The multi-year rise in bacon looks to be softening relative to the last five years, and much of that decline can be traced to the outbreak of African swine fever in China. The outbreak is driving a lot of pricing action in the recent quarter affecting pork prices in particular, says David Thompson, principal at IRI, Chicago.

“We saw last year there were some pricing actions, but the volumes were staying flat and the velocities were staying stable,” he says. “I’m seeing some softest in the velocity in the recent weeks.”

While bacon’s landscape is changing in the near term, bacon is still up 3.8 percent in volume and 1.4 percent in dollars for the year ending June 16 in total U.S. multi-outlets, IRI reports. Comparing the full year to this time last year, bacon also is still outpacing the refrigerated meats category, Thompson says. But in the most recent quarter, the bacon category has started to soften with the dramatic acceleration in pricing. For example, for the 13 weeks ending June 16, the price per volume per pound is up 3 percent from last year, IRI reports. In the month ending June 16, the price per volume per pound is up 8.6 percent.

“There’s been a big jump from a pricing perspective, and it’s having a negative impact on the velocity,” Thompson says. “The velocity in the most recent month is actually down 8.5 percent. Bacon still has very high penetration and the trips are up from last year. Consumers still are very interested in bacon, but now it’s facing some pricing challenges that are likely going to stick for the short term.”

Bacon continues to be a growth engine even in the current market where health is a driving factor, says Meagan Nelson, associate director at The Nielsen Co., in Chicago.

Product Dollar Sales % Change vs YA Volume Sales % Change vs YA Price per Unit
Hormel $126,005,941 3.8% 6,217,136 12.2% $6.92
Oscar Mayer $116,269,184 -2.1% 4,620,176 2.7% $4.52
Private Label $79,584,060 17.5% 3,486,583 19.5% $3.14
Boar’s Head $16,949,205 11.6% 454,708 9.5% $5.33
Smithfield $12,776,410 13.0% 540,649 14.1% $3.18
al fresco $5,069,212 17.6% 232,800 16.1% $4.08
Farmland $4,160,207 -3.1% 154,956 -0.4% $3.53
Jimmy Dean $3,781,084 157.9% 151,820 194.4% $3.32
Sugardale $2,727,670 -11.8% 112,569 -11.5% $5.91
Butterball $2,307,960 -11.9% 144,998 -11.0% $2.98
Total Category $372,370,983 4.7% 16,241,994 9.9% $4.55

Source: IRI, a Chicago-based market research fi rm (@iriworldwide). Retail sales data for the latest 52 week period ending June 16, 2019, Total US Multi-Outlet (Grocery, Drug, Mass Market, Military and Select Club & Dollar Retailers).

Nielsen tracks bacon is up 3.7 percent in dollars and 4.6 percent in units for the 52 weeks ending July 6. With African swine fever in China, however, Nielsen also sees moderation in the latest four weeks ending July 6 as prices have taken a sharp turn up. In the latest four weeks, dollars are up 9.8 percent as units flatten out to only 0.3 percent as average unit prices increased 9.5 percent from this time last year, Nielsen reports.

Bacon is a highly promoted product, so IRI’s Thompson expects the price increases will be mitigated by increased promotion in the category.

“In general, almost all of the bacon processors are very tentative right now on pricing,” says Chris DuBois, IRI’s senior vice president. “They know they have a great product. They know they’ve got something that people love, so pricing isn’t something that is taken easily. What we are overseeing are incremental moves as a way of trying to cover cost, recover risk and in this kind of competitive market, I wouldn’t expect to see crazy, huge price increases. I would expect to see incremental wait and see. So every three to six months you can begin to see small actions over time.”

While the 16-ounce bacon package is the sweet spot in the category, DuBois also expects that manufacturers will look to promote smaller pack sizes, such as 12-ounce, as a way for consumers to spend the same dollar amount, but receive a little less product.


Bacon convenience

An area in bacon that is gaining traction is pre-cooked bacon, which is posting higher growth rates than uncooked bacon, IRI’s Thompson says. Cooked bacon is about a $372 million market, but it’s growing three times faster than the rate of uncooked bacon, he says.

“Part of that is the convenience factor, and it’s got a little bit better price per volume,” Thompson explains. “You not only get a product that takes less preparation, it’s a little bit cheaper. Manufacturers are finding ways to get over this sort of resistance to the product process, because the closer you can get to the taste and the other aesthetic features of uncooked bacon with the convenience of having it precooked, then you’re really solving a consumer problem.”

In line with this convenience trend, Smithfield Foods, Smithfield, Va., has recently been promoting its full line of Smithfield Fully Cooked Bacon to meet consumers’ growing need for quick meal solutions as well as quick-prep tips for its Smithfield Uncooked Bacon.

