The U.S. Market for Refrigerated Processed Meats - Volume I: Market Overview

Apr 1, 2002
238 Pages - Pub ID: LA747857
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  1. Executive overview
    Scope and Methodology
    • Market Parameters
    • Report Methodology

    Market Overview
    • Convenience Meat Basics
    • The Packaging Challenge
    • Government Regulators and Product Safety
    • "Zero-Tolerance" Policy for Ready-to-Eat Meats
    • Irradiation and Food Safety Technologies
    • Refrigerated Processed Meats Market Expected to Top $17 Billion in 2006
    • Table 1-1: U.S. Retail Sales of Refrigerated Processed Meats by Product Category, 1997-2006 (dollars): Lunchmeats/Lunch Kits, Frankfurters/Dinner Sausage, Breakfast Meats, Convenience Meats
    • Supermarkets Account for 80% of Total Retail Sales
    • Factors to Market Growth
    • Convenience Meats Take Off
    • Dinner Sausage Sales Boost Overall Market
    • Consumers Demand Tasty, High-Quality Products
    • Convenient Products Appeal to Busy Consumers
    • Heavy Advertising
    • Three Classes of Marketers
    • Kraft on Top
    • Figure 1-1: Marketer Shares of U.S. Supermarket Sales of Refrigerated Processed Meats, 2001 (percent): 6 Marketers, Private Label, All Others
    • Smaller Marketers Grow Through Acquisition
    • Integrated Campaigns Capitalize on Brand Strengths
    • Marketing and New Product Trends
    • Ad Expenditures at $185 Million in 2000
    • Grocery Stores Account for Lion's Share of Retail Sales
    • Consumer Overview
    • Children and Processed Meats

    Category Focus: Lunchmeats and Lunch Kits
    • Market Nears $5 Billion in 2001
    • Lunchmeats Make Up Larger Category
    • Billion-Dollar Food Companies in Control
    • 92 Million Households Use Cold Cuts

    Category Focus: Frankfurters and Dinner Sausage
    • Market at $4 Billion in 2001
    • Frankfurters Make Up Larger Category
    • Billion-Dollar Food Companies Top the List
    • 84 Million Households Use Frankfurters

    Category Focus: Breakfast Meats
    • Market Nears $3.5 Billion in 2001
    • Bacon Makes Up Larger Category
    • Large Food Companies Dominate the Market
    • 83 Million Households Use Bacon
  2. The Products
    Product Overview
    • Scope of Report: Four Product Categories
    • Lunchmeat Basics
    • How Lunchmeats Are Made
    • Lunchmeat Packaging
    • Lunch Kits
    • Lunch Kit Packaging
    • Frankfurter Basics
    • Sausage Basics
    • How Sausage Is Made
    • Frankfurter and Dinner Sausage Packaging
    • Dinner vs. Breakfast Sausage
    • Bacon Basics
    • How Bacon Is Made
    • Bacon Packaging
    • Breakfast Sausage Packaging
    • Convenience Meat Basics
    • Convenience Meat Packaging
    • The Packaging Challenge
    • The Case-Ready Revolution

    Market Regulation and Product Safety
    • Regulatory Overview
    • Nutritional Labeling and Education Act Requirements
    • NLEA Definitions
    • URMIS and the Labeling of Fresh Cuts
    • The Implementation of HACCP
    • The Safe Handling Rule
    • The Role of Food Recalls
    • Public Issues in Meat Safety
    • "Zero-Tolerance" Policy for Ready-to-Eat Meats
    • January 2002 GAO Report on BSE
    • The FDA and the Irradiation of Meat Products
    • Other Emerging Food Safety Technologies
    • Debate Over Antibiotics and Fluoroquinolones
  3. The market
    • Figure 3-1: Estimated U.S. Retail Sales of Refrigerated Processed Meats, 1997-2001 (dollars)
    • Figure 3-2: Estimated U.S. Retail Sales of Refrigerated Processed Meats by Product Category, 1997-2001 (dollars): Lunchmeats/Lunch Kits, Frankfurters/Dinner Sausage, Breakfast Meats, Convenience Meats

