Source: Rita Jane Gabbett, MEATINGPLACE, 8/24/11

As meat prices rise, consumers are switching from beef to chicken, but pork consumers appear more protein loyal, according to a recent study by the Perishables Group.

The study set out to understand the consumer decision tree for fresh meat spanning beef, chicken and pork by cut, and combined insights from 2,500 web-based consumer surveys, shopper loyalty card data from 30 million households, protein- and cut-level price elasticity/cross-price analysis and five years of point-of-sale supermarket data from 13,000 stores.

Meat department purchases lead sales of all fresh departments, earning an average of $31,554 per store per week. Poultry and meat are purchased by 98.5 percent of households across the nation, according to the study.

Despite its consistent spot on consumers’ shopping lists, both the meat department’s household penetration and average meat basket transaction size declined in the 52 weeks ending June 25, 2011.  
Higher prices are likely part of the culprit, as retail meat prices increased 7.2 percent in the latest 52 weeks, resulting in a 2.8 decline in meat volume sales.

PG’s research found that:
• Nearly 60 percent of respondents plan their fresh meat purchases. However, a large majority of those shoppers would be willing to switch their planned purchase in store for another item that is on sale or priced lower.
• Price was among the most important purchase influencers for consumers, ranking above protein type and intended use.
• Even without an actual price change, the claim that an item is on sale has a positive impact on the consumer’s decision to purchase.
• PG’s price elasticity analysis found that the more heavily promoted, higher-priced cuts are most sensitive to switching behavior.
• Chicken, the least expensive of all proteins, was a substitute for other fresh meat across all cuts. Specifically, boneless/skinless chicken breasts have an average retail price of $2.78 per pound and are a substitute for a number of fresh beef cuts, such as ground beef or Ribeye steak.
• Nationally, all fresh beef cuts were more elastic than other proteins, meaning consumers are sensitive to price changes and adjust their purchases accordingly.
• Conversely, most pork cuts generally were inelastic, indicating that pork shoppers are loyal to the protein even when prices increase.
• Across all proteins, marinated/seasoned cuts were the most price elastic but often appeared in the consumer decision tree at levels higher even than protein.

“Considering the increased sales growth of value-added proteins, it’s clear this segment is answering the needs of time-strapped and/or inexperienced meat consumers,” PG concluded.

For more information or to purchase the Perishables Group’s full meat department consumer decision tree study, contact Kelli Beckel at 773-929-7013 or Kelli.Beckel@perishablesgroup.com.

For more stories, go to www.meatingplace.com.