With announcements almost every week that more companies are introducing or trying faux meat products, from Nestle to McDonald’s, it would be tempting to suggest they’re about to take over the world.
Not so fast. While such products are growing more popular, they are still what many in the U.S. beef industry calls them, fake meat. And fake meat does not satisfy consumers’ taste for the real thing when it comes to beef. Don’t take my word for it. That’s what numerous consumer polls have consistently shown this year. So rest easy. Fake meat isn’t going to take over the world.
In contrast to all the fake meat headlines, another totally different surge in food sales is taking place around the world, at convenience stores. And the U.S. red meat industry is benefitting from this surge, which is occurring from Asia to Mexico. The U.S Meat Export Federation (USMEF) is taking advantage of the surge to promote U.S. beef and pork in these stores, it says.
The desire for work-life balance and pre-packaged meals requiring little or no kitchen time is leading consumers around the world to a surprising new destination for breakfast, lunch and dinner, the neighborhood convenience store, it says.
And it is not just talking about beef jerky and pepperoni sticks. Convenience stores are offering a wide selection of entree and full meal options that are winning over customers and creating more demand for U.S. red meat, it says.
For every gourmet hot dog sold in a South Korean GS25 store, every bowl of beef noodle soup ladled from a 7-Eleven hot food counter in Taiwan and every pork sausage sandwich pulled from a shelf in a Mexican Oxxo outlet comes another trade opportunity for the U.S. beef and pork industries, says USMEF.
Working to stay a step ahead of the competition for this rapidly growing sector, it uses funding from USDA’s Market Access Program, the Beef Checkoff program and the National Pork Board to promote U.S. beef and pork. It especially promotes processed beef and pork items, but also raw material for further processing, as the centerpiece of convenience store fare in several international markets, it says.
Just as important as promoting existing products, USMEF is developing new ideas for packaged meals and protein snack items featuring U.S. beef and pork that fit well with consumer trends in each individual market, says President and CEO Dan Halstrom. USMEF recognizes the scope of this opportunity and the enormous demand that is driving it. As the convenience store sector has taken off in various parts of the world, suppliers realize they need products to help meet the demand for these meat snacks and packaged meals.
The trend is toward high quality meat and that is definitely an advantage for U.S. beef and pork. USMEF staff around the world report encouraging developments in this sector, including the fact that convenience stores in many Asian markets not only offer high quality food but allocate considerable shelf space to beef and pork items such as pre-packaged lunch boxes and beef bowls, he says.
Data supports USMEF’s strategy
Solid data supports USMEF’s pursuit of a larger share of the bustling global convenience store market, it says. According to a 2019 report by Euromonitor, which tracks retail sales and maintains a category dedicated specifically to convenience stores, per capita spending on food service products at convenience stores increased 14 percent worldwide between 2013 and 2018 and is projected to increase another 11 percent by 2023. South Korea has led the way, experiencing a 142 percent increase in per capita convenience store foodservice spending from 2013 to 2018, with another 47 percent increase projected by 2023, it says. Japan, Taiwan, the ASEAN region and Mexico are other fast-growing markets identified by Euromonitor, says USMEF.
A USDA report also suggests that China’s convenience store chains, which have historically focused on lower-priced processed foods, are beginning to expand premium and imported food offerings. This trend is likely to continue as younger Chinese consumers shift away from traditional retail outlets, says USMEF.
These numbers lend further perspective to the Euromonitor data: In 2018, the average American spent $44.50 on foodservice items at a convenience store, which ranks fourth globally. Japanese consumers ranked first with an average of $240.80, followed by Taiwan at $80.70 and Norway at $72. The average Korean spent only $39.70 last year for fifth place on the list. But projected growth puts Korean spending at $58.40 by 2023. If these projections hold true, Korea would move ahead of the U.S., which is expected to reach $54.60 by 2023.
Even in less-developed markets, spending is on an impressive trajectory. In Thailand, the average consumer forked over $28.80 for convenience store items in 2018 but the amount is projected to exceed $50 within the next five years. Obviously, there is tremendous potential for U.S. beef and pork in the convenience store sector but competition is intense, says Halstrom.