    Market Size and Growth
    • Refrigerated Processed Meats Market Approaches $14 Billion
    • Table 3-1: U.S. Retail Sales of Refrigerated Processed Meats, 1997-2001 (dollars)
    • Lunchmeats and Lunch Kits Market Nears $5 Billion in 2001
    • Table 3-2: U.S. Retail Sales of Lunchmeats and Lunch Kits, 1997-2001 (dollars)
    • Frankfurters and Dinner Sausage Market at $4 Billion in 2001
    • Table 3-3: U.S. Retail Sales of Frankfurters and Dinner Sausage, 1997-2001 (dollars)
    • Breakfast Meats Market at $3.5 Billion in 2001
    • Table 3-4: U.S. Retail Sales of Breakfast Meats, 1997-2001 (dollars)
    • Convenience Meat Sales Hit $1.4 Billion in 2001
    • Table 3-5: U.S. Retail Sales of Convenience Meats, 1997-2001 (dollars)
    • Lunchmeats and Lunch Kits Account for 35% of Market
    • Table 3-6: Share of U. S. Retail Sales of Refrigerated Processed Meats by Product Category, 1997 vs. 2001 (percent): Lunchmeats/Lunch Kits, Frankfurters/Dinner Sausage, Breakfast Meats, Convenience Meats
    • Figure 3-3: Share of U.S. Refrigerated Processed Meats Market by Product Category, 2001 (percent): Lunchmeats/Lunch Kits, Frankfurters/Dinner Sausage, Breakfast Meats, Convenience Meats
    • Almost 90% of U.S. Households Use Lunchmeats
    • Table 3-7: Overview of Meat Product Usage, 2001 (percent): 5 Classifications
    • Supermarkets Account for 80% of Total Retail Sales
    • Figure 3-4: Share of U.S. Refrigerated Processed Meat Sales by Retail Outlet, 2001 (percent): Supermarkets, Other Grocery/Food Stores, Other
    • Supermarket Sales Approach $10 Billion in 2001
    • Table 3-8: U.S. Supermarket Sales of Refrigerated Processed Meats, 1997-2001 (dollars)
    • Lunchmeats and Lunch Kits Account for 40% of Supermarket Sales
    • Table 3-9: Share of U. S. Supermarket Sales of Refrigerated Processed Meats by Product Category, 1997 vs. 2001 (percent): Lunchmeats/Lunch Kits, Frankfurters/Dinner Sausage, Breakfast Meats
    • Figure 3-5: Share of U.S. Supermarket Sales of Refrigerated Processed Meats by Product Category, 2001 (percent): Lunchmeats/Lunch Kits, Frankfurters/Dinner Sausage, Breakfast Meats
    • Use Highest in the South
    • Table 3-10: Selected Meat Products: Consumer Usage Indices by Region, 2001 (index): 5 Classifications

    Factors to Market Growth
    • Convenience Meats Category Takes Off
    • Dinner Sausage Sales Also Boost Overall Market
    • Consumers Demand Tasty, High-Quality Products
    • Convenient Products Appeal to Busy Consumers
    • Refrigerated Processed Meat Products Receive Heavy Advertising
    • Figure 3-6: Projected U.S. Retail Sales of Refrigerated Processed Meats, 2001-2006 (dollars)
    • Figure 3-7: Projected U.S. Retail Sales of Refrigerated Processed Meats by Product Category, 2001-2006 (dollars): Lunchmeats/Lunch Kits, Frankfurters/Dinner Sausage, Breakfast Meats, Convenience Meats

    Projected Market Growth
    • Sales Hit $17 Billion in 2006
    • Table 3-11: Projected U.S. Retail Sales of Refrigerated Processed Meats, 2001-2006 (dollars)
    • Lunchmeat and Lunch Kit Sales to Reach $5.8 Billion in 2006
    • Table 3-12: Projected U.S. Retail Sales of Lunchmeats and Lunch Kits, 2001-2006 (dollars)
    • Frankfurter and Dinner Sausage Sales to Reach $5 Billion in 2006
    • Table 3-13: Projected U.S. Retail Sales of Frankfurters and Dinner Sausage, 2001-2006 (dollars)
    • Breakfast Meat Sales to Reach $4.4 Billion in 2006
    • Table 3-14: Projected U.S. Retail Sales of Breakfast Meats, 2001-2006 (dollars)
    • Convenience Meat Sales Exceed $2 Billion in 2006
    • Table 3-15: Projected U.S. Retail Sales of Convenience Meats, 2001-2006 (dollars)
  4. The marketers
    The Marketers
    • Hundreds of Marketers
    • Table 4-1: U.S. Market for Refrigerated Processed Meats: Selected Marketers and Brands

    Marketer and Brand Shares
    • Methodology for Market Share Estimates
    • Kraft Controls One-Fourth of Mass-Market
    • Sara Lee Places Second
    • ConAgra Captures Third Place
    • Smithfield and Hormel Tie for Fourth Place
    • Bar-S Ranks Sixth
    • Three Marketers Earn a 2% Share Each
    • Four Marketers Earn a 1% Share Each
    • Figure 4-1: Marketer Shares of U.S. Supermarket Sales of Refrigerated Processed Meats, 2001 (percent): 6 Marketers, Private Label, All Others
    • Private Label Controls 11% of Supermarket Sales
    • Oscar Mayer Is #1 Brand of Refrigerated Processed Meat
    • Figure 4-2: Brand Shares of U.S. Supermarket Sales of Refrigerated Processed Meats, 2001 (percent): 6 Brands, Private Label, All Others
    • Table 4-2: Marketer/Brand Shares of U.S. Supermarket Sales of Refrigerated Processed Meats, 1999-2001 (percent): 13 Marketers/23 Brands, Private Label, All Others
    • Table 4-3: Brand Shares of U.S. Supermarket Sales of Refrigerated Processed Meats, 1999-2001 (percent): 10 Brands, Private Label, All Others

