Processed Pork

1
Processed Pork

• Provided by
• National Pork Board
• April 2005

2
The processed meats industry

• For over the past decade, sales for processed
  meats have increased nearly every year.
• Dips occurred in 1992 and 1998.
• Sales in the processed meat market are expected
  to slow down over the next decade, but the market
  should continue to grow.
• Between 2000 and 2010, sales of processed meats
  are expected to grow at an average annual rate of
  1.6.
• Sales by 2010 should total 32.5 billion.

Source The U.S. Processed Meat Industry,
Business Trends Analysts Inc.
3
In-home Consumption
4
Processed pork is consumed by 80 of all
individuals regularly Only 20-30 consume
processed poultry and beef
of Individuals Consuming In-Home in Two Weeks
Source The NPD Groups National Eating Trends
2004
5
Processed pork is served over twice a week, far
more often than other processed proteins
In-Home Eatings per Eater in Two Weeks
Source The NPD Groups National Eating Trends
2004
6
Processed pork accounts for over 80 of all pork
consumed in the home
Share of Total Pork Eatings
Includes entrée ham
Source The NPD Groups National Eating Trends
2004
7
Processed pork consumption has remained quite
stable in recent years
Processed In-Home Pork Annual Eatings Per Capita
Declines driven by ham lunchmeat and bacon.
Source The NPD Groups National Eating Trends
2004
8
Ham, bacon, and sausage account for almost
three-fourths of all processed pork eatings
of In-Home Processed Pork Eatings
Pork lunchmeat bologna, salami, luncheon loaf,
etc., excludes ham Ham lunchmeat 24 ham
entrée 10
Source The NPD Groups National Eating Trends
2004
9
Sausage consumption surpassed bacon ham
lunchmeat remains top processed product
Annual In-Home Pork Eatings Per Capita
Breakfast Sausage 4.8 Dinner Sausage
6.6 Remaindernot specified
Bologna, Salami, Luncheon Loaf, etc. excludes
ham
Source The NPD Groups National Eating Trends
2004
10
Processed pork consumed regularly by roughly
one-third of the population
Penetration of Individuals Consuming In-Home
in Two Weeks
Dinner 17 Breakfast 11 Bologna, Salami,
Luncheon Loaf, etc. excludes ham
Source The NPD Groups National Eating Trends
2004
11
Processed pork is consumed at all meals
of In-Home Pork Eatings
Source The NPD Groups National Eating Trends
2004
12
Meal occasion varies by product
of In-Home Processed Pork Eatings
Source The NPD Groups National Eating Trends
2004
13
Processed pork is more likely than fresh pork to
be used as an ingredient (i.e., in a sandwich)
of In-Home Pork Eatings
Source The NPD Groups National Eating Trends
2004
14
Usage of processed pork varies by product
of In-Home Processed Pork Eatings
Source The NPD Groups National Eating Trends
2004
15
Processed pork generally has no appliance use or
is prepared on the stove top
of In-Home Pork Eatings
Source The NPD Groups National Eating Trends
2004
16
Appliance usage varies by product
of In-Home Processed Pork Eatings

Source The NPD Groups National Eating Trends
2004
17
Demographic Profilesof In-home Processed Pork
Consumers
18
Males aged 45 (and females 65) consume
processed pork at the greatest rate
Total Processed Pork Eaten In-Home Annual
Eatings Per Capita
Females 18-34 lowest rate
Source The NPD Groups National Eating Trends
2004
19
Children have a strong influence on adults
consumption of hot dogs, bologna
Impact of Presence of Kids on Adults Consumption
of Processed Meats Annual In-Home Eatings Per
Capita Among Adults
Source The NPD Groups National Eating Trends
2004
20
Demographic profile ham entree eater
Demographic Skews Based on Eating (AEPC) Index
Source The NPD Groups National Eating Trends
2004
21
Demographic profile ham lunchmeat eater
Demographic Skews Based on Eating (AEPC) Index
Source The NPD Groups National Eating Trends
2004
22
Demographic profile hot dog eater
Demographic Skews Based on Eating (AEPC) Index
Source The NPD Groups National Eating Trends
2004
23
Demographic profile dinner sausage eater
Demographic Skews Based on Eating (AEPC) Index
Source The NPD Groups National Eating Trends
2004
24
Demographic profile breakfast sausage eater
Demographic Skews Based on Eating (AEPC) Index
Source The NPD Groups National Eating Trends
2004
25
Demographic profile bacon eater
Demographic Skews Based on Eating (AEPC) Index
Source The NPD Groups National Eating Trends
2004
26
The Processed Pork Industry
27
The breakfast meats category

• In 2004, the total breakfast meats category had
  volume sales of almost 450,000 tons, worth 3
  billion.
• Bacon consistently accounts for two-thirds of
  breakfast meat consumption, above sausage and
  ham.
• Almost 19 of bacon sold is private label,
  accounting for 63,305 tons (almost 400 million).
  This is larger than that of any single private
  brand within the category.

