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Hot Dogs and Sausages - US - October 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Pricing, health issues, and seasonality chip away at category
Figure 1: Total US retail sales of hot dogs and sausages, at current prices, 2013-17
Health perception needs improvement
Figure 2: Reasons why consumers don’t purchase hot dogs and sausages, health issues, July 2017
The opportunities
Category penetration high in spite of drop in sales
Figure 3: Hot dog and sausage purchase, July 2017
Ease and adaptability leads to use across dayparts and occasions
Figure 4: Hot dog and sausage occasions, July 2017
BFY versions
Figure 5: Hot dog and sausage attitudes, claims and poultry sentiment, July 2017
Premium offerings
Figure 6: Hot dog and sausage innovation, July 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Category hurting now, but expected to get back to growth soon
Affordability across meats may shift consumer spending
Interest in snacking, protein heavy foods intensifies the competition
MARKET SIZE AND FORECAST
Category projected to rebound after recent decline
Figure 7: Total US sales and fan chart forecast of hot dogs and sausages, at current prices, 2012-22
Figure 8: Total US retail sales and forecast of hot dogs and sausages, at current prices, 2012-22
MARKET BREAKDOWN
Sausage segments steal share from hot dogs
Figure 9: Total US market share of hot dogs and sausages, by segment, at current prices, 2015 and 2017
Figure 10: Total US retail sales and forecast of hot dogs and sausages, by segment, at current prices, 2012-22
Supermarkets dominate purchase location
Figure 11: Total US market share of hot dogs and sausages, by channel, at current prices, 2015 and 2017
MARKET PERSPECTIVE
Price drops hurt dollar sales of red meat
Figure 12: Changes in consumer food price indexes, 2013-18
Studies link red and processed meat to cancer
Figure 13: Total US retail sales of packaged red meat and hot dogs and sausages, at current prices, 2013-16
Abundant animal protein options
Figure 14: Total US retail sales of packaged red meat, poultry, and fish and shellfish, by segments, at current prices, 2014-16
Meat alternatives are a popular protein substitute
Figure 15: Consumption, by meat alternatives, October 2016
MARKET FACTORS 
Interest in grilling benefits category
Figure 16: Grilling frequency, April 2017
Hot breakfast occasion getting competitive
Figure 17: Reasons for consumption, by convenience and quick to prepare, May 2017
Popularity of snacking can beef up category
Figure 18: Snack attributes by occasion, by any snacking, by between meals and in place of a meal, March 2017
Young adults approaching, entering parenthood
Figure 19: Households with own children under age 18, by age of householder, 2016
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Category issues hamper small and large companies alike
Category struggles to shake bad health rap
Convenience, versatility remain important competitive advantages
Premium ingredients, flavors may heat up category
Alternative bases
COMPANY AND BRAND SALES OF HOT DOGS AND SAUSAGES
Category struggles brand wide
Figure 20: MULO sales of hot dogs and sausages, by leading companies, rolling 52 weeks 2016 and 2017
Top three hot dog brands make up over half of segment share
Figure 21: TV Ad – “Ball Park Franks – Pass It Down” – Ball Park
Figure 22: MULO market share of hot dogs, by leading brands, 52-weeks ending July 9, 2017
Johnsonville, Hillshire Farm lead in sausage sales
Figure 23: TV Ad – “Guess the Price of That Food By Cole” – Johnsonville
Figure 24: MULO market share of hot dogs, by leading brands, 52-weeks ending July 9, 2017
Figure 25: MULO sales of dinner sausage, by top growing brands, Aidells, Smithfield, and Premio, rolling 52 weeks 2016 and 2017
Jimmy Dean remains the king of breakfast sausage
Figure 26: MULO market share of breakfast sausages, by leading brands, 52-weeks ending July 9, 2017
Figure 27: MULO sales of breakfast sausage, by top growing brands, by Smithfield, Applegate, and Swaggerty, rolling 52 weeks 2016 and 2017
WHAT’S WORKING?
