Hindsight 2020: Retail and Foodservice Trends Through the Pandemic

 

Source: Beef Checkoff

via Drovers - April 1, 2021

 

A year into one of the largest disruptions of the global and U.S. economies, some industries and market sectors are continuing to feel the severe impacts of COVID-19. One of the largest industries in the U.S. to continue struggling due to the impact of COVID-19, the foodservice industry, comprises the majority of consumer beef demand in the United States on an annual basis. About 60% of annual beef demand is consumed at restaurants, schools, entertainment venues, and other non-retail locations1; this past year, grocery stores experienced a demand shock from increased shopper activity and temporary supply deficits. While the increased demand and the impacts of COVID-19 temporarily led to supply constraints during the summer, the retail industry rebounded well for the remaining months of 2020.

 

A major change in consumer behavior that affected the retail industry was the “stocking-up” behavior experienced at the beginning of the pandemic. Shoppers rushed to their grocery stores to buy surplus groceries, especially meat products. Even as late as September of last year, 50% of consumers surveyed reported to be “stocking-up” at a greater rate than normal.[i] With this behavior, and with the foodservice industry restricted or shutdown, 83% of consumer meals were being cooked and consumed at home.2 Ground beef was one of the main products to be stored in refrigerators and freezers, with over 50% of consumers reporting to have surplus ground beef products.2

 

Due to the various impacts of COVID-19 leading to increased demand, the retail meat department had a tremendous year: all fresh meat sales increased by 19%, from $49.5 billion in 2019 to $59.1 billion this past year, adding $9.6 billion in added value.3 Beef sold $31.9 billion dollars in 2020, adding $5.9 billion in additional value while increasing volume sales by 606 million pounds to bring total sales to 5.98 billion pounds.3 This added value translates to a 61% share of the total increased value of the meat department.3 Ground beef was responsible for 34% of beef’s increased value, or an additional $2.02 billion in sales.3 Other proteins experienced volume and value growth just not to the level of beef; chicken added $1.8 billion in additional annual value on 501 million pounds of extra volume sales, while pork elevated its annual volume sales by 245 million pounds, adding $1.2 billion in total revenue for 2020.3 The elevated sales not only came from the demand increase, but also due to some price inflation that was experienced in 2020, mostly as a result of supply chain disruptions in meat production. Average retail price per pound for beef products increased 10% from $4.85 in 2019 to $5.34 for 2020.3 While these supply chain disruptions impacted revenues in a positive manner at the retail level, the foodservice industry had the opposite impact.

 

The foodservice industry has faced the largest disruption of operations in modern history...

 

more, including table, charts

https://www.drovers.com/news/industry/hindsight-2020-retail-and-foodservice-trends-through-pandemic