The consumer conundrum – Sink your teeth into a great steak, or grit your teeth about beef prices?

by John Lundeen, Senior Executive Director, Market Research – NCBA

Background

The checkoff-funded Consumer Beef Index (CBI) is a semi-annual online survey begun in 2007 which is designed to identify and track key consumer perceptions of beef and to spotlight key consumption trends.  The 11th wave of the survey was conducted in March 2012 with more than 1300 consumers. 

Introduction

The sample is national in scope, and is tested for balance with national demographic data, including gender, ethnicity, region of the country and age (ages 13 to 65 are included in the sample). A very small minority of consumers with absolutely no food decision-making authority, either at-home or in restaurants, are excluded. 

A series of questions are included, covering the following subjects:

• Weekly beef consumption, both in-home and in foodservice, and intent to purchase more, the same or less beef.  For those consuming less or more beef, the major reasons are noted. 
• Factors which are considered important in deciding whether to have beef, chicken, fish, pork or another main dish alternative for dinner.
• Performance of beef on these same factors, allowing for analysis on where beef stands relative to the factors that drive the dinner main course selection.
• Awareness of any negative news in the press.
• Rating of beef overall on a series of attitudinal measures, including whether beef is a first choice, among top choices, a frequent choice, or a rarely chosen option.  
• Impact of the economy, and rationing behaviors that are being used in a grocery store or at a restaurant. 
• Overall satisfaction with beef, measured based on whether consumers say the positives of beef strongly or somewhat outweigh the negatives, or whether the negatives of beef strongly or somewhat outweigh the positives.  

Discussion

Demand drivers
Value, safety, nutrition, taste/quality and convenience have all been shown to have an impact on beef demand.  The Consumer Beef Index provides a means to measure the direction and magnitude of any changes occurring to any of these macro variables. 

1. Price:  Let’s start with the bad news … value perceptions of beef.   Self-reported total servings of beef have declined from 2.3 times a week in February 2011 to 2.1 among the March, 2012 respondents.  Note that there was a similar decline for chicken, with both proteins losing approximately 20 percent of reported servings since the summer of 2007.  The impact of price is evidenced in other ways:
   Among the 18 percent of consumers noting they are decreasing their use of beef, price was the most often noted “extremely important reason” (Figure 1).
   Those reporting they eat beef 3+ times a week dropped from 40 percent of the sample to 34 percent.  Thus, even some of beef’s best consumers have throttled back on their beef consumption. 
2. Taste and quality:  Now, shifting to the good news.  The percent of consumers agreeing completely or somewhat that beef is “great tasting” is at an all-time spring season high for in-home consumption.   Likewise, beef is showing a spring season high, both in foodservice and for at-home consumption, in its ability to provide “good results consistently.”  Finally, among the 18 percent of consumers noting they have been eating more beef in the last six months, taste-related reasons are the most often provided explanations for the increase. (Figure 2).
3. Safety:  The percentage of consumers noting that beef “is extremely safe to eat” has been on a long upward trend. Note, however, that even though the industry is making progress on safety perceptions, there is still a negative gap between the industry’s “perceptions” and the importance that consumers place on this measure. 
4. Nutrition:  Although nutrition fell to No. 2 behind price as a rationale for eating less beef, nutrition is still an oft quoted reason to curtail beef consumption.  On a positive note, the industry is continuing to show statistically significant increases in several key nutritional top 2 box scores, including the following (increases noted are from January of 2007): (Figure 3)

Conclusions

Overall, most drivers of demand for beef are very strong. However, consumers have been hit with a double whammy in regards to prices. First, the recession created a consumer mindset favoring frugality. Now, with higher beef prices in the market for beef, and with continuing economic turmoil, consumers are discovering a second financial reason to moderate the frequency with which they consume beef.
Taking all of these shifts into consideration, overall consumer satisfaction with beef was static, with 75 percent of consumers noting that the positives of beef outweigh the negatives. (Figure 4).