I would like to share some consumer trends impacting the U.S. pork industry.
Consumers make most of purchasing decisions based on these three areas. These three areas haven’t changed but what provides value within each area does change over time with each consumer.
These areas have varying levels of importance to each consumer. While I may be a price buyer when it comes to buying gasoline, the emotional reward is much more important when purchasing a vacation.
Price is often the first area many folks think about. It is more important to some than to others.
The average American spends $151 on food each week. The range is quite wide depending on how important convenience and emotional reward is to the consumer.
In 2014, Americans spent 5.5 percent of their disposable personal incomes on food at home and 4.3 percent on food away from home.
Amount of income spent on food has flattened overall since about 2000, however for the top half of income earners, it has likely continued to decrease.
Income levels for the top half of income earners has continued to rise. As incomes go up, expectations in other parts of the buying decision also increase.
Prices fell 10% since Sep 2014 and will likely continue the downward trend for the next several months. Typically as the retail price drops, we consume more. Of course as supply increases, retail price drops and more is consumed. Supply and demand principle still applies! The trend here is clearly lower prices for pork in the U.S.
Convenience also remains high in the value determination for consumers. There are two areas in which convenience is important in the meat sector. Transaction time and preparation time.
Average American spends nearly 1.2 hours eating each day, yet only .6 hours preparing their food.
Average American spends an average of .75 hours each day shopping for goods and services. We spend more time shopping than we do preparing our meals. That is a significant shift over previous generations.
The average American spends nearly 3 hours watching television each day. (2.78)
The grocery stores have expanded offerings in the self-serve meat department. They have added more checkout lanes and even self checkout lanes. Many now offer call ahead ordering and home delivery of groceries. There are companies that specialize in home delivered groceries. Personal shopper companies are now available to shop at your local grocery store for you.
We are seeing an increased demand for products that take less preparation time. This space continues to expand in retailers. For those with high value on time savings, this is of great value and has significant influence on the buying decision.
Emotional reward is a broad area and varies significantly from person to person. More so in this area, perception is reality.
There is a lot of action in this area of the pork industry.
Taste, texture, safety, ethics, experience, etc. are part of the emotional reward.
Shopping experience, eating experience, safety, ethics and yes, bacon are part of emotional reward.
Often times the reason we buy is because of the shopping experience. There is clearly a consumer trend toward old fashioned meat markets with knowledgeable staff and a variety of fresh product selected from the case. There is also a trend toward barbecue in the U.S. from BBQ stands to upscale BBQ restaurants. The shopping experience engages all 5 senses, taste, touch, smell, sound and sight.
There has been more consumer demand for great tasting pork. As consumers are more willing to pay for a better eating experience, there has been more focus from the entire pork industry. For many years, the industry was focused on efficiency and least cost of production. This led to more efficient genetics, least cost rations, heavier market weights, etc. One of the unintended consequences was drier, poorer tasting pork. The industry have focused more on the eating experience lately. Balance is key.
Safety has become more of a concern to the U.S. consumer. Consumers are more concerned than ever about the use of antibiotics, preservatives, additives and GMO’s. This has led to an increase in label claims and differentiation of pork products in the market place.
More consumers are concerned about the way animals are raised. They want animals to be raised with plenty of sun, space, and green pastures. This consumer trend has broadened the scope of the pork industry. Several brands and retailers have dedicated a significant amount of resources and energy to capitalize on the safety and ethics trend in the food industry.
I would be remiss if I didn’t talk about one of the hottest consumer trends in the U.S. That is the infatuation with bacon! Bacon is showing up everywhere. Clothes, deodorant, ice cream, toothpaste, baby formula, soda, liquor and bacon is wrapped around anything edible. There are bacon festivals popping up across the country, coast to coast! This truly is one of the hottest consumer trends in the U.S. We in the pork industry love it!
Consumers make most of purchasing decisions based on these three areas. These three areas won’t change but what provides value within each area will continue to change over time with each consumer.
Each person has different values driving their purchasing decisions. Out of these values trends evolve. Hopefully I have helped you understand some of the consumer trends impacting the U.S. pork industry.