Source IRI 1999-2004
28
The breakfast meats category

• There was a surge in price for the breakfast
  meats category in both 2000 and 2003.
• In 2000
• Dollar sales of bacon increased 16.6 while
  volume sales actually decreased 4.9.
• Dollar sales of breakfast sausage/ham increased
  11.5, with a volume sales increase of only 1.2.
• In 2003
• Dollar sales of bacon increased 10.8 with a
  slight volume sales decrease.
• Breakfast sausage/ham sales increased by 6.2,
  while actual volume sales only increased by 3.7.

Source IRI 1999-2004
29
Top bacon brands

• Oscar Mayer (13)
• Hormel (includes Black Label and Range) (7)
• Bar S (includes Chuckwagon) (2.5)
• Farmland (includes Cider House) (2.4)
• Gwaltney (2.2)

Does not include private label at 13.2
Source IRI 2004, percent share of total
breakfast meats sold, based on value
30
Top breakfast sausage/ham brands

• Jimmy Dean (7.6)
• Bob Evans (4.1)
• Johnsonville (1.6)
• Tennessee Pride (1.5)
• Farmer John (1)

Does not include private label at 2.1
Source IRI 2004, percent share of total
breakfast meats sold, based on value
31
The luncheon meat category

• In 2004, the total luncheon meats category had
  volume sales of 474,078 tons, worth 3.4 billion,
  representing the largest processed meats
  category.
• The average price per volume was 3.57.
• Over 90 of luncheon meats sold are sliced (both
  volume and value).
• Over 13 of luncheon meat sold is private label.

Source IRI 2004
32
Top sliced luncheon meat brands

• Oscar Mayer (23.9)
• Hillshire Farms Deli Select (7.3)
• Buddig/Carl Buddig Premium Lean Slices (4.3)
• Land O Frost (includes Premium and Taste Escape
  lines) (3.8)
• Butterball (3.7) (all ConAgra brands-9.2)

Does not include private label at 13.1
Source IRI 2004, percent share of sliced and
non-sliced luncheon meats, based on value
33
The dinner sausage category

• In 2004, the total dinner sausage category had
  volume sales of 285,226 tons.
• Between the years 1999 2004, the value of the
  dinner sausage category rose almost 33, from a
  1.15 billion market in 1999 to 1.53 billion in
  2004.
• Over the same time period, volume of the category
  rose over 20.
• The current average price per volume for dinner
  sausage is 2.68.
• Private label dinner sausage accounts for 7.6 of
  that sold.

Source IRI 1999-2004
34
Top dinner sausage brands

• Hillshire Farm (excludes Kahns brand) (20.3)
• Johnsonville (includes all Johnsonville brands)
  (15.1)
• Eckrich (includes Smoky Links and Smoked
  Grillers) (8.3) (all ConAgra brands-11.4)
• Bryan Foods (includes Bryan Smoky Hollow) (2.6)
• Bar S Foods (1.9)

Does not include private label at 7.6
Source IRI 2004, based on value
35
Top hot dog brands

• Oscar Mayer (18.6)
• Ball Park (includes Ball Park Singles) 16.9
• Bar S (includes Bar S Tasty Dogs) 7.8
• Hebrew National 5.1 (all ConAgra brands-11.4)
• Nathans Famous (3.9)

Does not include private label at 6
In 2004, the total hot dogs category had volume
sales of 404,016 tons, worth 1.65 billion.
Source IRI 2004, based on value
36
The canned meats category

• In 2004, the total canned meats category had
  volume sales of 116,704 tons, worth 700 million,
  representing the smallest processed meats
  category.
• About 10 of canned meats sold are canned hams,
  and over half are categorized as meat/meat
  spreads.
• One in three canned meat dollars is spent on
  canned lunchmeats, representing almost 25 of the
  category volume.
• Hormel, including Spam brand, accounts for over
  60 of the canned lunchmeat brands sold.
• ConAgra (Swift Premium and Armour Star) and
  Hormel account for over 50 of the value of
  canned hams sold. Armour Star is also the
  leading brand of single-serve canned hams.

Source IRI 2004
37
The meat snacks category

• Meat snacks are more popular than ever for the
  busy American.
• Todays consumers often skip meals and use meat
  snacks to eat on-the-run.
• Consumers generally purchase meat snacks at
  convenient stores, where sometimes an entire
  section is dedicated to these products.
• The meat snack market has benefited from the
  increased interest in high-protein diets.
• Pork rinds are gaining popularity as a low-carb
  food option.
• Improved distribution has helped to increase
  sales, with meat snacks getting more exposure in
  both supermarkets and mass merchandise outlets.
• It is projected that meat snacks will grow at an
  annual rate of 9.6 between 2000 and 2010,
  reaching 3.0 billion by 2010.

Source The U.S. Processed Meat Industry,
Business Trends Analysts Inc.
38
New products in processed meats

• Introductions in the processed meat industry are
  often product line extensions, rather than
  entirely new products.
• New flavors (apple-smoked, hickory, etc.)
• Healthier product varieties (No artificial
  ingredients, Lower in fat, Natural, etc.)
• New formats (pre-cooked bacon, breakfast and
  dinner sausages, etc.)
• New convenience packaging attributes (cook in
  package, resealable, etc.)