Meat+Poultry - March 2021 - bacon - 4

BACON TR END S

Sustained demand
Despite channel shifts induced by
the pandemic, consumers' appetites
for bacon keep growing
By Joel Crews
j c re w s@ so sl an d.com

S
4

You couldn't
move the
foodservice
product over
into retail fast
enough. "
Steve Meyer

Thomas - stock.adobe.com

ince the onset of the COVID-19 pandemic,
retail sales in the meat department have
surged as consumers shifted spending from eating out to eating almost
exclusively at home, especially in early
2020. Of all the categories in the meat
department, bacon sales in the United
States showed the biggest growth, going from an
increase of 2.9% at the end of 2019 to nearly 14%
in Q1 of 2020 and spiking to 33% over the previous year's second quarter, according to data from
IRI Integrated Fresh. The last two quarters of 2020
saw bacon sales gains over the previous years of
approximately 18% and 19%, respectively. As of
January 2021, bacon sales grew nearly 23% over
the same period the previous year with sales topping $489 million.
Despite channel shifting from nearly 60% of
US bacon being sold at foodservice to almost
all being sold at retail in 2020, the demand for
bacon has remained rock solid. According to an
economist for the pork industry, market prices
had nothing to do with Americans' insatiable
appetite for pork, but instead had everything to
do with pork processors coping with COVID19-related closures combined with the logistics
of reconfiguring foodservice-serving plants for
retail customers and creating production lines
that keep front-line workers safe.

" When we took bellies to 30¢ [per lb] at the
very beginning of April last year, it had nothing to do with consumer-level demand, " said
Steve Meyer, PhD, consulting economist with
the National Pork Board and National Pork
Producers Council, " it had everything to do with
the fact that we couldn't process them all. "
Historically, belly pricing is routinely volatile,
Meyer said, with the bulk of the supply going to
supply restaurants with bacon.
" That's what has driven the belly market over
the last decade, " he said.
The oversupply issue was so dire at the
height of the bottleneck that bellies were being
rendered due to the capacity limitations of
processors.
" You couldn't move the foodservice product
over into retail fast enough, " Meyer said. " So, all
of a sudden you had too many bellies on your
hands, but you didn't have enough at retail and
belly prices went through the roof at $1.90 to
almost $2 a pound for a little while in May. "
The roller coaster continued into the summer of 2020, when belly prices moderated to
about 90¢ as processing plants slowly came
back online. At the end of the summer and into
the fall, the market seemed to reach an equilibrium, Meyer said, with belly pricing that was in
the $1.60 to $1.80 per lb range.
" So, if anybody wants to try any predictions in
the belly market, good luck, " Meyer said.
Heading toward the end of February 2021,
continued strong demand for bacon is reflected
in the average price of belly primal, which was
$1.58 the week after Valentine's Day, compared
to the same time in 2020, when that price tanked
to 71¢ and six weeks later bottomed out at 30¢.
" But we have a different dynamic now because
a lot of people had to use bacon at home last year
because restaurants were shut down. So now, if
those folks stand in and say, 'Well, gee, I kind of
like having my bacon at home,' and then the restaurants get back [reopened], it can be a very
strong belly market all year, " Meyer said, adding that cold storage stocks of bellies are much
lower than in past years.
The fact that US pork demand actually grew
by 3% last year came as a surprise to most.
" I would have never told you that could happen, and it did, " Meyer said. " And now, what happens with people that may have not used much
bacon at home before and now do and then if
you start having the foodservice industry come
back, it could be a very good year for bellies. "

2021 BACON TRENDS + TECHNOLOGY MEAT+ POULTRY

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3/2/2021 1:40:49 PM

Meat+Poultry - March 2021

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