How grocers can grow fresh meat sales
When it comes to getting consumers’ forks into fresh meat products, Canadian food producers and retailers are at a fork in the road. Yet, even as several notable headwinds are challenging the supremacy of meat at the centre of the nation’s dinner plates, new opportunities are emerging to maintain the health of the category.
Chief among the obstacles in the sector are the rising costs affecting every stage of the farm-to-table journey. For consumers, this means a 5% to 7% increase in meat prices this year, according to the 2024 edition of Canada’s Food Price Report from Dalhousie University, the University of Guelph, The University of British Columbia and the University of Saskatchewan.
“Sixty-five per cent of consumers are comparing prices to manage inflation,” says Asad Amin, head of syndicated solutions at Ipsos, adding that this behaviour has led to declines in consumption – particularly for beef – since 2022.
According to data from NIQ, fresh meat sales increased 2.7% to $7.9 billion for the 52 weeks ending Dec. 30, 2023, while volume remained flat.
Michael Young, president of Canada Beef, acknowledges financially motivated changes in consumer habits. “It’s definitely affecting shopping behaviour,” he says. “To be honest, we expected it to happen a little sooner, but it’s definitely happening now.”
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Young says cost pressures are leading consumers to stock up on cheaper ground meat products and prompting the beef industry to promote “value cuts” such as the round, hip and chuck to retailers who are reducing the number of meat SKUs on offer. Chris MacDonald, director of operations at Metro’s Food Basics chain, adds that shoppers often look for larger family-size products to stretch their dollar.
Without question, inflation is putting the squeeze on everyone from farmers to consumers. But price is just one of several trends – from shifting demographics to sustainability-minded shoppers – shaping this moment in meat.
International influences
From his vantage point on the retail side, MacDonald has noticed the meat category growing beyond the traditional Canadian staples of beef, pork and poultry.
“Lamb, veal, goat, oxtail – the list goes on,” he says. “There is definitely more diversity in the meat selection, which is driven by two factors. One is the increase in new Canadians, who are seeking to prepare cultural dishes from their homeland. Then, there’s the Canadian-born consumer who’s seeking and exploring food from different parts of the world.”
Experts say this isn’t necessarily making itself apparent in raw numbers, but demographic trends point to an ever-increasing share of the market for what were previously niche meat products. Amin from Ipsos notes that “multicultural Canadians now account for 20% of our population – the size of Quebec.”
Matt Dill, director of category management, fresh for Empire-owned Farm Boy, says these demographic trends are shaping the grocer’s efforts both on the retail front and in the production of its private-label items.
“While globally, goat and lamb comprise around 5% of meat consumption, Canada reflects only approximately 1%,” Dill says. “However, with our nation’s growing cultural diversity, there’s a clear appetite for exploring new culinary horizons, driving interest in these unique meat varieties.”
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As the Muslim population in Canada continues to grow, one trend in the meat category that has become particularly important is the development of halal-certified products. “It’s a big topic of conversation for a lot of our vendors,” says MacDonald from Food Basics.
Dill says Farm Boy has responded by making halal a staple of its private-label offerings. “We currently carry a variety of halal-certified veal, lamb and chicken products, and recently we bolstered our halal offerings with some beautiful Wagyu steaks,” he says. Wagyu frankfurters are also among the chain’s halal items.
But, the influence of global cuisine goes far beyond halal. “New innovation like Parmesan Rapini Sausage and Piri Piri Flattened Chicken are a direct benefit from learning about the unique demographics and food cultures here in Ontario,” explains Dill.
Canada Beef is also seeing and responding to Canadians’ expanding culinary palates. “Next year, we’re going to be rolling out a whole new marketing strategy. We’re going to look at eight or nine different ethnic groups that are growing rapidly in Canada. In about 10 to 15 years our target market is going to be new Canadians and their offspring,” says Young. “We’re preparing information for retailers about how to merchandise and cut beef that is going to be culturally acceptable to new Canadians, because we want to get a jump on it.”
Indeed, Dill sees the category continuing to evolve over the coming years. “These trends underscore the dynamic nature of meat consumption and the importance of staying attuned to our customers’ preferences,” he says. “Canadians seem to be all about the idea that the world is like a big buffet of flavours just waiting to be tasted.”
Sustainable solutions
Canadian consumers are mindful of the ethical and environmental impacts of the meat they eat. Retailers, food producers and industry-watchers alike point to the rising importance of how meat dishes arrive to the plate.
“More than ever, consumers are seeking to do good through what they eat,” explains Patrick Lutfy, senior vice-president, marketing at Maple Leaf Foods. Lutfy touts Maple Leaf ’s use of 100% recyclable trays made with 95% post-consumer recycled content for its fresh chicken products. “We are also the largest producer of raised without antibiotics fresh meat in Canada.”
Canadians of all ages say they care about ethics and sustainability, but the emphasis they put on these factors differs by generation. “Older people do care about the environment, but they are less likely to change their diet or pay more for environmental reasons,” says Joel Gregoire, associate director, food and drink at the research firm Mintel.
READ: Sustainable shopping: Where do we go from here?
However, the preferences of young consumers are becoming increasingly important for an industry seeking to remain relevant – and profitable – into the future. “It’s a clear standout area of interest among younger cohorts,” says Amin. “They are more driven by environmental, sustainability and governance factors than other cohorts.”
MacDonald believes the values of these emerging generations are pushing producers to make meaningful change. “You see the meat industry offering grass-fed options, antibiotic-free options, and the meat industry as a whole focused on improving animal welfare, reducing greenhouse gas emissions and ensuring packaging is made from 100% recyclable materials,” MacDonald says. “The millennials and gen Z, they’re on the ball and they’re challenging the industry. I think it’s making everyone more accountable and transparent.”
The information superhighway
When it comes to transparency, Mintel’s Gregoire says the industry could benefit from showing even more of its work, allowing consumers to make more informed purchasing decisions. He says a lack of information leads today’s consumer to emphasize recyclable packaging over the total carbon footprint and greenhouse gas emissions that go into meat production. “It’s hard for people to make that connection between what they’re eating and cow farts.”
“One thing we do see in terms of what people are open to is something like we do with nutrition,” says Gregoire. “If you can have something independently verified that has a lower carbon footprint and is better for the environment, consumers can look at that and make an informed decision. But, if you don’t have that, how can the average shopper know?”
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Canada Beef has taken an innovative step in this direction. During the COVID-era, Young says the organization began work on a hand-held scanning tool it calls the Canadian Beef Information Gateway. Now launched in retailers across the country, it relays product information to consumers when they scan the on-pack UPC code using their mobile device.
“It gives you information about everything: nutrition, grading, sustainability – anything you want to know about beef when you’re deciding what product to try,” explains Young. “Hit the button to say, ‘allow your phone to read the UPC code,’ and you can find recipes and cooking videos.”
Canada Beef is now partnering with individual retailers on custom versions of the tool that incorporate bespoke branding elements. It’s all part of a bet that, in a meat industry facing challenges on multiple fronts, an informed consumer will be a loyal one.
This article first appeared in Canadian Grocer’s March/April 2024 issue.
