Gearing up for the 2023 Summer Grilling Season

As Figure 1 shows, both food away from home (foodservice) and food at home (retail) inflation rates remain at elevated levels (retail inflation rates do appear to be dropping while foodservice inflation rates appear to be increasing). A declining retail inflation rate in conjunction with a rising foodservice inflation rate may favor retail demand, especially on the cusp of summer grilling season¹. While dropping retail inflation rates are a sign of consumer relief, stagnant real wages and still sour consumer sentiment may cool sales performance moving into summer^2,3. 

Observing wholesale prices may shed insight on the direction primal prices may trend towards as summer grilling season approaches. As Figure 2 shows, all the primals listed (and 81% lean ground beef) have fluctuated in their wholesale price levels compared to the corresponding week in 2022, and all have seen an uptick recently. This increase in comparison to last year is possibly a mix of current inflationary pressures upstream in the supply chain and due to an expected seasonal increase in demand on behalf of grocers in preparation for the beginning of summer grilling season⁴. 

Comparing primals shows that certain cuts may be more favored by economical shoppers on the price front. For example, brisket appears to have leveled off its increase from earlier weeks. Beef brisket is also one of the few primals currently down pricewise when considering its 2023 first quarter average⁵. However, it should be noted that beef supplies are largely expected to fall short of meeting market needs throughout the rest of 2023, which could affect the retail price conversation moving forward⁶.

Looking to retail markets, 2023 retail beef sales have so far trended very similarly with 2022 both in terms of dollars, pounds sold, and average price per pound⁷. Figure 3 details the sales trends of beef at retail for 2021, 2022, and 2023. In terms of pounds sold, 2022 and 2023 have trended lower than 2021, but 2022 experienced a 61% increase in pounds sold between May and June 2022⁷. This jumpstart to the 2022 summer grilling season remained above 2021 levels until August, where they were virtually equal, before both experiencing a bump in sales approaching Labor Day⁷. In terms of dollars sold, 2022 and 2023 have trended higher than 2021 levels, with 2022 remaining higher than 2021 until 2021 experienced a higher increase from May to June that left them virtually equal for the remainder of the year⁷. 

Fresh ground beef has been the historic champion of summer grilling season, both in terms of dollars and pounds sold, having sold $4.1 billion (872 million pounds) worth of product during the 16 weeks between Memorial Day and Labor Day 2022⁷. Ground beef sales during the 2022 summer grilling season were also 15% higher in terms of dollars and 7% higher in terms of pounds sold when compared to the 2021 summer grilling season⁷. Another popular beef cut during the summer months has been ribeye steaks, having sold $1.1 billion (99 million pounds) worth of product during the 2022 summer grilling season⁷. These sales were 3% higher in terms of dollars and 14% higher in terms of pounds when compared to the 2021 summer grilling season⁷. With supplies expected to be tighter this year than years’ previous, and the wholesale-retail price spread remaining high even during times of a wholesale price decrease (meaning retailers have had opportunities to decrease their price levels but did not do so), there is a reasonable chance that 2023 can eclipse both 2022 and 2021 in terms of dollar sales, even with pounds sold being lower this year compared to the last few years^4,6.

As consumers may be looking to stretch their protein budgets moving into summer grilling season, certain beef cuts have gained popularity at retail compared to 2022.  As Figure 4 shows, briskets, flank steaks, skirt steaks, and value-added fajita meat have all seen healthy increases in dollar sales and pounds sold when compared to 2022 (the timeframe is year to date 2023 week ending 4/22/2023). While there are many likely reasons why these specific cuts have seen an uptick in sales, one possible explanation is that these cuts typically have lower price per pound averages when compared to other beef cuts⁷. Another is that most of these cuts can be used in many different types of cuisine, thus making them appealing from a versatility standpoint. Retailers may continue to see some cuts such as these be more popular with shoppers compared to previous years as consumers keep looking to make the most out of their dollars while still enjoying the 2023 summer grilling season.