The (Lunch) Meat of the Matter: Lunchtime Opportunity in the U.S.

The (Lunch) Meat of the Matter: Lunchtime Opportunity in the U.S.

While breakfast may have earned the moniker of “the most important meal of the day,” lunch is a key meal for today’s busy consumers to keep their blood sugar up throughout the day. And with lunch meat a convenient source of protein, whether it’s eaten on a sandwich, in a salad or on its own, it should be a lunchtime staple.

However, this $9 billion industry in the U.S., is showing signs of struggle, as both dollar and volume sales for the category overall have declined year-over-year. Retailers and manufacturers have the opportunity to reinvigorate this category by tapping into key consumer trends occurring across the store and understanding the lunch meat shopper at a deeper level, including their preference for deli or packaged meats.

Protein Powered Growth

For retailers and manufacturers looking to reinvigorate the lunch meat category, connecting to other growing parts of the store, specifically fresh departments, could be a key opportunity. In a relatively flat U.S. FMCG market, fresh foods have driven almost $1.5 billion in sales gains over the past year. While deli lunch meat can be found in the same basket as other fresh categories that are growing, such as cheese, lettuce/carrots and bakery bread, packaged lunch meats are associated with center store areas that are struggling. Packaged brands that can highlight fresh attributes and build new partnerships with other fresh categories could help build overall sales.

Consumers’ focus on fresh is related to an increased desire for health and wellness overall, and lunch time is no exception. Health claims, such as antibiotic free and all natural, drove volume sales last year, but these claims remain a small percentage of the overall category. Communicating important health and wellness claims that resonate with shoppers could help brands and retailers find growth in this struggling market.

While today’s consumers are increasingly focused on fresh foods and healthier options, they’re also looking for convenience across categories and channels due to busy lifestyles. In the lunch meat category, grab ‘n go is on the rise, driving 11% of total deli bulk meat dollar sales.

Currently, 88% of grab ‘n go dollars are driven by the top five brands. But it’s private label that holds the largest share and saw sales rise even higher year-over-year. Private label is disrupting categories across the store and around the globe, and lunch meat is also being affected. Private label has a much bigger presence in deli lunch meat, but its share is gaining among packaged meats as well. Understanding what’s driving shoppers to buy both deli and packaged meats can help manufacturers and retailers navigate this changing landscape.

Deli vs. Packaged: The High-Noon Showdown

More than half of all lunch meat shoppers (52%) are “package-heavy” buyers, meaning they spend at least 70% of their category dollars on packaged lunch meats. Comparatively, 29% are “deli-heavy” buyers, spending at least the same share of their dollars at the deli counter. Despite being smaller in manpower, deli-heavy buyers account for a greater proportion of dollars than packaged-heavy buyers.

To engage both of these shopper groups and drive growth across the category, retailers and manufacturers need to understand what’s driving them to buy. For both deli and packaged shoppers, meat type, flavor, price and size rank as the most important attributes all lunch meat shoppers consider. Beyond these utilitarian considerations, customizability and flavor are more important in the service deli while price and packaging considerations are more important in packaged. Therefore, messaging in the deli should center around quality and customizability, while packaged products need to be meticulous around price.

By understanding what motivates lunch meat buyers—whether they prefer deli or packaged—marketers have the opportunity to tailor their promotions against those factors. Combining those promotions with changes to the category based on trends from across the store could put this protein back on the lunch menu.


The insights in this article were derived from:

  • Nielsen FreshFacts® Total U.S., 52 weeks ending Jan. 27, 2018
  • Nielsen Homescan Panel, 52 weeks of data ending Dec. 23, 2017
  • Nielsen Homescan Panel Survey, fielded Q1 2018