    Competitive Overview
    • Billion-Dollar Food Companies Control Meat Products Market
    • Smaller Marketers Grow Through Acquisition
    • Marketers Offer Convenient Products
    • Marketers Heavily Promote Their Products

    Competitive Profile: Bar-S Foods Co.
    • Largest U.S. Jumbo Franks Processor
    • Bar-S Is #3 Brand of Frankfurters
    • Bar-S Favors Internal Growth Over Acquisition
    • Food Safety Is #1 at Bar-S
    • Better Barbeque Meal Solutions Debuts in 2000

    Competitive Profile: Bob Evans Farms, Inc.
    • 2001 Sales Exceed $1 Billion
    • #2 Marketer of Breakfast Sausage
    • Bob Evans Builds New Distribution Center

    Competitive Profile: ConAgra Foods, Inc.
    • #1 U.S. Meat Processor
    • ConAgra to Concentrates on Its Foods Business
    • ConAgra Lunchmeats Provide "Deli Experience"
    • ConAgra Revives Ailing Healthy Choice Line
    • Lunch Makers Is #2 Brand of Lunch Kit
    • Successful Baseball Tie-In for Armour Hot Dogs
    • Hebrew National Hot Dogs Appeal to Discriminating Consumers
    • ConAgra Fields "Guaranteed Tender" Entries
    • KC Masterpiece BBQ
    • A Major Player in the Convenience Meats Category
    • ConAgra Beef and Pork Operations on the Block?

    Competitive Profile: Farmland Industries, Inc.
    • #1 U.S. Agricultural Cooperative
    • Farmland Focuses on Case-Ready Market
    • Ribbits Barbecue Pork Tips Debut in August 2001
    • Farmland Extra Tender Fresh Pork Debuts in June 2001
    • Convenience Ground Beef Product Debuts in May 2001
    • Family Entrees Target Families of Four
    • Food-Safety Partnership with DMV

    Competitive Profile: Hormel Foods Corp.
    • #1 U.S. Turkey Processor
    • Hormel Acquires The Turkey Store in 2001
    • Jennie-O Foods Aims to Boost U.S. Turkey Consumption
    • Hormel Adheres to Six-Point Strategic Plan
    • "Today's Flavor" Campaign Debuts in April 2001
    • Hormel Cracker Add-Ons Target Adult Snackers
    • Hormel's Black Label Is #2 Brand of Bacon
    • Hormel Leads Branded Convenience Meats Category
    • Always Tender Line Consists of Juicy Pork Products
    • Hormel Fully Cooked Entrees

    Competitive Profile: Johnsonville Sausage Co.
    • #1 U.S. Marketer of Fresh Sausage
    • A Family-Owned Business
    • #2 in Dinner Sausage Market
    • Bratwurst Is Johnsonville's Specialty
    • Official Bratwurst of Lambeau Field
    • #4 Brand of Breakfast Sausage

    Competitive Profile: Kraft Foods, Inc.
    • #1 U.S. Food Company
    • Spun Off by Philip Morris in 2001
    • Oscar Mayer Is Ninth-Largest Meat Processor
    • Kraft Capitalizes on Deli Trend
    • Oscar Mayer Launches Ham Advertising Campaign in 2000
    • #1 in the Lunch Kits Market
    • Kraft Successfully Extends Lunchables Line
    • Lunchables Raises Nutritional Concerns
    • Lunchables Internet Promotion Targets Children
    • Oscar Mayer Develops Optiform Listeria Control Model
    • Louis Rich Carving Board Is Kraft's Convenience Brand
    • Louis Rich Carving Board Now Offers Beef

    Competitive Profile: Sara Lee Corp.
    • Diversified Company Enjoys Sales of $18 Billion in 2001
    • Sara Lee Acquires FHS in 2001
    • Sara Promotes Lunchmeats in Supermarket Deli Departments
    • Bryan Foods Introduces Classic Deli Lunchmeat Line
    • New Ball Park Varieties Appeal to Kids and Kosher Aficionados
    • Ball Park Targets Hispanics in 2000
    • Hillshire Farm Is #1 Dinner Sausage
    • Integrated Marketing Campaign Debuts for Hillshire Farm
    • Jimmy Dean Also Banks on Integrated Marketing Campaign
    • Jimmy Dean Is #1 Brand of Breakfast Sausage/Ham
    • Jimmy Dean Launches Dinner Sausage
    • Sara Lee Buys Share of Johnsonville Sausage in 2000
    • Sara Lee Fields Bryan Convenience Meats

