Trends 2014: Key Forces Shaping How Food is Bought and Consumed

by Alison L. Krebs, Director, Market Intelligence and John Lundeen, Senior Executive Director, Market Research, National Cattlemen’s Beef Association, a contractor to the Beef Checkoff

Summary
While some food trends quickly come and go, those more deeply anchored in societal or cultural change typically have better staying power. As knowledge has grown and technologies, generational perspectives and preferences have evolved, many of today’s eating experiences look different from those we grew up with or once knew. It’s important to understand how eating is changing so we can consider and target how beef best fits into consumers’ lives.

Background
Here is a quick summary of key eating trends and beef’s competitive position for each.


This article will focus on five major trends, including diversity in America and in choice of cuisine, the duality in America based on polarized household incomes, the quest of the average American for a simpler, cleaner food label, greater interest in protein choices and the rise of the small household and desire for smaller food choices.  

Discussion
Who is Today’s Consumer? The Diverse Diner

To begin, let’s look at today’s consumer, where two important dynamics are at play in regard to diversity. Not only are demographics continuing to change, but today’s consumer is interested in cuisines that go well beyond traditional fare.  

First, we need to understand how the face of America has evolved. According to the U.S. Census Bureau, our foreign-born population increased from 6.9 percent to 13 percent over the 60 years ending in 2010 while interracial marriages more than doubled to 15 percent in just 30 years.1 And with the start of the 2014 school year, the student population is now less than 50 percent white.2 Additionally, whereas married couple households made up 81 percent of the total in 1970; that had declined to two-thirds by 2012, and 27 percent of the total are now singletons.3 

Complemented by these broader cultural influences, interest beyond the U.S. borders has continued to blossom. Business has become more global, more Americans now travel overseas and today’s affordable communication technologies have made the world a much smaller place. Travel and cooking shows, along with websites, work colleagues and perhaps the neighbors down the street, have prompted many to expand their food interests and have fun exploring well beyond American cuisine – or even Chinese, Italian and Mexican – to where 60 percent of foodservice eating occasions now include a wide variety of global preparations and flavors (see Figure 1).4,5 

Figure 1:  60% of Foodservice Eating Occasions Are Global Cuisines

  
Source: Hartman Group Compass 2012, Technomic 2014

The High-Low Market
Marketers began talking about a dual market in America some years ago. Luxury brands were seeing sales increases, and companies focused on everyday value found success by catering to those focused on price. But beware being a company or industry serving the middle market.  Here are a few examples.

  • Department stores have increasingly struggled, while dollar stores and outlet malls proliferate. On the high end, those focused on high-end fashion or status (ex. Tiffany) have also done well.
  • Two large cell phone equipment markets have evolved – the first focused on bare-bones pre-paid plans, the other “smart phone” market is constantly adding features and capabilities to their offerings.
  • The jewelry market has diverged into lower-end costume jewelry or high-end custom choices. 
  • Private label “value” grocery offerings continue to grow in grocery stores, offering quality at a lower price than national brands.  But, one will also see plenty of high-end offerings throughout the store … pre-cut fruit, high end salad bars, cheese shops and meals-to-go are just a few examples.   

This environment continues today, with the Federal Reserve reporting on Sept. 4, 2014, that the top 10 percent of Americans enjoyed higher incomes while all other Americans experienced declining incomes between 2010 and 2013.6  The impact on beef varies. On a positive note, steakhouses are expected to have a stellar year in 2014, as seen in the Technomic sales forecast (see Figure 2). And ground beef, the industry’s value offering, continues to put up strong sales numbers. But overall, lower and middle income Americans are purchasing whole muscle beef a few less times at the grocery store. 

Figure 2:  Full Service Restaurant Growth Segments


Source: Technomic Top 500 Reports

What Are Consumers Looking for from Their Food?
Seeking Fresh and Clean

Food technologies that have helped to manage traditional pathogen threats and have enabled consumers to have wholesome, fresh foods year-round with much-improved shelf life at affordable prices are continually being challenged by consumer activists. Whether related to food production, processing, retailing or restaurant ingredients, as consumers have become even more removed from the farm and food processing practices, consumers’ skepticism around the unknown has grown, heightening pressure on today’s food industry practices.  

Figure 3 shows practices across the value chain that have come under fire. 