“We see convenience continuing to be integral for consumers as their lives are busier than ever and eating more meals on the go,” says Eric Gibson, Smithfield’s senior brand manager. “We’re also seeing expansion within the snacking sector, as snacks are increasingly considered meals in their own right — especially those high in protein. As bacon is such a versatile product, we see even more mealtime opportunities for our consumers to enjoy.”

Convenience offerings also continue to be a key growth opportunity for Hormel Foods Corp. in Austin, Minn. “Our Black Label Microwave Ready Bacon has grown at a double-digit rate as consumers look for faster and less messy ways to prepare bacon,” says John Hernandez, Hormel’s breakfast meats brand manager.

Hormel also now offers its Black Label 24-ounce Thick Cut Stack Pack Bacon varieties (Original, Cherrywood, Pecanwood and Brown Sugar) with a new zipper for resealability and added convenience, Hernandez says.

Convenience in bacon packaging, such as resealability, also is going to become something consumers expect moving forward, IRI’s Thompson says. For example, bacons featuring individually wrapped serving sizes within a master package could take hold in the future as even a 12-ounce bag in a one- or two-person household might need to be spread out over more than one meal, he says.

“The easier manufactures can make it for consumers to go from package to pan to plate that is going to help drive sales,” IRI’s DuBois says. “Whether it’s resealability or whether it’s different sizes within a size, in general, people really hate touching meat, and they don’t really want to spend a lot of time cooking. Anything to take the time or the inconvenience out of it is a big deal. I would expect to see more research of those points.”

As manufacturers make bacon as more convenient product, DuBois also expects people will eat more bacon during the week. “Those kinds of innovations will make a big difference,” he says. “As manufacturers try to make it simpler, easier, more convenient and then drive more occasions throughout the week, that’s really part of the key to growth.”


Restaurants grow bacon options

Bacon Topped Donut

This year, bacon is found on 71 percent of all restaurant menus, which is a 5 percent increase since 2009, reports Datassential, in Chicago. It is not surprising that restaurants want to have bacon on their menus because 80 percent of customers say they love or like bacon, says Kelley Fechner, Datassential’s director customer solutions.

Bacon growth on menus is happening with all types of menus. Bacon is up 3 percent on all menus during the past four years, up 2 percent on breakfast menus, up 4 percent on lunch menus, up 2 percent on dinner menus and up 5 percent on all-day menus, Datassential reports.

While bacon is mainly used on sandwiches, salads and burgers, Datassential reports seeing growth with bacon on loaded tots, breakfast burgers and chicken and waffles along with Bloody Marys and other specialty cocktails.

While Datassential expects to see bacon continue to have a strong showing on menus, Fechner cautions that African swine fever (ASF) is the biggest unknown for now.

“If prices go up due to loss of the number of pigs available, this could impact menu penetration the most,” she explains. “If we don’t see an impact from ASF, then we should continue to expect bacon on menus.”


Bacon trends

Between 2017 and 2018, new product introductions increased 7.5 percent in the deli meat and meat products categories, as reported by Innova Market Insights’ Innova Database, in Arnhem, The Netherlands. For the period from 2016 to 2018, the compound annual growth rate of bacon launches in these two categories increased by 7.8 percent, Innova reports.

As far as new product trends, wood-based flavor innovation is occurring. “Hickory-smoked bacon has been around forever, but bacon sellers are beginning to use different types of wood to flavor bacon,” explains Tom Vierhile, vice president of strategic insights, North America, for Innova Market Insights, Fairport, N.Y.

Cherry wood also is picking up and unique woods such as pecan wood are appearing. “The use of specialty woods to flavor bacon adds to the novelty factor and can also increase the odds that the product will be perceived to be more of a specialty food item,” Vierhile says.

Innova also is tracking more cases where bacon is added to other meats to boost the “craveability” factor, Vierhile says. For example, companies are adding bacon to sausage and to hamburger to create a “better burger.”

The clean-label trend also is pervasive across a wide variety of food and beverage categories, and new bacons are no exception. New bacons are debuting without preservatives and also targeting the paleo trend.

“Paleo has been gaining traction on the new-product front these days,” Vierhile says. “According to Innova Market Insights, the number of food and beverage launches making a paleo claim grew by 33 percent globally between 2017 and 2018.”

Bacon manufacturers also are opening the door to more “spirited” flavor innovation through flavors that use types of hard liquor, Vierhile says. Innova also sees more innovation in sweet flavors, such as brown sugar and maple.