Brands emphasize natural positioning through claims
Figure 28: Hot dog and sausage launches, by no additives/preservatives, 2014-17*
Success in natural channels a bright spot
Figure 29: Natural supermarket sales of hot dogs and sausages, at current prices, rolling 52-weeks 8/16/15-8/13/17
Easy preparation, flexibility among category’s strengths
Consumers prefer name brand hot dogs and sausages
Figure 30: Purchase intent, by name brand and store brand hot dogs and sausages, January 2016 – August 2017
Figure 31: Launches of name brand hot dogs and sausages, by high purchase intent, January 2016 – August 2017
Preference for poultry
WHAT’S STRUGGLING?
Category carries long-term stigma
WHAT’S NEXT?
Clean labeling, clean packaging
Figure 32: Hot dog and sausage launches, by free-from claims, 2014-17*
Figure 33: TV Advertisement – “Big Changes – For the Love of Hot Dogs” – Oscar Mayer
Premium, craft products
Meatless options
All the meat, no harm to animals
THE CONSUMER – WHAT YOU NEED TO KNOW 
Nearly three quarters of consumers purchase hot dogs or sausages
Taste, versatility, affordability, and social element appeal
Negative health perceptions nearly equal among users and non-users
Premium and free-from eases guilt
HOT DOG AND SAUSAGE PURCHASE 
Majority of consumers purchase hot dogs or sausage
Figure 34: Hot dog and sausage purchase, July 2017
Versatility, convenience draw men to category
Figure 35: Hot dog and sausage purchase, by gender, July 2017
Millennials are core hot dog and sausage buyers
Figure 36: Hot dog and sausage purchase, by age, July 2017
Parents purchase across product types
Figure 37: Hot dog and sausage purchase, by parental status, July 2017
Meat type preference differs among races, origins
Figure 38: Hot dog and sausage purchase, meat type, by race and Hispanic origin, July 2017
SAUSAGE FORMAT PURCHASE
Links are most purchased sausage format
Figure 39: Sausage types, July 2017
Older consumers more likely to buy sausage links
Figure 40: Sausage types, by age, July 2017
Black consumers most likely to purchase patties
Figure 41: Sausage types, patties, by race and Hispanic origin, July 2017
HOT DOG AND SAUSAGE PURCHASE DRIVERS
Taste, ease, and versatility open all consumers to the category
Figure 42: Reasons why consumers purchase hot dogs and sausages, July 2017
Older consumers especially value taste, convenience within category
Figure 43: Reasons why consumers purchase hot dogs and sausages, by age, July 2017
Lower-income consumers find hot dogs and sausages to be affordable
Figure 44: Reasons why consumers purchase hot dogs and sausages, affordability, by household income, July 2017
Negative health perceptions lead a quarter to avoid category
Figure 45: Reasons why consumers don’t purchase hot dogs and sausages, July 2017
Health issues deter women from purchasing hot dogs and sausages
Figure 46: Reasons why consumers don’t purchase hot dogs and sausages, by gender, July 2017
HOT DOG AND SAUSAGE BEHAVIOR
Hot dogs and sausages commonly purchased at supermarkets, eaten during the summer
Figure 47: Hot dog and sausage behavior, July 2017
Men most likely to eat hot dogs and sausages year round
Figure 48: Hot dog and sausage behavior, consumption seasonality, by gender, July 2017
Older consumers more likely to purchase hot dogs and sausages at supermarkets
Figure 49: Hot dog and sausage behavior, purchase at supermarkets, by age, July 2017
Bulk hot dogs and sausages appealing to parents with multiple kids
Figure 50: Hot dog and sausage behavior, purchase in club stores, by number of children under 18 in household, July 2017
HOT DOG AND SAUSAGE OCCASIONS
Occasions are primarily every day, yet social occasions are strong
Figure 51: Hot dog and sausage occasions, July 2017
Convenience drives parents to the category
Figure 52: Hot dog and sausage occasions, by parental status, July 2017
