Price of meat getting costly.
Animal protein increasingly expensive choice for consumers
The cost of living has been one of the election’s top issues. Most major parties have included measures to help Canadians, especially those with less means. However, according to recent data, consumers are taking matters into their own hands to save a few bucks.
Meat is a big portion of a food budget, roughly 20 per cent on average. If saving money is a priority, cutting meat is an easy target.
Recent retail data suggests consumers are hedging against food inflation at the grocery store. According to some sources, meat sales have dropped significantly, especially in the last 12 weeks. Barbecue season is the most lucrative period of the year for the meat trifecta of beef, chicken and pork.
Across the nation, beef sales by volume at the grocery store have dropped by more than six per cent since May. Even in Alberta, beef sales have dropped that much since May.
It’s worse for chicken and pork. Sales by volume for chicken have dropped by more than 12 per cent, and pork by 17 per cent. In Ontario, pork sales dropped 20 per cent this summer.
Even if consumers were going out more, these drops are significant as many are clearly spending less time at the meat counter.
Meanwhile, retail prices are not shifting. While beef prices are up almost 10 per cent on average since January, according to Statistics Canada, pork and chicken are also more expensive despite sluggish sales.
That’s why the “supply and demand” theory many mention when prices go up rarely makes sense at the grocery store. It’s more complicated. For grocers, the art of setting prices is a blend between protecting margins and price points based on what they believe the market can bear.
Don’t expect prices to drop anytime soon. Higher grain costs, lower inventories and supply chain disruptions are making meat an increasingly expensive choice.
Historically, beef and pork are highly price elastic, while poultry is relatively inelastic. In other words, consumers tend to react to higher beef and pork prices and settle for chicken.
This summer, all components of the meat trifecta were affected by how consumers reacted to higher prices. In most stores, even if “enjoy tonight” deals offering products at 25 to 50 per cent off could be found, the perception that a trip to the meat counter would cost you dearly was ingrained in many consumers’ minds. That’s never good business, especially for meat.
In 2014, beef prices startled consumers with a 25 per cent hike in one month. Many boycotted the meat counter, but only for a while. Sales came back while prices barely dropped.
But 2014 was a different protein market. It was before the Beyond Meat craze. Most Canadians were heavily committed to animal proteins, mainly because they were not aware of other options. Today, it’s different. As most Canadians remain committed to eating animal proteins, they are also game to settle for more affordable sources.
The hard reality for Canadians is this: Eating meat is a luxury in most places around the world and it is slowly becoming one in Canada.
Unlike regular meat, sales for meat alternatives have been slightly higher this summer than in the spring, by about four per cent. Canadians are more aware of their options.
An average family of four can spend anywhere between $2,600 to $3,000 on meat products in a year. Reducing a meat budget can make a difference. Canadians won’t give up meat anytime soon, but other options are within grasp.
According to some reports, Canadians are more food literate than before the pandemic. Most of us know more recipes and are willing to get more creative in the kitchen, which in turn may empower some to consider other protein ingredients. If meat is pricing itself out of the market, so be it. Canadians can handle it, at least more so than they used to.