While increased cost-of-living concerns have resulted in growth of the value tier, there are still signs that when consumers can treat in-home, potentially replicating out-of-home meals, they do, presenting an opportunity for some premium meat products.
According to research by AHDB, nearly three in five consumers whose household finances have worsened claim they are going to spend less on eating-out.
Despite this, consumers are still looking to treat themselves, with 55% of shoppers agreeing they would be willing to pay extra for better quality meat (AHDB/YouGov Tracker, May 23), despite the current economic challenges.
This is known as the ‘Lipstick Effect’, the theory that when faced with an economic crisis, consumers will be more willing to buy affordable treats and/or indulge in guilty pleasures, albeit less often.
Kim Heath, AHDB Senior Retail Insight Manager, said: “When treating OOH, we know consumers favour meat-based dishes such as lamb, steaks, and burgers, and what is evident in recent demand data is that some of these areas are actually seeing some positive trade up within retail, bucking the overall grocery and total meat, fish and poultry (MFP) trend.”
Within beef, steaks overall are seeing volume declines of -7.3%, driven by all steak cuts. However, when delving deeper into the data we can see that among the cheapest steak cut, rump (average price of £15.40 per kg versus total steaks at £16.37 per kg), the premium tier has grown by 0.2%, stealing 0.5% share of the rump category.
Some shoppers who have in the past purchased standard sirloin steaks and premium fillet steaks, both higher cost, are now buying premium rump steaks instead. Therefore, among some consumers, buying premium, but cheaper, steak cuts are a way to save money and not leave the category.
Within pork, premium tier growth is seen in several areas, specifically shoulder roasting, chops, belly, and mince. Premium pork cuts may therefore offer an opportunity for those who feel the need to trade down protein to save money but still want to deliver a treaty meal opportunity.
Within beef, pork and lamb, a positive trend is seen for premium added value offerings. In the sous vide category, the premium beef tier has seen volume growth of 17.9%, pork 63.7% and lamb 12.0% (Kantar, 12 w/e 14 May 23), with direct switching seen from the standard tier.
And within lamb premium tier growth of 37.4% is also seen for marinades, stealing just over 7% volume share of the lamb marinade category.
Kim added: “While current financial difficulties favour the lower priced tiers, the ‘Lipstick Effect’ still provides opportunities for treating meals. Capitalising on these occasions is vital, with treaty red meat meal inspiration and reassurance around premium quality meat at point of purchase.”