Product Dollar Sales % Change vs YA Volume Sales % Change vs YA Price per Unit
Private Label $1,084,800,163 5.1% 253,476,984 9.0% $4.72
Oscar Mayer $822,396,990 4.0% 147,957,391 5.8% $5.44
Hormel $458,165,549 2.6% 78,607,433 1.6% $5.74
Wright $416,721,316 6.0% 81,552,193 11.0% $10.23
Smithfield $365,458,750 0.0% 76,121,252 2.4% $4.86
Farmland $163,677,230 -5.6% 35,148,374 -1.8% $4.86
Bar-S $84,105,364 7.1% 18,432,693 14.3% $3.51
Farmer John $75,906,591 3.5% 14,315,495 6.5% $4.80
Jimmy Dean $73,836,447 35.3% 16,873,525 44.8% $3.66
Gwaltney $61,737,940 -11.2% 13,462,955 -7.7% $3.95
Total Category $4,372,425,561 1.4% 903,408,318 3.8% $5.04

Source: IRI, a Chicago-based market research firm (@iriworldwide). Retail sales data for the latest 52 week period ending June 16, 2019, Total US Multi-Outlet (Grocery, Drug, Mass Market, Military and Select Club & Dollar Retailers).

Recently, Matt Riezman, Oscar Mayer’s associate director of marketing, has seen a growing interest in cooking bacon outside of the breakfast mealtime, so the Chicago-based Kraft Heinz Co. brand has launched new products to help inspire further usage, whether it’s within salads, sandwiches, brunch or beyond. Consumers also have recently gravitated toward bolder flavors in their meats, including bacon. “It’s a trend that shows no sign of stopping any time soon,” Riezman says.

In tune with these trends, Oscar Mayer’s new product launches have included Oscar Mayer Maple Bourbon Bacon, made with real Evan Williams bourbon, and Oscar Mayer Cracked Black Pepper Bacon, available both as raw and ready-to-eat bacon for a more convenient, flavored bacon, Riezman says. Oscar Mayer also offers a low-sodium option and Oscar Mayer Natural Bacon.

Thick-cut bacon also is still trending higher than regular-cut bacon, IRI’s Thompson says. Apple wood is largely the leading smoke flavor followed by cherry wood for bacon, but cherry wood is under performing average dollar sales and apple wood is growing about three times higher than the category on average, he says. Hickory flavors are on a downturn.

Pork is still king of bacon too, accounting for 84 percent, with the cooked bacon of which most is also pork as well at 9 percent of sales, Nielsen says. Turkey bacon is actually one of the only declining areas of bacon during the last 52 weeks ending July 6, down 2.3 percent in dollars and down 5.3 percent in units, Nielsen reports.

Additionally, Nielsen does see significant growth in slab bacon and meat alternatives as well.

“While bacon meat alternatives are currently only a $5.8 million business in the past year, the buzz on alternatives continues to grow across the board,” Nielsen’s Nelson says.

Bacon seems to be defying, to some degree, challenges from plant-based meat alternatives though.

“It could be a situation where meat alternative makers just have not hit on the right formula to create a plant alternative that tastes close enough to the real thing,” Innova’s Vierhile says.

As far as poultry bacons, chicken bacon remains at less than $100,000 in tracked sales, IRI’s Thompson says. Turkey bacon on the other hand is about a $22 million market in a $4 billion category. IRI tracks that turkey is growing a little bit higher than the category on average during the last year, Thompson says.

The increase in pork bacon prices also has provided opportunity for other types of bacon proteins to increase prices, Thompson says. While not to the same degree as pork, turkey bacon pricing is up more than 2.5 percent, he says.

With the proliferation of exotic protein types, such as ostrich turkey, hitting the market in other food categories, IRI’s DuBois says more exotic varieties of bacon entering the market is one thing to watch for.


Greater variety

As far as claims go, Nielsen does report growth in production and health claims. For example, hormone-free claims are up 9.5 percent on pork bacon now appearing on 17 percent of bacon for the year ending July 6. “Legally all pork bacon is hormone free,” Nelson says. “This is showcasing a rise in labeling of hormone free.”

Additionally, free from nitrite is up 7.3 percent now accounting for 12 percent of bacon labels with free from nitrate claims appearing on 65 percent of bacon, Nelson reports. Natural claims are up 6.7 percent appearing on 5.3 percent of bacons with organic up 14 percent and appearing on 0.4 percent of bacons. Preservative free claims also are up 11.1 percent and are featured on 5.1 percent of bacons with antibiotic free claims also up 11.4 percent and appearing on 3.5 percent of bacons.

Variety of Bacon Packages

Trends in how the consumer defines health are affecting how they approach the bacon category, says Kyle Lock, Garner, N.C.-based Butterball’s senior director of retail marketing. For example, consumers are demanding cleaner turkey bacon products, full of flavor to fit their healthy lifestyles.

