February 18, 2019
Year-end sales data has arrived and 2018 was an excellent year for beef at retail. Compared to 2017, monthly beef dollar sales were higher throughout the year and total beef sales increased 6.0% nationwide, on sharply higher volumes accompanied by stronger prices (see chart).1 As noted previously, these positive factors combined to drive consumer demand for beef higher.2
Source: Freshlook/IRI, Total US MULO, 52 Weeks Ending 12/30/2018; Categorized by VMMeat System
Diving into the details, the versatility, convenience and affordability of Ground Beef resonated particularly well with consumers in 2018, as dollar sales rose 9%. Higher volumes accounted for 7.5% of this growth whereas prices were 1.3% stronger. These increases were more robust in the first half of the year (+12.2% in dollars), as higher prices from January-June (+3.5%) gave way to slight declines in the back half of the year (-0.8%). By grind type, 70-77% lean sales increased over $600 million to $4.0 billion, while Ground Brisket captured some interest (off a tiny base) with a 72.6% jump to $10.2 million.
Middle meat steak sales were plentiful in 2018, as well. Sales increased 3.7% on both higher volumes and price. Pound increases were sharpest in July and August (+10.4%) when retailers offered consumer-friendly pricing (-2.0%) while grilling season was in full-swing. Steak sales finished the year strong with November-December revenues up 5.0%. By cut, shoppers purchased 13.9% more pounds of T-Bone Steak, 9.5% more pounds of bone-in Strip Steak, and 0.4% fewer pounds of Top Sirloin Steak. Combined with prices, these quantity changes illustrate strong consumer demand for higher-end cuts.
Slightly higher end roast (Chuck, Shoulder, Round) sales in 2018 were driven entirely by price (+2.8%) as Ground Beef’s popularity pulled more end-primal pounds to the grinder to meet consumer demand. As a result, end roast volume declined 1.7% in 2018. Roast pounds fell in March (-5.4%) when prices jumped 6.3% higher. After a volume rebound in April, end roast volume remained weaker throughout the grilling season and into the Fall, although price increases remained robust. Despite these overall quantity declines, Eye of Round Roast pounds increased 8.3% for the year and Blade Chuck Roast pounds were 4.3% higher. Alternatively, Bottom Round Roast and Chuck Center Roast volumes dropped 8.7% and 3.0%, respectively.
The following table slices the year-end sales data a bit differently. Instead of looking to beef sales by product form, dollars, pounds and price are noted by primal. Reflecting the discussion above, Ground, Rib and Loin sales (along with Plate, Brisket and Miscellaneous) were stronger, whereas Shoulder and Round dollars lagged. Beef prices, however, were stronger across-the-board, helping to drive the overall strong demand for beef.
Finally, total meat and poultry sales are included, as well. The value beef added for retailers in 2018 is clear, as the 6.0% increase in beef sales was a primary driver for the total 3.8% growth in department sales.
Shoppers spent handsomely on animal proteins at retail in 2018, particularly for beef. Current USDA projections suggest even more beef will be available for consumers in 2019.3 While competing protein supplies, consumer preferences, trade and the overall economy will have a role in determining price, 2019 may be another opportunity year for beef at retail.