Bacon and Lunchmeat - US - October 2019

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Key takeaways
The issues
Private label takes no prisoners
Figure 1: Multi-outlet sales of private label bacon and lunch meat, % sales change and % market share change, rolling 52 weeks 2018 and 2019
Attrition rates beating increased consumption
Figure 2: Bacon and lunch meat attitudes, August 2019
Category stuck in traditional usage
Figure 3: Bacon and lunch meat occasions, August 2019
The opportunities
Snacking a solution in more ways than one
Figure 4: Snacking frequency, January 2015 and November 2018
Authenticity and quality in demand
Figure 5: Innovation to drive bacon and lunch meat purchase, August 2019
Create loyalty among unengaged consumers
Figure 6: Repertoire bacon and lunch meat attitudes by consumption, I typically purchase the same brands, August 2019
THE MARKET – WHAT YOU NEED TO KNOW
Lunch meat losses and bacon’s gains slow down
New protein perceptions require shifts
Average age increase may require brands to retap into disengaged audiences
MARKET SIZE AND FORECAST
Bacon and lunch meat remain stable
Figure 7: Total US sales and fan chart forecast of bacon and lunch meat, at current prices, 2014-24
Figure 8: Total US retail sales and forecast of bacon and lunch meat, at current prices, 2014-24
MARKET BREAKDOWN
Refrigerated lunch meat losses flat line
Shelf stable gains are comparatively small, but strong
Figure 9: Total US retail sales and forecast of lunch meat, by segment, at current prices, 2014-24
Bacon growth slows pace
Figure 10: Total US retail sales and forecast of refrigerated bacon, at current prices, 2014-24
MARKET PERSPECTIVE
Protein prevails
Figure 11: Percentage of food products with high/added protein claims, 2014-18
Good vs bad protein debate gets ethical
Figure 12: Whole Foods Video
Plant-based shakes up the protein space
Figure 13: Dietary preferences, February 2019
Cutting carbs mean cutting sandwiches
Figure 14: Reasons for decreased consumption, April 2018
Snacking is a versatile opportunity
Figure 15: Snacking frequency, January 2015 and November 2018
MARKET FACTORS 
Processed meats villainized
African swine fever complicates already unstable trade war markets
Average age increase an issue and opportunity for brands
Figure 16: Population by age, 2013-23
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Dominant Kraft losing grip
Private label chipping away at brand share
Premium cuts take the stage
“Natural” branding can go only so far
Plant-based products grow in availability
COMPANY AND BRAND SALES OF BACON AND LUNCH MEAT
Kraft retains category dominance, while Land O’ Frost flounders
Smithfield the breakout star in refrigerated lunch meat
Tyson grows its share
Figure 17: Multi-outlet sales of bacon and lunch meat, by leading companies, rolling 52 weeks 2018 and 2019
Figure 18: Multi-outlet sales of bacon and lunch meat, by leading companies, market share, rolling 52 weeks 2018 and 2019
Private label continues to chip away at brand leaders
Figure 19: Multi-outlet sales of private label bacon and lunch meat, % sales change and % market share change, rolling 52 weeks 2018 and 2019
WHAT’S WORKING?
Bringing the butcher to the aisle
Figure 20: Bacon and lunch meat brands with premium and thick cut products, MULO sales 52 weeks, August 2018-19
The proof is in the packaging
Figure 21: Bacon and lunch meat brands with claim-heavy packaging, MULO sales 52 weeks, August 2018-19
Figure 22: Bacon and lunch meat claims present on packaging, percent change from 2017-18
Snack-ready formatting
Figure 23: Bacon and lunch meat brands with snack packaging, MULO sales 52 weeks, August 2018-19
Authenticity elevates private label
Figure 24: Bacon and lunch meat brands with regional positioning, MULO sales 52 weeks, August 2018-19
WHAT’S STRUGGLING?
Natural claims can’t carry a product
Figure 25: Bacon and lunch meat brands with natural positioning, MULO sales 52 weeks, August 2018-19
Packaging especially critical for value brands
Figure 26: Bacon and lunch meat brands with natural positioning, MULO sales 52 weeks, August 2018-19
WHAT’S NEXT?
