It’s likely that the average consumer doesn’t give much thought to their everyday lunchtime sandwich or the deli tray at summertime barbecues. Not to be overlooked, however, the meat department and the deli counter are major staples for U.S. consumers, as they represent a $9 billion industry in the U.S. Despite the weight of the meat department, competition is rising—both from outside the store and from the deli counter across the aisle.
In looking at trends over the past year, lunch meat sales have dipped, even with declining in-store retail prices (-2.5% overall). The upside, however, is that sales of lunch meat offerings from the deli department, which account for more than half ($5 billion) of industry sales, have increased, rising 1.2% year-over-year.
So what’s causing the shift? Consumers are changing the way they shop, and modern purchase behaviors are affecting performance across the category. Deli lunch meats remain household staples, as 93.9% of households buy them, compared with 82.2% that buy packaged lunch meats. As consumer shopping preferences evolve lunch meat sales trends are shifting and changing the definition of your typical lunchtime meal and the meat staples generally used to complete it.
While consumers still enjoy traditional lunch meat varieties for their sandwiches, many are less-traditional selections that are, perhaps, a cut above what they’ve eaten in the past. Notably, specialty deli meats are leading growth across multiple meat types, with overall dollar sales increasing by more than 3% in the year ended Feb. 25, 2017. From a growth standpoint, chorizo reigns supreme, with dollar and volume sales increasing more than 15% and 16%, respectively; however, all top-selling varieties are showing performance growth.
But for some consumers, sandwich trays are just too passé. For them homemade charcuterie boards, which feature uniquely prepared meats (think terrines, galantines, ballotines, pâtés) and cheeses all the rage. And as a result, sales across specialty meat and cheese products are on the rise. The prosciutto and mozzarella combination maintains the largest share of the specialty meat/cheese category (34.3%). However, mozzarella, basil and prosciutto hors d'oeuvres with its combination of salty, creamy and aromatic flavors is quickly becoming a consumer favorite with dollar sales increasing by more than 76%.
As lunch meat continues to face increased pressures from both inside and outside of the grocery store, it's important ensure the right variety of products are available across all types of consumers. Retailers and manufacturers that provide innovative meat snacking options with enhanced flavor profiles to keep consumers interested will benefit from evolving with the consumer.