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Margins, Market Share and the Value of Branding

Connor Guyton

Reading Time: 2 minutes
A woman comparing case ready meat products in the grocery store
As the U.S. beef cattle herd continues to rebuild, consumers will continue to see high prices and packers will continue to battle low margins. Weather conditions and low cattle supplies are pushing live cattle prices higher, putting the squeeze on an industry that already struggles. The U.S. has recently had some of the lowest margins for beef packers in years. Packer margins have fallen more than 140% since 2022.1 One way to combat low margins is by focusing on gaining market share. And one way to increase market share is through branding.

In 2022, only 6% of whole muscle beef in the meat case was unbranded; 73% had a private or store label and 21% had a national or manufacturer brand.2 Today, this is in line with consumer demand – only 5% of consumers prefer an unbranded product when making fresh meat purchases and that number has been falling over the last decade. In 2023, more consumers are reaching for private label or store brand products than national or manufacturer brands, but that’s a trend that seems to be caused in part by current inflationary pressures.3 These preferences are also being reflected in sales data. According to data from Circana (formerly IRI), the percent of beef sales that were unbranded product dropped 5% between 2015 and 2019 and has continued to fall more in line with consumer expectations.4

The ratio of dollars earned per pound of protein is higher for private label and national brands than it is for unbranded products, suggesting value generated by brand equity. Additionally, branding allows a company an opportunity to tell their story, which can significantly increase market share. While price is an incredibly important factor when choosing beef at retail, it’s far from the only factor. Only about half (54%) say price is the most important influence on their beef purchase; 14% consider quality first, 10% consider raising claims, and 8% consider the brand itself. Smaller numbers of consumers look first to nutrition claims, the color of the meat, package size, package type or environmental claims.5 Branding provides the opportunity to message easily about the product’s quality and claims and pull in new customers who are looking for the attributes you’re offering.

There’s no getting around the ups and downs of the cattle cycle and profit margins. But branding is a proven way to increase market share and develop customer loyalty.

1 Meatingplace, Beef packer margins at worst point since 2018, August 2023
2 Cryovac Brand, National Meat Case Study, October 2022
3 Midan Marketing, Meat Consumer Segmentation 3.0, August 2023
4 IRI, Fresh Proteins Branding Analysis, September 2020
5 Midan Marketing, Beef Attributes Report, August 2022

About the Author

Connor Guyton blends art and science, combining creative flair with the technical knowledge of meat. As the Insights Analyst at Midan, she weaves the perspectives of both consumer and supplier into the thought leadership pieces she develops, and delivers the latest research findings to our clients. Connor’s life experiences seem almost tailor-made for providing consumer insight at Midan. She earned a bachelor’s in communications from Mississippi State University and worked as a lifestyle news reporter before earning a second bachelor’s degree in food science, nutrition and health promotion and interning with the American Meat Science Association. Now, her diverse background helps her connect the dots behind data trends to provide the meaningful “why” to clients.
Connor Guyton