The New U.S. Beef Consumer
Certainly by now most beef producers are very much aware of the increase in beef demand last year. The proposed reasons for this increase are many and varied. However, we may be able to sum up the increase in beef demand by saying U.S. consumers have changed significantly in the past decade, and beef is playing an increasingly important role in their meal selections.
How has the consumer changed?
- Most economists agree that the largest contributor to this increase in beef demand is no doubt the increase in consumers' income and their newfound willingness to spend a larger percentage of it. According to Randy Bloch of Cattle-Fax, consumer spending on beef from January through September 1999 totaled $36.7 billion-a $1.5 billion (or 4 percent) increase from one year ago. Consumer beef spending for the entire year is projected to reach $48.56 billion, which is nearly $2 billion above the 1998 level.
- The new heat-and-eat beef products have made a dramatic impact on the sales of beef in several marketing outlets. These products include brisket, pot roast, hamburger patties, meatballs, and several shredded beef products. Look for a large number of new heat-and-serve beef entrees to hit the markets this year, like stew, Swiss steak, and prime rib roasts. The biggest hit with the consumers is these products can be prepared in the microwave in about 10 minutes. Hectic schedules, two-job families, one-parent families, and children involved in untold numbers of activities have all led to the "quick fix, throw it in the microwave" phenomenon. The success of this segment of the industry could continue to breathe new life into the beef industry. Innovation will be the key. It is particularly worth noting that a large majority of these products use the undervalued chuck and round.
- With the frenzied pace most of us are keeping these days-juggling long work days, family, and free time-it's no surprise we're opting to eat out more and more. When we do eat out, we're also more apt to search for a little taste of home. The National Restaurant Association (NRA) says restaurant patrons will continue to look for more hospitality and "home style" foods when eating out. The resurgence in the popularity of diners, where down-home, simple food is a staple, substantiates this trend. Beef certainly falls into this "home style" description.
- Dining at steakhouses has increased 73 percent in the last five years. According to the National Cattlemen's Beef Association (NCBA), restaurants sold 7.1 billion servings of beef in 1998, a 13 percent increase since 1990. In 1998, there were 6,454 casual steakhouses, a 10.7 percent increase over that in 1997, according to Consumer Reports on Eating Share Trends (CREST) and the NCBA. By 2010, consumers will be spending 53 percent of their food dollar outside the home, up from 44 percent today, according to new research by the NRA.
- There is no doubt that foods high on the nutrition scale and low in prep time are favorites with consumers, but taste is one thing they won't skimp on when deciding which items to pick off the shelves. Nine out of ten shoppers rate taste as a very important factor when deciding which foods to buy-followed by nutrition, price, and ease of preparation, according to Grocery Manufacturers of America (GMA) and Peter Hart research.
- The popularity of outdoor grilling is at an all time high. Americans are now barbecuing an average of 2.9 billion times a year, and eight out of ten families own a grill, according to the Barbecue Industry Association. Steaks, burgers and hot dogs continue to dominate barbecue fare. We're also installing indoor grills in record numbers-sales reached $63 million in 1997, quadrupling since 1994.
- Sales of meat snacks like beef jerky grew 17.2 percent last year, according to the GMA. This portable snack plays into two dominant food trends: grab-and-go foods and the popularity of high protein, low carbohydrate diets. Flavors like hickory smoked, hot and spicy, and teriyaki jerky are being plugged as a low-fat, quick, and hearty alternative to more traditional snack fare. Grab-and-go convenience foods are here to stay-look for them to permeate every category of the supermarket and every channel, as consumers search for ways to make their lives easier.
Obviously, strides have been made and the future looks bright for the beef industry. However, it is each producer's responsibility to do his part to produce cattle that ultimately result in a satisfying meal for the consumer. For the first time in twenty years, we may be increasing the demand for beef. However, if we as producers become complacent and do not continue to make informed management decisions in conjunction with building on our newfound successes, there is no guarantee that this upswing in demand will continue.