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...
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