Online meat retailers like Tyson Fresh Meats hopped onto the meat eCommerce bandwagon during the pandemic. They observed that 23% of their customers were likely to continue shopping online after the lockdowns. So they moved to enable online meat sales.
If you’re in the same boat as Tyson, do note this meaty news!
Shoppers are no longer buying their meat through brick-and-mortar grocers and retailers alone.
30% of all meat eaters find it easier to purchase most of their meat online. Are you into meat retail and sticking to in-store sales? You risk losing a chunk of your top-of-funnel share.
So what changes did meat retailers like Tyson need to make, to optimize their eCommerce strategy?
In this post, we cover:
- Meat eCommerce market statistics
- Top categories driving Meat eCommerce sales
- Key drivers of Meat eCommerce growth
- Challenges in Meat eCommerce
Meat eCommerce market statistics
The post-pandemic revenue growth observed by Tyson shows no sign of slowdown. Meat eaters worldwide are moving to online shopping to beat queues. The eCommerce sub-segment includes online sales of fresh and processed meat.
- Around 60% of all meat eaters have purchased meat online. 30% of all meat eaters (53% of online meat shoppers) purchased most of their meat online.
- The annual gross revenue of the meat eCommerce segment in North America is projected to reach USD 10.33 billion in 2022. Most of the revenue will be generated in the United States.
- The segment shows a CAGR of 29.66%. Market volume is projected to hit USD 37.85 billion by 2027, with 31.3 million users by 2027.
- In Europe, revenue is projected to reach USD 20.78 billion by 2027, with a CAGR of 23.44%.
- 66% of online meat shoppers are very or extremely satisfied with their overall experience. They cited “convenience, time savings and safety”.
Top categories driving Meat eCommerce sales
Tyson Meats is seeing growth in meat eCommerce, specifically in the following categories:
Direct-to-customer sales from meat producer
Direct-to-consumer (D2C) eCommerce options are gaining popularity in the food sector. Digital sales have spiked 200% compared to in-store. Home cooks prefer to buy direct from the farm, as there is less risk of adulteration. “54% of such [buyers] have also purchased meat online.“ 2 in 3 online meat consumers are “likely to recommend them”.
Partly due to this demand for D2C eCommerce sales, Tyson took the decision to “shut down facilities that supply grocery stores nationwide”.
During lockdown, B2B meat purchases also moved online. Websites selling meat to restaurants or other businesses need strong customer support. This is to address questions such as wastage, ordering, etc. B2B eCommerce also empowers customers to place repeat orders well in advance.
Tyson caters to the restaurant segment through their website, supported by 24 field sales consultants.
Common and versatile cuts (ground beef, ground turkey, chicken breast, etc) saw better sales online than in-store. In Tyson’s experience, ground beef made up “38% of the meat purchased online”. Chicken was “45% of all online meat sales in 2021 – 10 points higher than in-store”. Tyson also has two in-house brands catering to ‘basics’ in meat.
Conversely, premium products fared better in-store.
Key drivers of Meat eCommerce growth
Post lockdown, the entire sector of meat eCommerce has been growing. One reason is simple habit formation during lockdown. There are a few other key sector drivers:
Ease of shopping
Convenience is the biggest driver of the meat eCommerce sub-segment. 18% of consumers say they “don’t like going to the grocery store”. App-based meat ordering and delivery options, as well as ghost kitchens (non-physical restaurants), allow customers to order meat online more easily. Grocery stores are investing in their online stores to create a seamless buying experience.
Interest from older buyers
While younger consumers often drive eCommerce sales, in the case of meat purchase, “older consumers are the fastest-growing adopters of eCommerce this year”. At the height of the pandemic, it offered a “contactless means of acquiring necessary goods” for this high-risk group. Going forward, “households with income above $50K and households with children” are more likely to buy meat or chicken online. These households are likely headed by older consumers.
Growth of full meal solutions
Meat purchasers seldom need only meat. “32% of online meat shoppers used general delivery services and 20% used a meal kit delivery service while only 15% used meat-specific delivery services.” By using meat as a hook, you can deliver a more complete grocery experience.
Meanwhile, younger consumers “favor quick and easy cuts, multicultural options and easy dinner alternatives.” Tyson addresses this segment through pre-cut, portioned, marinated and seasoned meats.
Adoption of plant-based meat alternatives
Demand for plant-based meat alternatives is rising. Surprisingly, this is not because of demand from vegan customers. Instead, it’s because of demand from experimentative non-vegetarians. This group eats all proteins and their other spends were on more exotic meats. Meat alternatives were bought by 18.6% of households in 2021 and grew by 2.8% in 2020. Nearly 90% of such experimenters bought meat online in 2021.
Challenges in Meat eCommerce
Importance of packaging
Your meat – whether frozen or fresh – needs to be delivered to the customer without damage. That makes packaging critical. It needs to be leakproof, freezer-ready and no-mess. Consider vacuum or roll stock packaging to maximize meat shelf life. Such case-ready packaging is a great value-add. At the same time, poorly thought-out packaging can ruin the customer experience.
Low demand for premium products
As discussed earlier, common or ‘basic’ cuts are more popular. Conversely, premium products like steak are purchased more in person than online. High-cost meats are still in demand, especially for special occasions. Premium meat cuts drive basket value (“baskets including steak averaged USD 108.19, more than double the average overall basket of USD 50.85”). Unfortunately for eCommerce, these premium products are usually purchased in person, primarily due to concerns about freshness and quality.
95% of shoppers are “concerned about food cost inflation”. “73% cited beef and pork as having noticeably higher prices”. Fresh poultry and processed meat are not among the top categories hit by inflation, but shoppers notice the impact when meat prices rise. When family budgets need to be balanced, meat may not be a top priority.
On the other hand, the share of premium products may reduce in favor of more common products. This could increase eCommerce involvement.
Nearly 30% of respondents to a survey believe that it is “more ethical to be vegan”. There’s a growing percentage of vegans in the USA, especially among the youth. This increasing acceptance of veganism means that meat consumption may also reduce in the coming years. However, vegans and vegetarians could purchase meat alternatives and substitutes, which can also be sold via meat eCommerce websites.
Tyson and other players in the meat eCommerce market are taking advantage of industry trends and addressing challenges. Are you also ready to access this meaty sector… or are you too chicken?! Talk to our team of experts to discuss how to get started with your meat eCommerce website. Ask us how to prepare for online sales to all audiences. Get in touch today!