(The views and opinions expressed in this blog are strictly those of the author.)
These days you can’t talk about meat without mentioning inflation — and many of those conversations center around consumers cutting back on meat.
So, what’s the cost to packer/processors who don’t maintain their share of consumers’ stomachs, hearts and wallets? The meat industry faced this dilemma at the onset of the pandemic — and now rising meat prices, labor shortages and supply chain issues have brought us to another crossroads.
In a blog I wrote during the early days of the pandemic, I cited World Advertising Research Center (WARC) research showing that “going dark” with your marketing efforts could have a huge impact on your mid- and long-term returns. This need to avoid going dark has only intensified with the rise in inflation.
Fueled in part by global unrest, inflation is now the sixth-most worrisome issue across 28 countries.1 And according to 2021 year-over-year USDA data, meat is the largest driver for food inflation: Beef and veal prices rose 9.6%; pork prices, 6.3%; and poultry prices, 5.6%.
Create value to combat rising prices
Even though shoppers are looking for bargains, discounting isn’t always the only answer. One of the key reasons why brands should focus on building value in tight financial times is that consumers often focus on the best value, not the lowest price.2
Here are a few ways to build value:
Raise the table stakes and stay in the game
According to the Kantar Millward Brown database, brands that cut their marketing budget by 50% or went dark for a year took three to five years to regain pre-recession levels. In the battle against rising meat prices, your marketing should create the kind of value that helps keep meat on the table. Leave the door open with consumers, because once that relationship is strained, the cost of re-establishing it can be tough to swallow.
Sources: 1What Worries the World Poll, Ipsos, February 2022.
2"In Cash-Strapped Times Brands Should Build Value, Not Discount Prices," WARC, February 2021.
3Steak and Burger Reference Reports, National Cattlemen’s Beef Association, 2021.
42022 Top Trends to Watch, Midan Marketing, January 2022.
5What We Know About Luxury Brands, WARC, December 2021.
6Anne-Marie Roerink, Principal, 210 Analytics LLC, The Power of Meat 2022: An In-Depth Look at Our World Through the Eyes of the Shopper; Report sponsored by Sealed Air Food Care Division/Cryovac® and published by Food Marketing Institute Foundation for Meat & Poultry Research & Education.
7In Brands We Trust? Edelman Trust Barometer Special Report, 2019.
8“Inflation Trade? Nestle Reaps Benefits From Higher Prices,” Reuters, October 2021.
9“Is Inflation Really This Bad, or Are Greedy Companies Profiting Off the Pandemic?” Fortune, February 2022.
3/23/2022