Usage and Volumetric Assessment of Beef in Foodservice 2015 Edition PREPARED FOR: © 2015 Technomic Inc. DECEMBER 31, 2015 MARCH 18, 2016 | technomic.com Background and objectives Every year since 2003, Technomic has conducted studies to investigate the usage of Beef and Chicken in the foodservice industry. In 2015, Technomic was again engaged to update the previous studies. The primary objectives of this 2015 study edition are to: Determine the penetration of Beef usage in various foodservice segments. Provide an updated volumetric situation of the foodservice Beef market by major product categories, including estimated volume in pounds and dollars. Assess the foodservice market for a variety of Chicken products, including both penetration and volumetric statistics. Understand Beef and Chicken category usage trends, including volume trends, menu position and rationale for offering. © 2015 Technomic Inc. 2 Methodology summary 1 Program Initiation Meeting 2 Questionnaire Development 3 Top 250 Chain Operator Headquarters Internet Survey 4 Unit Level Data Gathering from Foodservice Operators 5 Initial Analysis Market Size Validation/Finalization - Including interviews with 20 distributors (both 6 broadliners and meat specialists) and 5 processors of proteins serving the foodservice industry © 2015 Technomic Inc. 3 Methodology: Operator unit level quantitative respondent base (Step 4) Technomic used the following approach to gather information from non-chain restaurants and other segments. Prescreening: Non-chain and independent Operators were recruited to participate in the survey via telephone. Operator Internal Data Gathering: Operators reviewed their actual invoices to obtain typical monthly volumes of relevant products. Reporting: Operators reported data back to Technomic. A total of 950 operators responded from various segments. Adding in the chain level respondents, a total of 988 operators participated in this research. The segments of Bars & Taverns, Recreation, Military, Corrections, and Continuous Care Retirement Centers were surveyed for this 2015 research wave, unlike the 2014 wave. In 2014, 2013 data was used as a surrogate for 2013 numbers. Segment Restaurants & Bars Full Service Restaurants (small chains/independents) 182 Limited Service Restaurants (small chains/independents) 93 Bars/Taverns 50 Subtotal 325 Beyond Restaurants Healthcare (Hospital, Long Term Care) 105 Lodging 75 Retailers (convenience stores, supermarket foodservice) 75 Business & Industry 75 Colleges 75 Schools 75 Recreation 50 Continuous Care Retirement Center 35 Correctional Facilities 35 U.S. Military Bases 25 Subtotal 625 Total © 2015 Technomic Inc. # of Respondents 950 4 Market size estimation approach To develop market size estimates using volumetric data, Technomic used a build-up approach. Each operator interviewed provided their average monthly volume of each of the relevant products. In addition, these operators also provide Technomic information on their total food and non-alcoholic beverage purchases on an annual basis. Once all interviews were completed, Technomic was able to conduct ratio analyses on sample to develop the initial market size estimates. An example of the methodology is provided for the Healthcare segment. The total monthly pounds of Sirloin Steak used in the sample of 75 Healthcare locations is 7,372. The total annual food & beverage purchases by the 75 locations in the sample is $94 million annually. Technomic tracking data on the foodservice industry shows that the total food and beverage purchases of the entire Healthcare segment of the industry is $8.35B. Therefore, our sample represents 1.1% of the total industry purchases. Applying the 1.1% number to our 7,372 pounds, this suggests that total Healthcare segment Sirloin Steak volume is 670,000 pounds monthly, or 8 million pounds annually. This same exercise was applied to all segments, formats and forms to develop the market size estimates. In addition, Operators were asked to indicate if their usage of each product increased, decreased or stayed the same versus last year. If increased or decreased, they were asked to indicate by what percentage and what was the rationale for the increase or decrease. This provided additional data points from which to conduct triangulation analysis. Once operator research is completed, Technomic conducts interviews with distributors and protein suppliers to obtain further insights and solidify market size estimates. The approach is charted on the next page. © 2015 Technomic Inc. 5 Technomic sizing process Technomic employs the following steps in its market sizing process. It uses a “triangulation” approach to develop its numbers, obtaining feedback not just for operators, but from suppliers and distributors as well. Data Obtained… Unit Level Operators National Accounts • • • • What is used? Formats? Usage change? Business size? Final sizing © 2015 Technomic Inc. • Clean, tabulate, analyze data by segment • Compare to previous report Develop rough market estimates • Confirm growth • Obtain pricing data • Obtain volume Supplier and Distributor Interviews 6 Category