Daypart occasions vary by race, origin
Figure 53: Hot dog and sausage occasions, by race and Hispanic origin, July 2017
HOT DOG AND SAUSAGE ATTITUDES
Consumers concerned with quality of hot dogs and sausages
Figure 54: Hot dog and sausage attitudes, July 2017
Women concerned about health, men want new flavors
Figure 55: Hot dog and sausage attitudes, by gender, July 2017
Important attributes varies with age
Figure 56: Hot dog and sausage attitudes, by age, July 2017
Parents more likely to try new flavors, pay more for premium options
Figure 57: Hot dog and sausage attitudes, by parental status, July 2017
HOT DOG AND SAUSAGE INNOVATION
Bold flavors, premium ingredients of interest to consumers
Figure 58: Hot dog and sausage innovation, July 2017
Sausage purchasers more interested in innovation than hot dog buyers
Figure 59: Hot dog and sausage purchase, by hot dog and sausage innovation, July 2017
Younger men most interested in hot dog and sausage innovation
Figure 60: Hot dog and sausage innovation, by gender and age, July 2017
Parents interested in premium and value-added innovation
Figure 61: Hot dog and sausage innovation, by parental status, July 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 62: Total US retail sales and forecast of hot dogs and sausages, at inflation-adjusted prices, 2012-22
Figure 63: Total US retail sales and forecast of hot dogs and sausages, by segment, at current prices, 2012-22
Figure 64: Total US retail sales of hot dogs and sausages, by segment, at current prices, 2015 and 2017
Figure 65: Total US retail sales and forecast of hot dogs, at current prices, 2012-22
Figure 66: Total US retail sales and forecast of hot dogs, at inflation-adjusted prices, 2012-22
Figure 67: Total US retail sales and forecast of dinner sausage, at current prices, 2012-22
Figure 68: Total US retail sales and forecast of dinner sausage, at inflation-adjusted prices, 2012-22
Figure 69: Total US retail sales and forecast of breakfast sausage, at current prices, 2012-22
Figure 70: Total US retail sales and forecast of breakfast sausage, at inflation-adjusted prices, 2012-22
Figure 71: Total US retail sales of hot dogs and sausages, by channel, at current prices, 2012-2017
Figure 72: Total US retail sales of hot dogs and sausages, by channel, at current prices, 2015 and 2017
Figure 73: US supermarket sales of hot dogs and sausages, at current prices, 2012-17
Figure 74: US sales of hot dogs and sausages through other retail channels, at current prices, 2012-17
APPENDIX – KEY PLAYERS 
Figure 75: MULO sales of hot dogs, by leading companies and brands, rolling 52 weeks 2016 and 2017
Figure 76: MULO sales of dinner sausage, by leading companies and brands, rolling 52 weeks 2016 and 2017
Figure 77: MULO sales of breakfast sausage, by leading companies and brands, rolling 52 weeks 2016 and 2017
Figure 78: Natural supermarket sales of hot dogs and sausages, at current prices, rolling 52 weeks 8/16/15-8/13/17
Figure 79: Natural supermarket sales of hot dogs and sausages, by organic ingredients, at current prices, rolling 52-weeks ending 8/16/2015 and 8/13/2017
Figure 80: Natural supermarket sales of hot dogs and sausages, by gluten-free labeling/certification, at current prices, rolling 52-weeks ending 8/16/2015 and 8/13/2017
Figure 81: Natural supermarket sales of hot dogs and sausages, by nitrate-free labeling, at current prices, rolling 52-weeks ending 8/16/2015 and 8/13/2017
Figure 82: Natural supermarket sales of hot dogs and sausages, by grass-fed labeling, at current prices, rolling 52-weeks ending 8/16/2015 and 8/13/2017
Figure 83: Natural supermarket sales of hot dogs and sausages, by vegan labeling, at current prices, rolling 52-weeks ending 8/16/2015 and 8/13/2017

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