Plant-based products grow in availability
Figure 27: Plant-based bacon and lunch meat brands
“Slow-growth,” “barn-free” and “crate free” the claims to watch
THE CONSUMER – WHAT YOU NEED TO KNOW 
More people decreasing than increasing consumption
Consumption frequency has not peaked
A break from traditional uses is needed
It’s a convenience category
BACON AND LUNCH MEAT CONSUMPTION
Bacon and lunch meat penetration remains strong
No protein type dominates consumption
Figure 28: Bacon and lunch meat consumption, net, August 2019
Deli vs prepackaged divide is small
Figure 29: Bacon and lunch meat consumption, August 2019
Quality, convenience and adventure all motivators
Figure 30: Bacon and lunch meat consumption, August 2019
Households with 3+ children the most engaged
Figure 31: Repertoire bacon and lunch meat consumption, by number of children including 18+ per household, August 2019
Men consume more than women, especially non-moms
Figure 32: Net bacon and lunch meat consumption, by parental status by gender, August 2019
Consumers 55+ finding protein elsewhere
Figure 33: Net bacon and lunch meat consumption, by age, August 2019
BACON AND LUNCH MEAT CONSUMPTION FREQUENCY
Opportunity to increase daily consumption
Figure 34: Bacon and lunch meat consumption frequency, August 2019
Pork bacon struggles to permeate past monthly consumption
Poultry leads consumption frequency
Figure 35: Net bacon and lunch meat consumption frequency, once a week, August 2019
Parents the most frequent consumers
Figure 36: Bacon and lunch meat consumption frequency, by parental status, August 2019
Consumption frequency varies by age
Figure 37: Bacon and lunch meat consumption frequency, by age, August 2019
BACON AND LUNCH MEAT ATTRIBUTES
Claims the proverbial lipstick on a pig?
Figure 38: Bacon and lunch meat attributes, August 2019
Attributes sought differs by protein type
Pork eaters don’t expect ham and bacon to be healthy
Figure 39: Bacon and lunch meat attributes by net consumption, any ham or bacon, August 2019
Healthier proteins warrant more claims
Figure 40: Bacon and lunch meat attributes by net consumption, any turkey or chicken, August 2019
Roast beef products primed for increased claims
Figure 41: Bacon and lunch meat attributes by net consumption, any roast beef, August 2019
TURF Analysis
Figure 42: TURF Analysis – Important attributes, July 2019
Figure 43: Bacon and lunch meat attributes, by age, August 2019
Parents more receptive to wellness claims
Figure 44: Bacon and lunch meat attributes, by parental status, August 2019
BACON AND LUNCH MEAT USAGE
Breaking from tradition
Breaking up with bread
Figure 45: Bacon and lunch meat occasions, August 2019
Unengaged consumers most strongly tied to conventional usage
Figure 46: Bacon and lunch meat occasions, parental status by gender, August 2019
Snacking an opportunity to expand consumption
Figure 47: Snacking frequency, January 2015 and November 2018
Figure 48: Share of snacking, by age, November 2018
BACON AND LUNCH MEAT ATTITUDES
Brand loyalty remains strong among heavy users
Figure 49: Bacon and lunch meat attitudes, August 2019
Figure 50: Repertoire bacon and lunch meat attitudes by consumption, I typically purchase the same brands, August 2019
Everyone can agree on convenience
Figure 51: Bacon and lunch meat attitudes by consumption, I buy them because they are convenient, August 2019
Women without children consuming less, likely due to health concerns
Figure 52: Bacon and lunch meat attitudes, parental status by gender, August 2019
INCREASED PURCHASE DRIVERS
Consumers satisfied with the status quo
Figure 53: Innovation to drive bacon and lunch meat purchase, August 2019
Quality and packaging go hand-in-hand
Figure 54: Innovation to drive bacon and lunch meat purchase, consumption repertoire, August 2019
Younger adults crave snack formatting
Figure 55: Innovation to drive bacon and lunch meat purchase, snack-sized packaging, August 2019
Older consumers hard to sway
Figure 56: Innovation to drive bacon and lunch meat purchase by age, none of the above, August 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Behavioral data
Food and Drink Segmentation
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET 
Figure 57: Total US retail sales and forecast of bacon and lunch meat, at inflation-adjusted prices, 2014-24
Figure 58: Total US retail sales and forecast of bacon and lunch meat, by segment, at current prices, 2014-24
Figure 59: Total US retail sales of bacon and lunch meat, by segment, at current prices, 2017 and 2019
Figure 60: Total US retail sales and forecast of refrigerated bacon, at inflation-adjusted prices, 2014-24
Figure 61: Total US retail sales and forecast of refrigerated lunch meat, at current prices, 2014-24
Figure 62: Total US retail sales and forecast of refrigerated lunch meat, at inflation-adjusted prices, 2014-24
Figure 63: Total US retail sales and forecast of shelf-stable lunch meats, at current prices, 2014-24
Figure 64: Total US retail sales and forecast of shelf-stable lunch meats, at inflation-adjusted prices, 2014-24
APPENDIX – RETAIL CHANNELS 
Figure 65: Total US retail sales of bacon and lunch meat, by channel, at current prices, 2014-19
Figure 66: Total US retail sales of bacon and lunch meat, by channel, at current prices, 2017 and 2019
Figure 67: US supermarket sales of bacon and lunch meat, at current prices, 2014-19
Figure 68: US sales of bacon and lunch meat through other retail channels, at current prices, 2014-19
APPENDIX – KEY PLAYERS 
Figure 69: Multi-outlet sales of bacon, by leading companies and brands, rolling 52 weeks 2018 and 2019
Figure 70: Multi-outlet sales of refrigerated lunch meat, by leading companies and brands, rolling 52 weeks 2018 and 2019
Figure 71: Multi-outlet sales of shelf-stable lunch meat, by leading companies and brands, rolling 52 weeks 2018 and 2019