As chaotic and tumultuous as 2020 was, it did bring some good news to the meat processing industry. Consumers did not lose their appetite for meat when the Coronavirus pandemic closed down restaurants. What’s more, many of them developed an appreciation for their local meat markets and niche online delivery companies. It led to a boom period for small and mid-sized processors across the country, and all evidence shows that 2021 is shaping up to be another strong year for the industry.
As vaccinations continue to be given to the American population, the virus will ease its grip on the population. When that happens, consumers should return to their usual habits of wandering through grocery store aisles, says Phil Kafarakis, former president of the Specialty Food Association and a senior advisor to boards, CEOs and governments.
“Click-and-collect practices will decline as the virus begins to dissipate and people will want to escape the house,” he adds. He said that lunchmeats and processed meat products like hot dogs of all species and brands, as well as private-label store brands will continue to grow share.
Kafarakis said that consumers will continue to prepare family meals for supper, and they will be on a search for more flavor and products they have heard about to incorporate into their eating routines.
“Meat departments will have to prepare for requests for family-style cuts of meat -- roasts of all varieties across multiple species, steak cuts from premium bone-in varieties to flat-iron strips and shredded meat. Consumers will be looking to maintain family time dinner and special occasions, as they look to incorporate more of the restaurant-style meat experiences that they have missed,” he adds.
From a business perspective, meat processors – larger ones specifically – struggled to handle the complexities of the pandemic. Their inability to operate at full capacity led to problems with the supply chain.
“I think manufacturers are going to struggle until they figure out how to really get their plants in a safe place,” says Nancy Jo Seaton, owner of Seaton Food Consultants. She adds that OSHA may crack down harder in terms of worker safety in the Biden Administration than in the Trump administration.
Seaton points out that larger plants still rely on human labor instead of automation, and while that has kept costs down, it has not prepared them to handle situations like the current one. What’s more, the employees are not learning the skills necessary to become a well-rounded butcher.
“The whole job of being a butcher has been diminished, and it’s through making the whole process go faster and taking costs out that that career has been diminished,” Seaton says. “You’re making a single cut, whether at a chicken line or a turkey line or a beef line or pork line. If that’s all you do, you’re not really building skills as a butcher, as you would at a retail facility or a small manufacturer.”
Seaton points out that the cost of meat remains quite low, but she questions if the major processors aren’t doing a disservice to the industry by reducing the costs so dramatically. She referred a recent trip to a club store where she bought two packs of two pork loins for $8.
“The cost to the consumer remains low, obviously to encourage us to buy it, but maybe that’s not its true value,” she notes.
The problems that the larger processors had with the Coronavirus will also have an impact on the industry as a whole. Small companies did a better job of continuing operations while keeping their employees safe. However, the reports of those mass outbreaks and some deaths has overshadowed the industry as a whole. It will fall to individual processors and retailers to defend their record in order to appease consumers.
“Retailers and packers will absolutely have to communicate the safety and quality of the products being sold, beyond what has traditionally been acceptable,” Kafarakis says. “Marketing and merchandising activities will certainly require more intense and credible messaging that focuses on the processes in the harvesting and preparing of fresh meat products – from slaughter plants to grocery store back room meat departments. Stressing safe meat-plant environments and employee health will be an area of consumer interest that traditionally is messaging that the meat industry has never had to deal with.”
One of the bright spots for the meat industry will be in foodservice. Restaurants around the country were forced to close due to the dangers of large crowds sitting indoors. That has started to change, as restaurants are opening in a limited capacity in many states. As the vaccination effort continues, those restaurants should be able to further open up to diners again. When that happens, expect a major foodservice boom.
“If these restaurants can hang on, I think there’s going to be a big reward at the end. They’re going to be so busy there won’t know what to do,” Seaton says.
In order to have a successful 2021, Seaton recommends a couple of tactics. One, small processors should work with their customers, whether they are retail or restaurant businesses, to become indispensable partners. That partnership entails not only being able to work with their ideas, but coming to them with promotion or product ideas of your own. It moves the relationship from a simple transactional one to a collaborative one.
“All you have to do is offer one idea to establish the fact that you’re thinking about their business, and then you’re going to be in every meeting,” she says.
Seaton also advises processors to take a good look at their plant and its flexibility. Evaluate what equipment can be moved and what capabilities can be added. Larger processors don’t have that sort of flexibility, giving small companies another advantage.
“If sausage is your game, how many different formats can you offer?” she says. “Be at the forefront of offering your customer base new things, because that’s what everybody’s going to be after in another couple of months.” IP