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

Volume 1 of this two-volume Packaged Facts study covers the U.S. market for refrigerated, branded, processed meats (including private labels), which experienced sales of approximately $14 billion in 2001. This market includes beef, pork, and poultry products. The report analyzes the market according to four categories:

  • lunchmeats and lunch kits
  • frankfurters and dinner sausage
  • breakfast meats
  • convenience meats

For the overall market, Packaged Facts presents: sales data and forecasts for the years 1997 through 2006, marketer and brand shares based on Information Resources Inc.'s InfoScan sales-tracking data, factors contributing to market growth, competitive profiles of the leading marketers of branded refrigerated meats (including, among others, Kraft Foods, Sara Lee Corp., ConAgra Foods, Smithfield Foods, and Hormel Foods), analysis of the competitive landscape, a review of new product and marketing trends, reviews of advertising expenditures and discussions of retail dynamics.


Scope and Methodology

Market Parameters

This Packaged Facts report examines refrigerated, branded, processed meat products (including private labels, or "store brands") sold at retail, primarily through supermarkets and supercenters. The analysis covers three established categories and one emerging category of processed meats:

  • Lunchmeats and Lunch Kits: This category consists of two segments, both pre-cooked: 1) lunchmeats and 2) lunch kits. The lunchmeats segment consists of two subsegments: 1) sliced lunchmeat and 2) unsliced lunchmeat. The category does not include unsliced meats that are not positioned explicitly as lunchmeat (whole hams, turkey breasts, and roast beefs, for example) and delicatessen or in-store foodservice meats. This report excludes non-refrigerated products such as tuna lunch kits.
  • Frankfurters and Dinner Sausage: This category consists of two segments, and includes raw and pre-cooked products: 1) frankfurters and 2) dinner sausage. This report excludes non-refrigerated products such as frozen corn dogs or canned Vienna sausage.
  • Breakfast Meats: This category consists of two segments, and includes raw and pre-cooked products: 1) bacon and 2) breakfast sausage/ham. This report excludes non-refrigerated products such as frozen sausage biscuits or shelf-stable bacon bits.
  • Convenience Meats: This category consists of ready-to-cook or pre-cooked fresh meat or poultry products that are branded and value-added, arriving at the store ready-to-shelve. Examples range from a single raw marinated steak to a teriyaki pork tenderloin ready to grill to a fully cooked pot roast ready to heat-and-serve. This report excludes non-refrigerated convenience meat products such as frozen cooked chicken strips.

This Packaged Facts report consists of two volumes: 1) The U.S. Market for Refrigerated Processed Meats—Volume I: Market Overview, which examines the market as a whole; and 2) The U.S. Market for Refrigerated Processed Meats—Volume II: Category Focus, which examines separately and in depth the three established categories.

Report Methodology

The information contained in this report was obtained from both primary and secondary research. Primary research entailed consultation with industry sources and on-site examination of the retail milieu. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature such as annual reports, 10Ks, press releases, and marketing literature. Packaged Facts has derived sales figures from sources such as Information Resources, Inc. (IRI) InfoScan data and Supermarket Business consumer expenditure surveys. Figures provided on national consumer advertising expenditures are based on data (copyright 2000) from CMR, a Taylor Nelson Sofres company. The analysis of consumer demographics primarily derives from the Simmons Market Research Bureau (New York, NY) spring 2000 consumer survey, based on 33,502 respondents.

Press Release

Innovations in Convenience and Flavor Drive $14 Billion Processed Meat Market

New York, April 3/PRNewswire - Lunchmeats and lunch kits, frankfurters and dinner sausage, breakfast meats, and convenience meats posted sales of approximately $14 billion in 2001. This number, while significant, is projected to grow in coming years given emerging product developments in flavoring and convenience packaging. According to The U.S. Market for Refrigerated Processed Meats, a newly published Packaged Facts report available at MarketResearch.com, the industry should enjoy a compound annual growth rate of 4.8% through 2006, bringing total market sales to approximately $17 billion.

Developments in premium products, such as products that are seasoned with herbs and spices, ethnic sausages, thick-sliced bacons and sweetened breakfast sausages have played a large role in improving the reputation of processed meats. Moreover, consumer demand for convenience meats -- the fastest-growing category in the refrigerated processed meats market -- is likely the most significant factor affecting industry sales. Case-ready beef, pork, or poultry products that have been pre-prepared or pre-cooked appeal to consumers not only because they are easy to prepare, but also because they are often available in flavors such as teriyaki or barbeque.

“The convenience meats and lunch kits markets arose in response to consumer demand for convenience,” said Meg Hargreaves, VP of Research Publishing for MarketResearch.com. “Today’s consumers can find value-added processed meat products across all categories and segments, including individually wrapped hot dogs that can be microwaved quickly and even fully cooked and seasoned pot roast.”

The U.S. Market for Refrigerated Processed Meats provides detailed information about consumer demographics, as well as distribution and marketing trends, product development, and emerging promotional campaigns. The report also includes historical sales data, as well as market projections through the year 2005.

About Packaged Facts
Packaged Facts, a division of MarketResearch.com, produces research reports on a wide range of consumer industries, including information on domestic and global market trends and opportunities.

About MarketResearch.com
MarketResearch.com is the leading provider of global marketing intelligence products and services. With over 50,000 research publications from more than 350 top consulting and advisory firms, they we offer instant online access to the world’s most extensive database of expert insights on global industries, companies, products, and trends. For more information, call Alison Williams at 212.807.2649 or visit www.MarketResearch.com.

  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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