So, what’s the cost to packer/processors who don’t maintain their share of consumers’ stomachs, hearts and wallets? The meat industry faced this dilemma at the onset of the pandemic — and now rising meat prices, labor shortages and supply chain issues have brought us to another crossroads.
In a blog I wrote during the early days of the pandemic, I cited WARC research showing that “going dark” with your marketing efforts could have a huge impact on your mid- and long-term returns — this need to avoid going dark has only intensified with the rise in inflation.
Fueled in part by global unrest, inflation is now the sixth-most worrisome issue across 28 countries.1 And according to 2021 year-over-year USDA data, meat is the largest driver for food inflation: Beef and veal prices rose 9.6%, pork prices 6.3%, and poultry prices 5.6%.
Create Value to Combat Rising Prices
Even though shoppers are looking for bargains, discounting isn’t always the only answer. One of the key reasons why brands should focus on building value in tight financial times is that consumers often focus on the best value, not the lowest price.2
Here are a few ways to build value:
- Capitalize on the “Treat Yourself” Trend
Give consumers permission to treat themselves to the great taste of meat. According to 2021 NCBA data, taste is the defining attribute of beef among all demographics.3
- Continue the Premiumization Trend
Despite inflation, 2021 IRI data reports that 5.2% of general respondents and 11.2% of low-income respondents are buying more premium food to recreate restaurant-style meals at home. To sell the premium experience, feature claims-based and higher-end cuts in your marketing4 and share high-quality video and images through social media and review sites.5
- Tap Into the Convenience Trend
Today’s time- and cash-strapped consumers look for varied product offerings and case ready packaging that’s easy to identify, open and freeze. You can also promote convenience with quick, easy dinners that feature lower-priced options like ground beef.
- Promote Meat’s High Nutritional Value
In 2021, 64% of consumers bought “better for me/my family” meat and poultry options.6 During the pandemic, 3 in 5 consumers planned on eating healthier.7 Appeal to these consumers, which include Flexitarians and Reducetarians, by highlighting health claims like protein in ads or on package.
- Create Trust and Loyalty Through Strong Branding
Warren Buffett said, “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The January 2022 IRI Shopper Survey supports this opinion, stating that consumers will spend on more expensive items if they trust the product attributes or brand.
Recent examples in the food industry demonstrate the relationship between trust and sales. Nestle’s sales rose 6.5% in Q3 of 2021 — 2.1% from price hikes and 4.4% from volume growth — driven by consumers drinking high-quality coffee at home.8 In December, Chipotle’s shares also rose 10% despite a 4% price increase by touting benefits like its new employee base wage.9
Raise the Table Stakes and Stay in the Game
According to the Kantar Millward Brown database, brands that cut their marketing budget by 50% or went dark for a year took three to five years to regain pre-recession levels. In the battle against rising meat prices, your marketing should create the kind of value that helps keep meat on the table. Leave the door open with consumers, because once that relationship is strained, the cost of re-establishing it can be tough to swallow.
2 “In Cash-Strapped Times Brands Should Build Value, Not Discount Prices,” WARC, February 2021.
3 Steak and Burger Reference Reports, National Cattlemen’s Beef Association, 2021.
4 2022 Top Trends to Watch, Midan Marketing, January 2022
5 What We Know About Luxury Brands, WARC, December 2021.
6 Anne-Marie Roerink, Principal, 210 Analytics LLC, The Power of Meat 2022: An In-Depth Look at Our World Through the Eyes of the Shopper; Report sponsored by Sealed Air Food Care Division/Cryovac® and Published by Food Marketing Institute Foundation for Meat & Poultry Research & Education.
7 In Brands We Trust? Edelman Trust Barometer Special Report, 2019.
8 “Inflation Trade? Nestle Reaps Benefits From Higher Prices,” Reuters, October 2021.
9 “Is Inflation Really This Bad, or Are Greedy Companies Profiting Off the Pandemic?” Fortune, February 2022.
This content originally appeared in Meatingplace.