Understanding Today’s Pork Demand Landscape

by Kevin Waetke

Checkoff repositions its marketing approach to reach a changing market

retail foodservice distribution graphic
A snapshot of how pork is sold shows that there cannot be a one-size-fits-all marketing approach. Extensive research is helping the Pork Checkoff reposition pork for a changing audience.

It’s no secret that the U.S. protein industry is in expansion mode. With pork production expected to be up more than 12 percent in 2017, Pork Checkoff staff and leadership spent the summer defining today’s pork demand “landscape.”

What motivates people to buy pork? What barriers are in play to prevent them from doing so? Step one is attaining more market intelligence through research.

“Previous Checkoff intelligence was an inch wide and a mile deep,” said Jarrod Sutton, vice president of domestic marketing. “That’s not enough today.”

He added, “We can no longer focus research on simple demographics. We need to fully understand what motivates people to purchase pork and share that with our retail and foodservice partners.”

In June, the Checkoff announced a marketing strategy shift from 30 years of business-to-consumer advertising to a business-to-business consulting model. This called for a foundation of research on the growing millennial and multicultural audiences, who share a drive to stay connected and to seek information through digital communications.

“Once initial research is complete, we will have an in-depth understanding of pork consumers and opportunities for growth,” said Patrick Fleming, director of market intelligence for the Checkoff.

“That means exploring demand for fresh and processed pork both at home and out-of-home,” Fleming said. “We will share insights with our packer, processor, retail and foodservice partners to inform and inspire their business strategies.”

How Is Pork Purchased?

Part of the demand landscape is understanding how pork is sold.

“Retail pork sales volume is about 70 percent fresh and 30 percent processed,” Fleming said. “Yet in foodservice – which for the first time surpassed retail pork sales by volume – it is the reverse, with 30 percent fresh and 70 percent processed.”

He added, “Clearly, there cannot be a one-size-fits-all marketing approach. Throw in growing exports, and the challenges are magnified.”
In the United States, millennials have surpassed baby boomers in both volume of purchases and cumulative buying power. This generational shift influences more than sales because millennials view their purchases as a reflection of their values, beliefs and behaviors.

“Millennials also have higher expectations about understanding where their food comes from and how it is grown and processed,” Sutton said. “Transparency, authenticity, health and the long-term sustainability of food production is key.”

Shifts in Marketing

The pork supply chain is now highly consolidated, with just seven major food companies influencing the distribution of 90 percent of the pork procured. Companies that a generation ago served as middlemen to the marketing process now have prominent brands and are much better positioned to directly connect with consumers and pork enthusiasts.

Start with What You Know (and What You Don’t)

“This fall, the Checkoff will select a strategic research partner to complete a comprehensive demand assessment,” Fleming said.“We need to know the who, what, where, when, why and how’ of pork consumption. Only then can we grow pork demand in the years ahead.”

Toward that end, the Domestic Marketing team work starts with a challenge to identify, define, and clarify the best pork target audiences for both in-home and out-of-home consumption. This also will entail identifying unique growth opportunities and ideal pork products for foodservice and retail, as well as providing new insights into messages that will make consumers more loyal to pork.

“We will only be successful if we provide our customers with a comprehensive, in-depth understanding of the pork consumer and opportunities for market growth,” said Sutton. “We cannot do it all at once, but there’s a lot of runway ahead. We can build long-term relationships by providing research that illuminates opportunities and guides strategies.”

How to Define the “Demandscape”

Pork has grown well beyond its former role as a generic commodity in need of marketing. With the diversity of cuts and sales opportunities in both retail (such as point-of-sale promotion) and foodservice (such as a featured menu item), reshaping the marketing strategy has never been more critical. But where do you begin? The following rules of the road are guiding the Pork Checkoff down its new path:Provide perspective. The Checkoff must identify how food industry trends impact pork demand by balancing questions specific to pork with questions about the larger market context and priorities. How do shoppers choose pork from other competing proteins? How is e-commerce changing grocery-buying habits? What about the emerging role of meal kits?

Be credible. Pork producers must demonstrate sound production practices and be transparent. Research results may reveal good, as well as bad, news for pork in the context of market trends and consumer preferences.

Mine new data for insight. The Checkoff needs to understand pork’s stakeholder targets and priorities. For example, many retail and foodservice partners may wish to identify their own audience segments within the dataset.

Come at it from many angles.
Different points of view include:
By product – Understand differences between demand for fresh vs. processed pork and between sub-categories, such as ribs vs. chops and sausage vs. bacon.
By use – Understand when and why consumers choose pork. Compare breakfast-on-the-run, special-occasion dining, cooking for the family, outdoor parties and snacking.
By audience segment – Understand both demographic and psychographic groups, such as occasional pork buyers, restaurant-only buyers, Hispanics with varying degrees of acculturation, lower income consumers and millennials.

Correlate the data. The Checkoff must provide insight on connections between and among pork consumer values, preferences, perceptions and consumption behavior.

Qualitative and quantitative input. Exploratory opinion research will delve into consumer trends and perceptions. The Checkoff needs to apply subjective information to ensure trends are accurately reflected in future quantitative studies.

Actionable audience segmentation. Research will clearly define audience segments that allow the Checkoff’s partners to see market growth opportunities that match demand with available product.

Top 10 Food Trends

Many of today’s food trends involve the expectation of simplicity, authenticity, transparency and personalization. Here are top trends identified by the Pork Checkoff that impact the pork industry.

  1. An experience that matters. Food values have evolved from “food as fuel” to “food as an experience.”
  2. Societal wellness. A new food culture connects consumer demand to ethical, responsible, values-driven food production.
  3. Transparency. There has been an ongoing evolution of thought from “What’s in it?” to “Where is it from?” to “How were people and animals treated?” to “How and why is it packaged?” To meet this need, farmers willing to share their on-farm story can become the next celebrity chefs and rock stars.
  4. Supply chain needs. There has been a 72 percent increase in environment-related claims and a 45 percent increase in animal welfare claims from 2011 to 2015. The demand for total transparency incorporates the entire food chain.
  5. Changing nutrition priorities. From avoiding “bad” food to adding “good” food choices to eating food as it “was meant to be,” today’s consumers seek clean, simple, “real” food.
  6. Replacing red meat. Plant proteins and meat alternatives are being used to attempt to replace red meat.
  7. Personalization. Consumers are following a wide variety of diets that they feel meet their individual needs.
  8. Fast-paced consumer lifestyles. The demand for smaller meals, more snacks and on-the-go options is growing.
  9. Millennial influence over Baby Boomer eating habits. Historically, the most likely pork consumers are the aging Baby Boomer generation. But Boomers now look more like millennials in their purchase and consumption habits.
  10. Niche industry growth. Call it entitlement, but consumers want what they want, when they want it – more retail stores, more fine dining and more fast-dining options.