Share of Wallet, Share of Plate, Share of Enjoyment

by John Lundeen, Senior Executive Director, Market Research, National Cattlemen’s Beef Association, a contractor to the Beef Checkoff

Summary
The July 2013 wave of the Consumer Beef Index found that underlying perceptions of beef remain strong. Coupled with that study, per July 2012 to July 2013 FreshLook scanner data, the consumer spent 3.7 percent more per retail pound for beef year-over-year. All told, that represents incremental beef retail expenditures of more than $500 million. Let’s call that share of wallet. Per the Consumer Beef Index, 93 percent of consumers stayed in the beef home use category (no reduction), eating beef at least monthly. There was, however, slippage in average weekly consumption of beef.  Let’s call that share of plate. Finally, beef’s taste score-- beef’s reputation as king of the grill and beef’s ability to provide consistently good results all remained high scoring attributes, as recorded in the Consumer Beef Index. Let’s call this beef’s share of enjoyment.  

Consumers continue to love beef, and are paying more for it. The key question becomes the effort required to regain share of plate once current supply shortages ease.

Background
The checkoff-funded Consumer Beef Index (CBI) is a semi-annual online survey initiated in 2007 that is designed to identify and track key consumer perceptions of beef and to spotlight key consumption trends. In July 2013, 1,004 respondents completed the 14th wave of the survey.  The sample is national in scope and is tested for balance with national demographic data, including gender, ethnicity, region of the country and age (ages 13 to 65 were included in the sample). A very small minority of consumers with absolutely no food decision making authority, either at-home or in restaurants, are excluded. 

Discussion
Share of Wallet (Sourced from FreshLook data, categorized by the VMMEAT® System
Fifty-Two Weeks Ending 07/28/13)

A comparison of chicken and beef retail dollar sales is our starting point. 


 
Due to the drought and reduced supply, beef’s pound sales in the grocery channel have declined by 1 percent. Thus the full increase in beef retail dollars was due to increased prices for beef. The consumer stepped up to the grocery meat case and spent approximately $550 million additional for beef.  

The story is slightly different for chicken, with pounds up by 2.6 percent, and price per pound up by 4.9 percent. Using 2012 pounds as the base, consumers paid approximately $450 million additional for those pounds, and an incremental $280 million for a greater number of pounds, totaling the increased $730 million in chicken retail sales.  

The consumer reached deeper into their wallet to buy both beef and chicken at retail.

Share of Plate (Sourced from Consumer Beef Index, July, 2013)

Ninety-three precent of consumers report eating beef monthly in the July 2014 CBI, a percentage that has not changed statistically in seven years of tracking. When asked if “beef is too expensive and definitely not worth it”, there has not been an increase in the percent of consumers who agree. In addition, if you dig deeper into the consumer sub-segments that believe that beef “is definitely not worth it”, a stronger percentage of light users are found to be in agreement. 

 

 

 

Thus, consumers are not moving out of the beef franchise. They are however, eating beef less often. This illustrates itself in two ways. First, average weekly consumption of beef has dropped from 2.7 in 2007 to 2.0 in 2013. And beef’s heavy user population, those eating 3+ times a week, has dropped from 43 percent in 2007 to 34 percent in 2013.  

 

  

 

 

Thus, even though consumers are not rationing their beef dollars, they are rationing their beef consumption.  

Share of Enjoyment (Sourced from Consumer Beef Index, July, 2013)

Consumers continue to love the taste of beef. The best illustration of this is beef’s taste scores, which have continuously risen over the time period that the Consumer Beef Index has been fielded. We must not ignore the fact that chicken is winning over consumers on taste also. Consumers also place value on safety, nutrition and convenience. To maintain value in the consumer’s mind, compete effectively with chicken, and command robust beef prices, the industry must work hard to meet consumer needs on all of these attributes. But most importantly, the industry must continue to put great tasting beef in the case, on the menu, and on the plate.

 

Conclusion
Consumers have not lost their underlying love of beef, but the industry must recognize that there will be a need to enhance promotional activity once the current supply shortfall ends.  Consumers have learned to put different dishes on their table, and it takes effort to convince them to add an old favorite back into the mix.  

 Additional Resources

Consumer Insights Report

Tags: Beef Issues Quarterly, Research Findings, Spring 2014

April 3, 2014