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The Red Meat Market Today
What is driving or hindering
the red meat market?
May 8, 2014
Agenda
• Market Drivers
– Beef Sales and Forecast
– Price
– Health
– Consumer Preference
• Beef Consumption
• Millennial Generation
2
Market drivers
Obesity Trends Among U.S. Adults
3
Million Head
Beef Cow Inventory:
Is a Larger Herd on the Way?
Years
4
5
World Population Growth
Another 700 million people
in the next decade
Remember only 4 percent is in the U.S.
6
Market drivers – Cost of Food
7
In the News – Rising price of Food
8
Red Meat Sales and Forecast
Total U.S. sales and fan chart forecast of red meat, at current prices, 2008-18
Source:
Mintel/based on Information Resources, Inc. InfoScan Reviews; Bureau of Economic Analysis; FreshLook
Marketing Group
9
Beef sits atop the red meat category
Total U.S. retail sales of red meat, by segment, at
current prices, 2011 and 2013
40,000
35,000
34,864
36,951
$ million
30,000
25,000
20,000
14,225
15,000
14,712
10,000
5,000
1,375
1,465
0
Beef
Pork
2011
Other
2013 (est.)
Source: Mintel/Based on Information Resources, Inc., InfoScan Reviews; Bureau of
Economic Analysis; FreshLook Marketing Group
10
Total Meat Category
Pound Share % in Total US Over Time
11
How Much Are Consumers Willing to Pay?
12
Reasons Reportedly Consuming Less Beef
Among consumers (17%) who feel
they are eating 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
Source: Consumer Beef Index,
July 2013
13
Market Drivers - Health
1990
2000
2010
Obesity Trends* Among U.S. Adults
BRFSS, 1990, 2000, 2010
(*BMI 30, or about 30 lbs. overweight for 5’4” person)
No Data
<10%
10%–14%
15%–19%
20%–24%
25%–29%
≥30%
14
Industry Responding to Shifting Environment
“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”
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 crosshairs
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
U.S. Population
Classified Overweight
34%
U.S. Population
Classified Obese
34%
Sources:
(1) ISIPP Publishing
(2) Virginia Tech Cooperative Extension
(3) Center for Disease Control and Prevention, 2008
(4) UN Food and Agricultural Organization, 2004
16
More consumers cutting back on red meat
I’m trying to eat healthier and that
means eating less red meat
57
It’s too expensive to buy as often
as I’d like to
36
I’m watching my cholesterol and
that means less red meat
32
I’m dieting and that means eating
less red meat
19
I’m buying better quality red meat
this year, but less of it
16
0
10
20
30
40
50
60
% of consumers
All (Base: 729)
Source: Mintel
“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?”
17
Reasons Reportedly Consuming Less Beef
Among consumers (17%) who feel
they are eating 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
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.
Source: 2012 Food Marketing Institute Shopping for
Health Survey
• Aging consumers concerned
about muscle mass
expected to turn attention to
protein foods.
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.
19
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
1-2 person
households
38%
62%
3+ person
households
Source: U.S. Census Bureau
What this Means for Beef:
• Lots of merchandising options in the store are needed
21
State of the Consumer – Ethnic Changes
30%
From 2010 to 2050:
30%
• Hispanics are anticipated
to grow from 16% to 30% of
households
25%
• Asians from 5% to 9%
20%
• 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
16%
14%
15%
15%
9%
10%
?
5%
5%
2%
0%
What this Means for Red Meat:
• Beef must work to maintain
and broaden its appeal to all
ethnic groups
• Culinary tastes will shift
Source: Bureau of Labor Statistics 2010
2050
22
State of the Consumer – Busy Lifestyles
• 70% of women are working
• Average work night dinner expectations:
40 minutes from
start to table
Too long for 31% of
consumers
60 minutes from
start to table
Too long for 70% of
consumers
What this Means for Red Meat:
• Convenience one of the drivers of growth
• How do we make all red meat more convenient?
Sources:
(1) Bureau of Labor Statistics
(2) Convenience Framework, Dec. 2010
23
State of the Consumer – Lack of Planning
• 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
FMI, Shopping for Health 2011 Study
expectation is 20 minutes!
24
Red meat consumed by 90% of consumers
at least once a month
Beef (that is bought ground – Either fresh
or frozen)
83
Beef portions, steaks, fillets (that is
cooked at home from frozen or fresh)
11 7
74
Pork portions, fillets (bought fresh or
frozen)
18
67
19
51
Ham (other than deli meat)
Other red meat (e.g., buffalo, ostrich,
venison; fresh or frozen)
18
15
Lamb (fresh or frozen)
0%
20%
33
62
25
60
60%
14
16
20
40%
9
80%
100%
% of consumers
At least once a month
Source:
Mintel
Every 2-3 months or less frequently
Do not eat
“How often (if at all) do you personally eat each of the following items at home?
25
Please select one per type.”
Base: 2,000 internet users aged 18+
Consumption Frequency – Servings Per Week
July 2013
Past Week
Servings (mean)
Source: Consumer Beef Index,
July 2013
26
Hispanics are above average red meat
consumers
85
90
82
% of consumers
80
82
72
70
70
67
60
61
49
50
40
30
24
17
20
10
0
Ground beef
Beef
portions,
steaks,
fillets
Hispanic (Base: 298)
Source:
Mintel
Pork
portions,
fillets
Ham
Other red
meat
Not Hispanic (Base: 1,702)
“Do you personally eat each of the following at least once a month
at home?”
27
Millennials
• 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
the millennial
28
The Millennial Generation:
“Things aren’t perfect. I need you to be...”
29
SOURCE: Millennial Generation and Beef, Conversion, December 2011
Millennials may pay more for food
Source: Jefferies AlixPartners
30
Millennials: Beef’s Performance & Information Needs
What Millennials Think
What Millennials Want
Agree Completely/Somewhat

Millennials don’t
know how to cook
beef and have
disappointing
results with steaks
& burgers.
Key: Significantly lower than
non-segment ( )
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.
Consumer Beef Index – Feb. 2013
Millennials & Beef - 2011
31
Millennials: Beef’s Performance & Information Needs
Agree Completely/Somewhat


Key: Significantly lower than
non-segment ( )
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.
Consumer Beef Index – Feb. 2013
Millennial s & Beef - 2011
32
% beef and red meat
consumers
Prepared products appeal to youngest
consumers, men
35
30
25
20
15
10
5
0
32
Beef and red meat consumers
18
15
11
13
12
% of pork consumers
Age 18-24 (Base: Age 25-34 (Base: Age 35-44 (Base: Age 45-54 (Base: Age 55-64 (Base: Age 65+ (Base:
206)
297)
308)
331)
246)
285)
25
22
20
20
Pork consumers
14
15
10
4
5
7
9
0
Age 18-24 (Base: Age 25-34 (Base: Age 35-44 (Base: Age 45-54 (Base: Age 55-64 (Base: Age 65+ (Base:
108)
188)
219)
250)
200)
218)
Source: Mintel
“Do you tend to buy red meat products that have been partially
prepared for you?”
33
Improved packaging may appeal to
consumers
35
I would like to see more
resealable meat packages
30
I would like to see more
individual-sized portion packs of
red meat
26
22
23
I would like to see more onpackage recipe ideas
18
0
5
10
15
20
25
30
35
40
% of consumers
Female (Base: 889)
Source:
Mintel
Male (Base: 850)
“Please indicate which of the following statements, if any, about beef and
pork products you agree with. Please select all that apply.”
34
Market drivers
Obesity Trends Among U.S. Adults
35
36
Thank
You! Today
The Red
Meat Market
37