So USMEF must focus its efforts on identifying ways to highlight the advantages of U.S. products. The quality and consistency that U.S. beef and pork deliver in processed products are really what sets the U.S. apart, he says.
Japan has room for growth
Although Japan is by far the leader in per capita spending on food service products at convenience stores, it still has room for growth, says USMEF. Euromonitor indicates that spending increased 16 percent between 2013 and 2018, and is expected to rise another 7 percent by 2023.
A pioneer of sorts in the pre-packed, ready-to-eat meal game, Japan’s convenience stores often resemble a supermarket/restaurant combination. There are more than 20,000 7-Eleven stores in Japan, competing with major chains Lawson and Family Mart. Both beef and pork are well-utilized in Japan’s convenience store offerings, which range from bento boxes, to beef bowls, to sandwiches to noodle dishes. USMEF says it has long promoted the use of U.S. beef and pork to importers that supply Japan’s convenience stores.
This experience has helped the U.S. red meat industry improve efficiency when supplying specific cuts and processed products, it says.
In Mexico, demand has increased for convenience foods and prepared meals due to population shifts toward urban centers and more women entering the workforce, says USMEF. According to Euromonitor, per capita spending on convenience store food items rose 24 percent between 2013 and 2018 to $8.90 and is expected to expand another 12 percent over the next five years. Euromonitor also reported that the packaged food market in Mexico is expected to reach $53.5 billion by 2022.
High-growth categories in this forecast include processed meat and seafood snacks and ready meals such as pre-packaged sandwiches, entrees and side items. Oxxo is the largest convenience store chain in Mexico, with more than 17,000 locations throughout the country. USMEF is working behind the scenes with companies that supply Oxxo stores. For example, it has conducted educational seminars and trainings to the processing companies that supply hams and sausages for sandwiches sold by Oxxo, as well as by Mexico’s 7-Eleven convenience stores. The trainings emphasize the quality and consistency of U.S. pork and beef and introduce distributors to new product options, says USMEF.
Stores in Korea triple in decade
There were only about 10,000 convenience stores in South Korea in 2007 but that number tripled over the next decade, says USMEF. Recent growth has been even more aggressive. With lifestyle changes among Koreans coupled with a growing number of single households, convenience store expansion accelerated rapidly.
By the end of 2018, there were more than 40,000 stores in the country, says Jihae Yang, USMEF director in Korea. Korea’s home meal replacement market more than doubled between 2011 and 2018 and the meal kits, a supermarket and wholesale chain store item now offered by convenience stores, continue to gain popularity.
Continuous lifestyle changes for Koreans have created great demand for convenience foods, says Yang. The popularity of meal kits is driving demand for meat products. So USMEF has been working hard to demonstrate how U.S. pork and beef work well as centerpieces of these kits. Koreans are looking for quick meals that require no preparation, and USMEF is coming up with new ideas and new products to meet this demand.
A recent example of this strategy was USMEF’s launch and promotion of a ready-to-eat corn dog at convenience stores across Korea. Another development is the protein snack boom among Korean millennials, says Yang.
Recent data showed there are nearly 11,000 convenience stores in Taiwan, or one for every 2,222 people, says USMEF. This is the second highest density worldwide, according to Taiwan’s Ministry of Economic Affairs. Taiwan trails only South Korea (one store for every 1,452 people) and is ahead of Japan (one store for every 2,248 people).
Besides 7-Eleven (5,281 outlets as of mid-2018) and Family Mart, the other major convenience store chains in Taiwan are Hi-Life and O.K. Mart. Taiwan’s 7-Eleven stores have been labeled as food heaven by the country’s consumers. You can pick up a ready-to-go meal, something like pork chop rice or beef noodle soup, or grab something from the refrigerated case and heat it up in the in-store microwaves, says Alex Sun, USMEF marketing manager in Taiwan.
Consumers in Taiwan are looking for quick meal solutions but want something fresh. So convenience stores have stepped up their selection of these offerings, he says. — Steve Kay
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)