During the coronavirus (COVID-19) pandemic, massive shifts showed up throughout the meat and poultry industry. One of the significant areas with drastic transformation was the supermarket retail landscape across the United States.
After stay-at-home orders were announced in the spring, consumers rushed to local grocery stores to stock up on supplies, including meat products.
Although there are fewer restrictions for people now, it will still be a record year for retail consumption. To get a comprehensive look at this system, Anne-Marie Roerink, principal of San Antonio-based 210 Analytics, provided an overview of the 2020 trends.
Speaking about the pandemic surges in retail, Roerink said, “I don’t think any one of us has ever seen that. The only time you see extreme sales spikes like this is leading up to blizzards and hurricanes, but typically people do not stock up on fresh meat, but center-store items instead. Additionally, those spikes are very regional. The pandemic caused never before seen spikes across the country and across all departments and temperature zones.”
Roerink, 210 Analytics and IRI reported that overall, meat dollar sales between March 15 and Oct. 4 are up 28.3% and volume sales have increased by 16.9% versus 2019.
More data indicated an additional $9.6 billion in meat department sales during the pandemic, which includes an additional $4.5 billion for beef, $1.3 billion for chicken and $957 million for pork, compared to last year.
“The big winner in the pandemic has been beef that gained share in both volume and dollars,” Roerink said. “In part, this is due to a very strong performance by ground beef, or really all grinds, including turkey, lamb and pork. Pork, too, has gained share in dollars and volume. The one protein that has lost some share, though has still seen tremendous sales gains, is chicken. Chicken’s share of the total fresh meat dollar is down in dollars and pounds.”
Roerink showed meat sales continuing to track 15% to 20% ahead of last year. Consumers did search for their favorite meats at retailers, but they also looked at niche proteins of lamb, bison and seafood.
“It’s fair to say that during the big stock-up weeks and later during the weeks of tight supply, consumer choice was heavily influenced by out-of-stocks,” Roerink said. “That meant that many consumers bought what was available, not necessarily what was on their list. This boosted the sales of different kinds of cuts and kinds of protein, as well as new engagement with frozen meat and seafood. But assortment has largely recovered, and we continue to see elevated engagement with the smaller proteins.”
As quarantine continued in the spring and summer months, consumers started to recreate restaurant meals at home and more people experimented with cooking species and cuts they had previously ignored.
With the influx of people relying on retail meat, 210 Analytics and IRI saw companies continue to adapt to customers’ needs. Additionally, with online purchases increasing, outlets realized what people wanted, and didn’t want, in their product mix.
“To keep supply going, the industry made decisions on tray types and colors, amounts, etc., and I imagine there will be decisions on whether some of the SKU (stock keeping units) rationalization and the removal of complexities in the supply chain are here to stay,” Roerink said. “More than anything, I think the meat industry did a tremendous job in communicating with other links in the supply chain to understand pain points and finding solutions together. Without a doubt that has strengthened supply chain cooperation for years to come.”
During the year, retail analysis continued to track consumer meat habits. For 210 Analytics, it’s been a mixed bag. They can follow the meat dollar more because purchases are all clustered at one time at retail locations. Yet, it is more challenging because people are not making multiple trips to the grocery stores like in past years.
“While normally there are some very interesting basket-level learnings to see what types of produce or center-store items land in the basket with fresh meat, this is harder now,” Roerink said. “People are buying for many more consumption occasions, especially breakfast and lunch, so trying to understand adjacencies is a bit harder.”
Looking ahead to the winter months, Roerink said retail sales might see another spike if the virus continues to spread in the United States.
“Given the grip the virus has on food spending, I’m expecting to see retail sales rise once more,” she said. “Not to the extents we saw in March and April, but certainly well ahead of 2019. Between increasing case counts in the majority of states, combined with many restaurants being limited with outdoor seating restrictions during winter up North, I imagine more of the food dollar will move back to retail.”
All these factors make it difficult to predict or plan for 2021 trends. Analysts are saddled with forecasting based on the recent past and come up with best estimates.
“Once we hit March, it will be impossible to top the 90% surge that we saw in 2020, so I think goals will shift from meeting/beating year-ago targets to looking at week-to-week or month-to-month,” Roerink said. “For holiday demand, looking at the 2020 pandemic-affected holiday patterns may help predict the winter holidays.”