Figure 3:  Food Industry Practices At All Levels are Under Fire


Source: Food Marketing Institute, 2014 US Grocery Shopper Trends

And since 2007, the proportion of consumers seeking “fresh” and less processed food products has grown by 50-140 percent (see Figure 4). Essentially, the overarching Food and Drug Administration ingredient standard “Generally Regarded as Safe” (GRAS) no longer quells curiosities and concerns.  

Figure 4:  “Fresh,” Less Processed Marks Quality and Health


Source: The Hartman Group Health – Wellness Syndicated Report, 2007-2013

Meat and Poultry Magazine recently ran a feature article concerning the meat industry’s efforts in “Cleaning up Labels.” An interesting example is the current elimination of pure nitrates and nitrites from processed meats, with celery juice and spinach as substitutes. Interestingly, both celery and spinach are naturally inherent sources of, you guessed it, nitrates and nitrites.7  Major food companies outside the meat industry are facing similar pressure to eliminate unknown food additives.  

Protein is Hot
Per NPD’s dieting monitor, about half of American adults are trying to include more protein in their diets today (see Figure 5). And on a very positive note, younger adults are more likely to be looking for incremental protein than older adults.8 

Figure 5:  Younger adults usually look for protein more often on the Nutrition Facts Label


Source: The NPD Group/Dieting Monitor, 2013 Average; Indices Based on Percent of Adults

Beef and animal proteins are not the only winners in this search for additional protein. Although half of Americans see meat as the best source (Figure 6), many other protein sources are ramping up their efforts to be seen as an optimal source.9    

Figure 6:  About half of consumers consider animal protein the best source of protein


Source: The NPD Group/Protein Perceptions and Needs Topical Report

The takeaway for beef? Emphasizing protein, and beef as a high quality protein, is an effort that has heightened potential for success. It is a message that consumers are now ready to hear.  

How Are Consumers Eating Their Food?
Menu Eating

The traditional family meal, where everyone gathers together to enjoy the same in-home prepared food, has evolved. Today, less than one quarter of consumers make dinner at home every night of the week and Millennials do this just 4.5 times per week.10  While some meals like this still do exist, two forces have changed the eating occasion concept from that of a meal to a menu eating experience.

In addition to the changing household structure (referenced above), today’s varying schedules, changing norms and the availability of single-serving food items have liberated the consumer. Fully 47 percent of eating occasions are now alone.11 Additionally, if a family is together at meal time it’s not unusual for the grill to include a steak or two, along with a hot dog, chicken breast and bratwurst to cater to individual needs and desires.

Then there’s been the advent of the snack. Back in 1977-78, 40 percent of the U.S. population didn’t snack at all.  By 2009-2010 the non-snackers had dwindled to just 5 percent, with nearly 20 percent of people snacking five times per day.12 In fact, a full 50 percent of eating occasions are now snacks, further highlighting the need for quick, convenient foods.13 

Conclusion
Today’s consumer trends are impacting the retailer and restaurant, along with the processor and back to the producer. They’re sending signals that the beef industry needs to recognize, review and respond to in order to ensure beef remains consumers’ frequent protein of choice.

 Additional Resources

  1. Pew Research Center, 2012. Intermarried Couples: Trends and Characteristics
  2. CBS News, August 10, 2014
  3. U.S. Census Bureau, America’s Families and Living Arrangements: 2012-2013
  4. Hartman Group Compass 2012, n=16,194
  5. Technomic Trends in Foodservice, 2014
  6. Federal Reserve Survey of Consumer Finances, September, 2014
  7. Cleaning Up Labels, Meat & Poultry, August, 2014
  8. The NPD Group/Dieting Monitor, 2013.   “Disclosed with permission of The NPD Group solely for the purpose for which it is being provided by NCBA (a subcontractor to the Beef Checkoff).  The reproduction, dissemination, or use of this information for any other purpose is strictly prohibited without NPD’s prior written consent.
  9. The NPD Group/ Protein Perceptions and Needs Topical Report. “Disclosed with permission of The NPD Group solely for the purpose for which it is being provided by NCBA (a subcontractor to the Beef Checkoff).  The reproduction, dissemination, or use of this information for any other purpose is strictly prohibited without NPD’s prior written consent.
  10. Food Marketing Institute, 2014 U.S. Grocery Shopper Trends
  11. Hartman Group Compass, 2013
  12. ARS USDA, 2013, Analysis of NHANES Survey, Hartman Group Compass, 2013
  13. Hartman Group Compass, 2013

Tags: Beef Issues Quarterly, Trends Analyses, Winter 2014, Year in Review 2014

December 11, 2014