As social distancing measures sharpened further and the number of confirmed COVID-19 cases continued to rise, the final week of March showed ongoing stocking up in food and beverages while non-food stockpiling showed signs of easing. While packaged and frozen food are accounting for a greater share of grocery spending post COVID-19, the demand for meat and poultry remains highly elevated. According to IRI, meat has been the leading sales driver for the perimeter since the onset of coronavirus in the U.S.

During the week of March 29, total perimeter sales were up 12% versus 36% for total meat and poultry (fresh and processed), despite many stores running shorter opening hours. This is on top of the 80% surge the week ending March 15 and 92% the week of March 22. Volume sales have been trailing dollar sales throughout March and were up 28%. In many cases, retailers continued to limit the number of items per household, particularly on popular powerhouses, like ground beef and chicken breast. “I wish I could have bought more meat, but appreciate they are limiting items so everyone has a chance to buy,” noted a shopper on the Retail Feedback Group’s Constant Customer Feedback (CCF) program. “They kept restocking during the day, where other stores are close to empty for fresh produce and meat, given everyone a chance to get some.”

All meat and poultry continued to sell far above typical levels, with turkey continuing to have the highest percentage gains. Year-to-date, dollar gains for total meat are up 17% over the comparable period in 2019, according to IRI.

Smaller proteins and claims-based meat likely continued to benefit from stockouts in conventional beef and chicken. “Pederson's operates in a niche of the meat industry, catering to the better-for-you, never-ever, no-sugar consumer,” said Neil Dudley, Vice President with Pederson’s Natural Farms. “Orders from our retail partners have been over double our forecasted sales for March. Our in-house production team has afforded us the flexibility to pivot quickly and increase line time to meet the incredible demand. There have been no indicators of a return to pre-pandemic order routines.”

Sales Growth Drivers
Beef and chicken, the two largest proteins, saw the largest increases in terms of dollars, and turkey was once again the highest in percentage growth during the week of March 29. In absolute dollars, beef sold an additional $158 million versus the comparable week last year, with more than 55% of it generated by ground beef. Chicken generated $61 million more during this last week of March than in 2019.

The volume surges are affecting everyone in the meat supply chain, from producers to retailers. Many have implemented measures to streamline operations, from cutting back on the number of line extensions and specialty items, to streamlining trays and packaging. “We’re experiencing a substantial increase in demand for food trays as more consumers are preparing and eating meals at home,” said Jerry Kelly, with Sealed Air – Cryovac Brand Food Packaging. “The spike in sales of fresh meat at grocery stores is driving a greater need for case-ready food trays, and to meet the demand we currently focus on the most common tray colors and sizes in order to maximize production output.”

Ground
Ground continued to be big, regardless of species, given its versatile and easy-to-prepare nature.

• Ground beef increased 52%
• Ground turkey, +45%
• Ground chicken, +31%
• Ground pork, +29%

A Detailed Look by Area
Sales surged across all proteins and offerings, fresh and processed.  Fresh beef represented more than half of all fresh meat sales, yet grew 37%.

Source: IRI, Total US, MULO, weeks ending March 1, 8, 15, 22 and 29, 2020

Dollar Versus Volume Gains
With the exception of turkey, volume sales growth trailed dollars. Pork, in particular, saw a significant gap the week ending March 29, with dollars up 31% but volume up 16%.

Source: IRI, Total US, MULO, weeks ending March 29, 2020

Online Meat Sales
Online ordering has also experienced a surge in March, with growth in home delivery and click-and-collect. IRI’s early indicator for the week of March 15 was a 75% increase in dollar sales for online grocery baskets (food and nonfood). Dollar increases are driven by new buyers, a greater volume of orders by current buyers and larger online baskets. Shipt shopper Chris Trevino from San Antonio, TX noted “I’m seeing an increase in orders that include fresh meat, though it’s not always available, especially ground beef. People also opt for leaving orders by the door step to minimize contact.”  Packer/processors who are already active in eCommerce have experienced big surges as well. "From the Pederson’s perspective, eCommerce home delivery meat sales is experiencing exponential growth,” said Dudley. “We’ve seen an increase in demand from many of our e-commerce partners like The Simple Grocer, Imperfect Foods, ButcherBox and Amazon. The Simple Grocer reported that March dollar sales were up over 287% and order volume up 195%.”

Many retailers with eCommerce capability struggled with slot availability for click-and-collect. Some mirrored in-store measures and reserved a number of slots to provide exclusive access to risk groups and first responders. COVID-19 is likely to change the makeup of the online shopper. To date, demographics skewed toward Older Millennials and Gen X, urban areas and higher income shoppers. COVID-19 prompted a surge in orders among the older demographics as well. On the CCF system, new customers expressed their gratitude for online shopping, “This was the first time I did online ordering due to coronavirus fear. I’m over 65 and have breathing problems so I am unable to go out for my own things. Got my order in and it was ready to be picked up right on time. I was so impressed with the whole experience. Thanks for offering online pick up.”  At the same time, IRI found that while eCommerce was up, the panic buying surge in brick and mortar actually caused a decrease in market share for online sales, particularly in non-edibles that dropped from a high of 31.5% mid January to 25.4% the week of March 15.

Trip mission
Meat is often bought is larger quantities to freeze and use over time, but much more so now. IRI research finds that purchases support freezer stocking driven by panic purchasing, but also immediate, everyday needs. This has resulted in households making one to two extra grocery trips per week, while purchasing larger-than-average baskets in recent weeks, according to IRI. Comparing the 2019 numbers to the week ending of March 22, that had the highest sales peaks, shows an increased focus on stocking up versus quick trips as the main trip mission for meat— especially processed meats. This same week saw a 126% increase in hot dog sales. At the same, quick trips are down as a trip mission, particularly for fresh meats. Countries that experienced coronavirus ahead of the U.S. are now experiencing fewer-than-average trips, but large baskets following the initial panic buying wave at the onset of COVID-19, according to joint research by IRI and BCG.

Source: IRI, Total US, All outlets, 2019 versus week ending March 22, 2020

What’s next? The subsequent week, the first week of April, saw 47 states with some type of executive order governing social and business activities, with only Missouri, South Dakota and Nebraska not having issued stay-at-home orders. Stock-up shopping is likely to taper further as pantries and freezers are full, consumers are settling into to new realities of social distancing and are confident there will be ample food. Increased everyday demand is likely to continue while social distancing measures are in effect. Shoppers are preparing more home-cooked meals across all meal occasions, from breakfast to dinner. Additionally, students of all ages are home from school, evening activities are cancelled and shoppers emphasize healthful meals. At the same time, economic pressure is building. Amid the largest weekly spikes in unemployment numbers, financially vulnerable consumers are extremely concerned about COVID-19 and its health and economic impacts. Their grocery patterns are likely to be influenced by money-saving measures, not unlike those seen during the height of the recession, such as buying private brands, smaller packages/amounts and seeking out promotions. All this is likely to result in a new baseline driven by higher everyday demand. The unknown is how high this demand lies above the old normal. Shopping patterns will also likely remain very different in number, size, day of the week, day part and online ordering trends. “I am shopping early to avoid or limit contact with others during this coronavirus,” noted a shopper through the CCF program. “It is nice to have the meat available before 6.30 a.m.”

210 Analytics and IRI will provide sales updates weekly, every Monday. Meanwhile, please thank the entire meat and poultry industry, from farm to store, for all they do to ensure supply during these unprecedented times. #MeatFeedsFamilies  #SupermarketSuperHeroes

Source: IRI/210 analytics LLC