Retail Sales On the RISE
August 1, 2005
Retail Sales On the RISE
By Sam Gazdziak, Senior Editor
Consumers continue to bring home the bacon.
Consumer consumption of bacon has been on the rise since 1998, when it was being eaten on an average of 18 times per person per year. More than half of all households report that they always have bacon on hand in the kitchen.
According to the NPD Group's National Eating Trends, bacon as an ingredient has increased over time, particularly in sandwiches. Sandwiches make up half the usage of bacon as an ingredient. BLT sandwiches are among the top 15 sandwiches eaten in-home each year. Other popular uses for bacon include casseroles/hot dishes, egg dishes/omelets, and salads.
Almost three-quarters of the time, though, bacon is eaten for breakfast. Breakfast and sandwich meats have had double-digit increases since 1997, and refrigerated bacon is one of the leading reasons for that increase. Bacon consumption at breakfast has risen to an average of 13 times per person per year.
The top trends
As the top-selling retail brand, Oscar Mayer, Madison, WI, has continued to expand its portfolio of products, introducing a maple-flavored one-pound traditional bacon product last year and expanding on its ready-to-serve line of breakfast meats this year. “The bacon category continues to perform well as consumers continue to embrace their love for the great taste of bacon,” says Darin Dugan, category business director, breakfast meats.
Flavored bacon products are a popular trend, notes Karen Boillot, director, retail marketing, for the National Pork Board. “Premium bacons, such as sugar-cured, peppercorn, etc., seem to be on the increase, as retailers and packers look for ways to add profitability to this segment,” she notes.
Ready-to-serve bacon has also been a brisk seller in the bacon market, with consumers looking for a more convenient method of preparation. “Our Oscar Mayer Ready-To-Serve portfolio meets this consumer need, giving consumers the great taste of real Oscar Mayer bacon ready in under ten seconds,” Dugan says, adding that the company recently added ready-to-serve pork sausages and Canadian bacon to the line. Other companies, including Tyson and Farmer John, have introduced similar “quick-serve” products.
According to Information Resources Inc. (see chart below), many of the Top 15 bacon brands reported positive growth in 2004 versus 2003. Hormel, which has seen its Black Label brand increase 12.5 percent, has noted the growth of bacon in its quarterly reports.
“Our strategy to produce convenient, value-added products continues to deliver results. Retail categories with solid growth in the quarter include Hormel fully cooked bacon,” said Joel Johnson, chairman of the board and chief executive officer. In the company's first-quarter reports, Hormel's fully-cooked bacon and bacon bits products were both highlighted for double-digit growth.
Canton, OH-based Fresh Mark's Sugardale brand of refrigerated bacon increased its sales by 6.1 percent, to $28.5 million. “Sugardale's sales have grown primarily as a result of expanding to new markets and increasing market share in existing markets,” explains Kristen Clemmer, director of marketing. She says that the company's top-selling products include regular and thick-sliced raw bacon, and added that Sugardale has also introduced maple-flavored bacon to the market this year.
Bar-S Foods Co., Phoenix, AZ, crossed the $70 million sales mark with its refrigerated bacon. “Bacon sales have been very good due to aggressive promotional activity and favorable markets,” says Robert Uhl, president. Many of its most popular items, including the regular and thick-cut bacon and Old World Premium thick-sliced bacon, promote the bacon’s smoky taste to set it apart from other brands. In addition to its regular-sliced and thick-sliced bacon, Uhl notes, “We also manufacture a low-sodium bacon for those who desire a healthier bacon.”
Smithfield Foods Inc., Smithfield, VA, reported record fourth quarter results and record net income for its fiscal year, ending May 1, and its bacon sales contributed to those records. The company noted that bacon, along with hot dogs and dinner sausage, achieved important share gains. Bacon showed especially strong growth, as sliced bacon rose 7 percent and pre-cooked bacon rose 41 percent in the fourth quarter. For FY 2005, Smithfield noted strong results in its pre-cooked bacon, pre-cooked entrées, and dry sausage products. The company's bacon strategy, launched the previous year, expanded capacity by more than 12 percent in the last fiscal year. NP