009. Pork’s pound volume is also growing from 504 million lbs. in the third quarter 2008 to 579 million lbs. in the third quarter of 2009.

"Consumers who have changed their frequency of eating chicken are preparing lots of chicken, but preparation of boneless, skinless chicken breasts has increased the most," Ms. Shugoll said. "Regular ground beef is the big winner, although other beef cuts including premium cuts are beginning to recover."

Premium steaks are experiencing more growth than regular steaks, Mr. Uetz said. Although consumers are eating less at restaurants today, they want restaurant-quality steaks when they eat steak at home. Retailers have been focusing on the great value of premium steaks, he added.

Regular ground beef has experienced strong increases throughout 2008 and in to 2009, he added, with consumers buying 447 million lbs. of regular ground beef in the third quarter of 2009 (a 11.5% increase over the same year-ago period) compared to 93 millions lbs. of premium ground beef in the same quarter, which marks an 11.3% increase over the same period one year earlier.

Consumers who have changed their frequency of eating pork are preparing all pork cuts less frequently, but bone-in pork roasts and boneless pork chops are gaining ground, Ms. Shugoll said.

In conclusion, Ms. Shugoll iterated consumer attitudes and behaviors have changed as a result of the economic downturn. Two-thirds have "tightened their belts" and they are looking for bargains, coupons and are eating out less — but this behavior is stabilizing.

Total meat and poultry pound volume continues to grow, confirming consumers’ positive attitude toward meat and poultry, Mr. Uetz said. Even when the recession was at its worst, fresh meat and poultry sales continued to increase and current data shows an even more positive trend.

As the recession lingers, consumers become more price-sensitive, he added. The normal product mix will change based on retail package prices. Expensive meat cuts will incur higher shrink losses. A close evaluation of how retail prices for expensive meat cuts are determined should be conducted.

"Consider a cents-per-pound pricing method versus the normal percentage markup method, Mr. Uetz urged the audience.

In normal economic times, ground beef is considered to be a consumer staple. The ground category as a whole has a great low price "budget" appeal. Merchandising ground products with idea-generating recipes is a great way to appeal to budget-stretching consumers, the presenters said. "Make sure your ground displays are stocked with a full variety and include all package sizes," Mr. Uetz said.

"We’re hoping we’re in the early stages of recovery [from the recession], but it’s not yet ‘back to business as normal,’" Mr. Uetz said.