“Consumers have concerns about traditional dimensions of health like sodium and calories,” Lock explains. “Additionally, now they’re looking for other health dimensions like additives like MSG or fillers. Their brand choices are also influenced by how well the animals were cared for. This is why we’ve made adjustments to our turkey bacon products over the last of couple years. Every Butterball product is American Humane Certified, for example, the most prominent third party program ensuring best-in-class care for animals. It’s why we removed all fillers from our turkey bacon and why we don’t use ingredients like ‘mechanically separated turkey.’”

“Diet trends like paleo and keto are certainly supporting the sale of bacon as consumers look for high-fat, high-protein meat that is also clean and free of artificial ingredients,” says Mel Coleman, Jr., vice president of Perdue Premium Meats, Salisbury, Md., and fourth generation of the founding Coleman family. “That was one of the reasons we developed our Applewood Smoked No Sugar product.”

Additionally, bacons with no added nitrates, no added nitrites, no MSG and no preservatives aren’t enough for consumers anymore, he adds. “It’s about more than just the product they put on their plate as customers are looking for brands that source from farms that raise their animals humanely,” Coleman says. “We’ve always been all natural, and we are proud that we’ve been providing premium meats, raised the way nature intended since 1875. We really haven’t changed a lot. People are just now noticing and requesting the quality we’ve always offered. All of our animals are raised in a crate-free environment and never administered antibiotics or growth promotants ever.”

Retailers also are in tune with consumers and providing them with a variety of flavors and cuts along with convenience and health options to remain relevant with changing needs. “Bacon is extremely versatile and compatible with diet trends such as keto and is paleo-friendly, which has helped with its popularity in recent years,” Hormel’s Hernandez says.

“The trends in the bacon retail industry center around giving consumers more options to enjoy bacon and cater their selection to specific dishes or diets,” he adds. “Thicker cuts, unique smokes and flavors, and different packaging sizes allow consumers to purchase the bacon that meets their exact needs.”

Product Dollar Sales % Change vs YA Volume Sales % Change vs YA Price per Unit
Uncooked Bacon $4,372,425,561 1.4% 903,408,318 3.8% $5.04
Cooked Bacon $372,370,983 4.7% 16,241,994 9.9% $4.55

Source: IRI, a Chicago-based market research firm (@iriworldwide). Retail sales data for the latest 52 week period ending June 16, 2019, Total US Multi-Outlet (Grocery, Drug, Mass Market, Military and Select Club & Dollar Retailers).

The bacon category continues to grow year-over-year as consumers keep finding more ways to use bacon outside of breakfast as well. “Whether it’s being used as an ingredient in a favorite dish, in an appetizer or to elevate a main course, the multiple varieties and flavors available to consumers today, from Black Label Original to Black Label Applewood Smoked or Natural Choice Cherrywood Smoked bacon, create more reasons to want to use and enjoy bacon,” he says.

Social media also has provided bacon lovers to engage and inspire other consumers to enjoy bacon in new ways. “The surge and growing popularity of experiential events such as Bacon and Beer Classic has created an engaging and exciting platform to rekindle consumers’ love for bacon,” Hernandez says.

Smithfield agrees that consumers continue to look for greater variety and offers more than 20 varieties across its family of brands from fully cooked to thick cut to antibiotic-free bacon in a variety of flavors. “Some of our best sellers include Smithfield Cherrywood Smoked Bacon and Applewood Smoked Bacon, along with our classic Hometown Original,” Gibson says.

Last year, Smithfield introduced a 22-ounce Hometown Original and Applewood family-pack products. “We also did a package refresh, so consumers could easily see that all our bacon options are gluten free, with no MSG or artificial colors or flavors and contains no added hormones,” Gibson says. 

Bacon as a component in meal kits and other preparations is expected to expand in the future because it’s so versatile and adds so much flavor to a variety of dishes, IRI’s Thompson says.

“Anything from salad kits to soup mix to pre-made appetizers, it cuts across the full spectrum of meal occasions,” he explains. “It’s an easy, high-awareness addition to any kind of recipe, and I would expect to see some of that expanding as food manufactures look for different ways to bundle things together to facilitate end dishes for consumers.”

Still one of the biggest factors facing bacon is how the production challenges in China will affect pricing and supplies around the globe.

“Bacon can typically weather strong price increases better than a lot of other meat products, but there is a limit as we see unit growth drop noticeably from latest 52 to latest four weeks,” Nielsen’s Nelson says. “Beyond pricing, bacon has always and will always continue to win on two key principles: flavor and versatility. A little bit of bacon adds such great flavor to the dish. I think that is why it can moderate the price increases so well. It is just frankly delicious, and a little bit can go a long way in a dish even when the price goes up.” NP