Pandemic Pushed Sales of Pork, But Inflation Lurking

Americans have turned to meat in a big way since the pandemic hit and sales, including pork, still remain high. “Pork scored many wins since the onset of the pandemic,” says Anne-Marie Roerink, a principal with 210 Analytics, San Antonio. “Pork has generated big dollar and volume gains, and actually increased its share of the total fresh sales.”

From March 15, the onset of the pandemic, to June 28, pork sales increased no less than 40% over the same period last year, which translates into $736.2 million additional in pork sales in less than four months or 175.5 million more pounds than 2019, which is a 25% increase in volume, according to IRI data. Market dollar share increased from 12.9% during early March before the pandemic hit to 14.2% in the week of June 28. Volume market share increased from 16.5% to 18.8% in the same period.

Weekly Dollar Sales Gains vs. Comparable Week in 2019

Source: IRI, total U.S., multioutlet, one-week percent change vs. year ago

“These are astounding numbers,” Roerink says. “Yet, I believe there is a bigger win and that is consumer engagement. People discovered and rediscovered pork’s great taste, ease of preparation and bought a variety of cuts. Whether this was driven by choice or a sheer all that was available in the meat case necessity, the fact is that many more consumers bought pork items as well as a greater variety of cuts. That will be a big win for years to come.”

Pandemic Experimentation

Availability was a big issue during the pandemic, and it drove many consumers to try new brands that they may not have purchased before, notes Michael Uetz, principal of Midan Marketing, Chicago. “Nearly a third of consumers have purchased a different brand of meat than they normally do,” he says. “Consumers are also experimenting more with meat (beef and pork) and chicken as 60% of them are trying new recipes.”

Part of that experimentation involved increased interest in processed pork. “That’s another pandemic powerhouse,” Roerink says. “Some of these numbers are eye-popping, such as smoked ham/pork that increased dollars by 45.6% during the pandemic. Or bacon that was up 40.4%.”

Ground pork, a very versatile product, also saw increased popularity with sales up 43% since the onset of the pandemic, which accounts for $18 million in sales.

Share of Meat

Source: IRI, total U.S., multioutlet, percent of total meat department dollars | “All other” not reflected

Coleman Natural Foods saw a similar interest in processed pork products. “Although people were pretty much grabbing whatever they could find at the height of the outbreak, we’ve seen greater interest in sausage and processed items that come from naturally raised pigs, have clean ingredients and can be used for multiple meal occasions,” says Mel Coleman Jr., VP of Westminster, Colo.-based Coleman Natural Foods and a member of the fifth generation of the company’s founding family.

He adds that the perception that sausages and processed pork are bad for you has gone by the wayside: “Hot-dog sales … went through the roof well before the traditional ‘grilling season,’ which typically starts after Memorial Day.”

Hot Hot-Dog Sales

IRI data also supports the popularity of hot dogs throughout much of the pandemic. From March 8 to July 5, sales of hot dog only decreased from the previous year during the week of June 28, but for the 15 weeks in March, April, May and June, sales of hot dogs increased by double digits. Over the latest 52 weeks ending July 5, hot-dog sales are up 12.6% over the same period a year ago in dollars and 5.3% in volume.

Consumers have discovered that processed pork products can “help with quick meals, satisfying family tastes and keeping variety on the table now that as many as 21 meals a week are being prepared at home,” Coleman says. “Families are learning to ‘go beyond the bun,’ and incorporate hot dogs and sausages in creative ways for all meals of the day.”

Photograph courtesy of Coleman Natural Foods

The company offers a variety of recipes to help incorporate processed pork in unusual ways, such as adding hot dogs to stir-fry, salads or pizza; adding bacon to vegetables or as a garnish to pasta; and even using bacon in place of a tortilla in a wrap.

Uetz of Midan also stresses the importance of providing ideas on how consumers can be creative with pork. “Providing consumers with preparation and recipe information continues to be important for brands and retailers looking to keep shoppers coming back to the meat case,” he says.

Supply Side Challenges

While at the beginning of the pandemic empty meat cases may have pushed consumers to choose pork when beef and chicken were not available, the category has not been without its own supply challenges. Pork processing plants were some of the first meat facilities hit with COVID-19 outbreaks among workers, leading to plant shutdowns and supply chain issues that drove prices up. President Donald Trump invoked the Defense Production Act to keep meat processing plants up and running amid the outbreaks.

At certain points during the pandemic, pork production was down by one-third, Roerink of 210 Analytics notes, which had a ripple effect through retail. “Stores had much less variety in pork for weeks on end,” she says. “Certain weeks the number of pork SKUs were down by 10% with huge regional differences depending on which plants were up and running. Stores also simply had much less inventory.”

Meat purchases had been elevated since the beginning of the pandemic, which meant that frozen stores of meat also had been depleted.

This loss of inventory led to many stores implementing purchase limits. Giant Eagle limited purchases to two meat products in each transaction, Fresh Thyme and Albertsons allowed for only two of the same meat product to be purchased at one time, Costco curtailed customer purchases to three meat items, and H-E-B and Kroger also had limits depending on store location.

Midan research found 56% of consumers reported they were “very or extremely” likely to find pork in-stores in May, and that percentage had increased to 59% by June.

“The tightness in supply pushed prices up double digits versus last year, which started hurting volume sales for a bit,” Roerink says.

However, pork supplies are plentiful from the farm level, and processing plants are now working through a backlog in hogs, says Christine McCracken, executive director of food and agribusiness for Rabobank. The hog supplies remain at record levels, which could translate into relatively low pork prices for the next few months, she adds.

“There may not be the breadth of selection, however, as labor availability remains an issue for many processors,” McCracken says. “Expect more commodity products and fewer processed items, but supplies will gradually improve as plants adapt.”

Inflationary Price Increases

Like much of the rest of the store, inflation has played a part in pork sales as prices are up 6% across the store compared to last year. While supply is high, Roerink predicts that due to overall inflation, consumers may begin to cut back purchases. “All this inflation is coming right as many consumers have significant economic pressure with very high unemployment and uncertainty,” she says. “During the week that pork saw double-digit inflation, volume actually was down compared to last year. People adjust to inflation by buying a little less or by switching to cheaper proteins.”

McCracken predicts that many consumers will turn to value items, due to both supply chain issues and wanting to watch what they spend.

Recessionary spending may already be starting to take effect, Roerink says, citing the increase in sales of private labels and value packs, although the rise in value packs can also be attributed to people cooking more meals at home. “I do think we’re going to see at least some of the same behaviors that we see during recessionary times,” she says. “This includes looking for money-saving measures, whether buying items that are on sale or buying value packs. We’re seeing great strength in frozen meats, as well as processed meats that are often a bit cheaper on a price-per-pound basis. We’ll likely see smaller packages to bring down the price per pack and avoid sticker shock. But the good news is that the supply is flowing again and hopefully will continue to flow and allow retail prices to fall back in line.”