    Competitive Profiles: Smithfield Foods, Inc.
    • #1 Hog Producer
    • Aggressive Acquisitions Strategy Characterizes Smithfield
    • Smithfield Expands into Beef Industry
    • Smithfield Actively Pursues "Case-Ready" Agenda
    • Lean Generation Line Competes in Heat-and-Serve Segment
    • John Morrell Fields Wide Range of Convenience Products
    • Smithfield Foods Wants Brand-Name Recognition for Its Products
    • Smithfield Faces Local Friends and National Foes

    Competitive Profile: Tyson Foods, Inc.
    • World's #1 Meat Processor
    • Tyson's IBP Subsidiary Is World's #1 Fresh Beef Producer
    • IBP's Foodbrands Division Fields Convenience Products
    • IBP Acquisition Allows Tyson Foods to Grow
    • Thomas E. Wilson Poised to Become Leading Convenience Meat Brand
    • Beyond Case-Ready
    • New Thomas E. Wilson Heat-and-Serve Entrees
    • IBP Pays EPA Penalties in 2001
  5. Marketing and Retail Trends
    Marketing and New Product Trends
    • Premium Lunchmeats
    • Dinner Sausage Line Extensions
    • Gourmet, Ethnic, and Poultry Dinner Sausages
    • Precooked Bacon
    • Flavored Breakfast Sausages
    • Pre-Marinated Meat Products
    • Heat-and-Serve Entrees
    • Heat-and-Serve Barbecue
    • Table 5-1: U.S. Market for Refrigerated Processed Meats: Selected New Product Introductions, 2000-January 2002

    Advertising Expenditures
    • Ad Expenditures at $185 Million in 2000
    • First-Place Sara Lee Foods Spends $50 Million
    • Kraft Foods Places Second with $33 Million
    • Third-Place Hormel Spends $24 Million
    • Two Poultry Producers Place Fourth and Fifth
    • ConAgra Spends $13 Million
    • Six Marketers Spend Approximately $3 Million-$8 Million

    Advertising Positioning
    • Integrated Campaigns Capitalize on Brand Strengths
    • Individual Promotions for Line Extensions
    • Summertime Is Grilltime
    • Tailgating and Halloween
    • Back-to-School Campaigns
    • Sports Links
    • Breakfast Meat Marketers Stress Versatility
    • Joint Promotions
    • Speed and Ease Figure Prominently in Convenience Meat Ads

    Consumer Promotions
    • Coupons
    • Sweepstakes and Gift Offers
    • Recipes and In-Store Sampling
    • Corporate Citizenship
    • Examples of Consumer Promotions

    At the Retail Level
    • Grocery Stores Account for Lion's Share of Retail Sales
    • Supermarket Display of Refrigerated Processed Meat Products
    • Supermarket Display of Convenience Meats
    • Supermarket Selection Proliferates
    • Premium Products Available Through Catalog and Internet
  6. The Consumer
    Overview of Consumer Demographics
    • The Simmons Survey System
    • 87% of Households Use Cold Cuts
    • Penetration Rates in the 70s for Frankfurters and Sausage
    • Household Levels of Heavy Usage
    • Children and Processed Meats
    • A Blue-Collar Streak
    • Minorities as Prime Consumers
    • Favorites Are All-Beef Frankfurters and Ham Cold Cuts
    • Upscale and Student Consumers for Turkey Cuts
    • Table 6-1: Overview of Meat Product Usage, 2001 (percent): 31 Classifications
    • Table 6-2: Usage Levels for Selected Processed Meat Segments, 2001 (percent): 9 Classifications
    • Table 6-3: Household Usage Levels for Selected Processed Meat Segments, 2001 (percent): 12 Classifications
    • Table 6-4: Top Demographics for Heavy Use of Processed Meats, 2001 (percent): 30 Classifications
    • Table 6-5: Consumer Preferences by Variety of Meat: Selected Processed Meat Segments, 2001 (percent): 12 Segments
    • Table 6-6: Top Demographics for Processed Meats: By Variety of Meat, 2001 (percent): 26 Classifications

    Overview of Brand Demographics
    • 27% of Households Use Oscar Mayer Cold Cuts, Ball Park Frankfurters
    • Patterns and Variations
    • Table 6-7: Consumer Preferences by Brand: Selected Processed Meat Segments, 2001 (percent): 39 Classifications
    • Table 6-8: Prime Demographics for Use of Processed Meats: By Brand, 2001 (percent): 31 Classifications

    Appendix I: examples of consumer advertising and promotions
    Appendix II addresses of selected marketers
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