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Meat alternatives see sales gains but lose share

Despite robust sales gains, meat alternative dollar sales were a fraction of meat department sales.

Meat department sales have soared as consumers have scrambled to secure protein since the emergence of COVID-19 in the U.S. Prior to the pandemic, plant-based meat alternatives were growing in popularity and sales, but the pandemic upset many consumer buying patterns and behaviors, begging the question of how plant-based meat alternatives fared over the past 11 weeks. IRI and 210 Analytics partnered to understand the effect for frozen and fresh meat alternatives in dollars and volume sold throughout the pandemic.

What they found was that, like meat, sales of meat alternatives (fresh plus frozen) saw tremendous gains throughout March, April and the first two weeks of May. Sales gains versus the same weeks in 2019 have been in the double-digits for 11 weeks running. Year-over-year sales gains peaked during the first of the two panic buying weeks, with an increase of 157.8% versus the same week in 2019. Since then, there have been small fluctuations, but sales gains have been around 70% ever since the last week of March.

Volume sales have had a strong performance as well, with gains peaking in the second of the two panic weeks, up 144.3% versus the same week in 2019. Volume sales gains have trailed dollar gains since the onset of COVID-19, and the gap has widened in recent weeks. For the week ending May 10, the volume versus dollar gain gap stood at 13.2%, which the two firms said signals inflationary pressure.

“Meat and meat alternative sales growth patterns over the past two months look very similar, with gains in plant-based meat alternatives exceeding those of the meat department each week. However, to fully understand the story behind the percentages, it is crucially important to look at the size of the market,” the firms reported.

Meat versus meat alternative sales

Despite robust sales gains each week, the firms noted that meat alternative dollar sales were a fraction of meat department sales, meaning percentage gains were based on very different sales numbers and reflect very different absolute dollar gains. They reported that since the onset of the pandemic-related changes in grocery patterns, the meat department has seen an additional $5.0 billion in sales, versus an additional $100.3 million for plant-based meat alternatives.

As a percentage of the total (meat department plus plant-based meat alternative sales), the share for plant-based alternatives stood at 1.50% during March 1. Because of the absolute gains in meat dollars, the market share for plant-based alternatives has since dropped to a low of 1.18% during the week of April 12 and stood at 1.27% for the week ending May 10.

The volume share for meat alternatives shows a similar pattern. Despite percentage gains being higher, the absolute gains in pounds for meat versus meat alternatives caused the share to drop during the pandemic. Meat alternatives presented 0.82% of total sales in the first week of March and dropped to a low of 0.59% in the week of April 12. The share for the week of May 10 stood at 0.70%.

Assortment stayed stable

While tightness in the meat supply created availability issues, 210 Analytics and IRI pointed out that meat alternative assortment stayed very stable throughout the pandemic.

During the first week of March, plant-based meat alternatives represented 9.9% of the total number of items (combined average counts for meat and meat alternatives per store selling) while representing 1.5% of sales. During the week ending May 10, plant-based alternatives represented 10.8% of the total number of items while representing 1.27% of sales. 

Coming weeks critical

According to the firms, the past nine weeks have shown tremendous strength for plant-based meat alternative sales, even as share versus meat dropped slightly. However, they noted that the next two weeks will be critical in the process of establishing what the next several months will look like.

“Nearly all U.S. states have started to partially reopen or have plans to do so," the firms said. "The relaxation of these stay-at-home executive orders looks different from state to state and encompasses everything from the partial reopening of dine-in restaurants to the opening of hair salons and gyms to merely shifting from 'stay at home' to safer at home.' As states begin to enter their various reopening phases, the economic and social readiness of consumers to re-engage with foodservice will become clearer.”

For the foreseeable future, however, the firms said grocery retailing will continue to capture an above-average share of the food dollar.

TAGS: Business
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