scope The following 38 categories are included in this study (34 Beef / 4 Chicken). Pre-cut Beef Steak • Chuck Eye/Delmonico 1116D, PS01 • Denver Steak/Cut (underblade) 116G, 1116G • Flank/Skirt1 193 (Flank), 121C, 121D (Skirt) • Flat Iron 114D, PS01 or 1114D, PS01 • Hanger Steak6 140, 1140D • Petite Tender Medallions (teres major) 1114F • Porterhouse/ T-Bone2 1173 (porterhouse); 1174 (Tbone) • Ranch Steak/Cut 114E, PS01 or 1114E, PS01 1—New category breakout in 2011 3—New category in 2014 5—Category redefined in 2014 7- Category redefined in 2015 © 2015 Technomic Inc. • Ribeye/Rib/Ribeye Cap 1103-1112C (ribeye/rib); 112D-1112D (ribeye cap); • Sirloin (top, butt, bottom, cap/coulotte) 1184-1185B • Strip (top loin) 1179-1189 • Tenderloin/Filet (includes pre-cut for steaks) 1188-1190B • Tri-Tip1 1185C, 1185D • Other Steak (round, cubed, chuck, other steaks) Pre-Cooked Roast Beef Whole/Subprimals/Roasts • Brisket 120-120C3 • Chuck Eye/ Underblade 116D5 • Chuck/Shoulder (excluding petite tender, chuck eye, underblade) 114, 114D, 114E, 116A, 116B, 116E • Petite Tender1 114F • Rib or Rib Eye or Ribeye Cap (prime rib) 107 - 112D • Sirloin 184—185B • Pre-Cooked Roast Beef (whole muscle) Ground Beef • Patties6 • Bulk6 • Preparations (meatloaf, meatballs, chili, lasagna, etc.) Ribs All Other Beef Chicken • All Beef Hot Dogs/Brats/Sausage • Bone-in (wings, whole fryers, and parts)6 • Strips/Cubes/Shreds or Shaved/Philly Beef including Lifter Meat4,7 • Boneless Chicken (all forms)6 • Specialty Deli Meats (pastrami, corned beef, roast beef) • Other Beef (Liver, offal, organ, and all other beef not accounted for previously. Excludes veal) 7 • Further Processed Chicken (patties, nuggets, tenders, strips, breaded, formed and dices)5 • All Other6 • Back Ribs 124, 124A • Strip Loin/Top Loin6 175-180 • Boneless Country-Style Ribs1 116D or 1116D, PS02 • Round 167 - 171G • Short Ribs 123, 123B, 130, 130A • Tenderloin Roast 189 - 192 • Tri-Tip1 185D 2—Porterhouse/T-Bone combined into 1 category in 2011 4—Strips/Cubes combined with Philly/Shaved and Shreds in 2014 6—New breakout category in 2015 7 Notes/clarifications The following notes and clarifications will assist in interpreting the results of this report. All volumetric pound estimates are subject to a range of ±10%. Volume data shown is for 12 months ending September of the respective year. Dollar volumes shown are based on reported pricing in September of each respective year. Pricing reflects price paid by the foodservice operator (operator purchase level). Price data are reported by distributors. ‒ In 2015, the beef market continued its inflationary trend until pricing started to fall in August/September. Since market value is based on pricing reported in September, the total dollar value of beef market in 2015 may be understated. MM = millions. Min = minimal or less than 500,000 in annual pound volume. Numbers may not add due to rounding. In 2012, Bars/Taverns, Retailers, Corrections, Military and Continuous Care Retirement Centers were not specifically researched. 2011 data are used as surrogates in these segments. In 2014, Bars/Taverns, Recreation, Corrections, Military and Continuous Care Retirement Centers were not specifically researched. 2013 data are used as surrogates in these segments. © 2015 Technomic Inc. 8 II. KEY OBSERVATIONS, INTERPRETATIONS, IMPERATIVES AND RECOMMENDATIONS © 2015 Technomic Inc. Key observations and interpretations Observations Insights ● Beef volume is down 183 million pounds in 2015, and 335 million pounds since 2013. ● Dollar value is down over $2B between this year and last. ● Record high beef prices result in lower volume usage by operators. However, some deflation later in 2015 in some categories has caused dollar value on a per pound basis to drop in some cuts. ● Note however, that based on Technomic’s methodology of using September pricing to develop market dollar value statistics, the foodservice beef operator purchase dollar number may be understated for 2015. In this year, the beef market continued its inflationary trend until August, at which time prices started to drop. Year Foodservice Beef Volume (MM Lbs.) Change vs. Previous Year (MM Lbs.) Foodservice Beef Operator Purchase Dollars ($ MM) Change vs. Previous Year ($ MM) 2010 7,948 +54 $26,997 +$2,483 2011 7,855 -93 30,401 +3,404 2012 7,994 +139 32,945 +2,544 2013 8,072 +79 32,061 -884 2014 7,920 -152 34,974 +2,919 2015 7,737 -183 32,877 -2,097 Dollar value calculations based on September pricing for each representative year © 2015 Technomic Inc. 10 Key observations and interpretations Observations Insights ● Although overall beef penetration has remained stable despite price proliferation, penetration in steaks, roasts and pre-cooked roasts is down. ● Beef commodity costs may have hit a ceiling for some operators to the point where they can no longer afford to offer these cuts on the menu. % Operators Menuing/Using Beef Cut 2015 2014 2013 2012 2011 2010 Ground Beef 75% 74% 72% 72% 75% 75% Steaks 42 48 47 47 43 53 Roasts** 36 40 45 45 43 46 Pre-Cooked Roast Beef* 20 29 25 25 24 – Ribs 14 15 13 11 10 11 96% 96% 97% 96% 97% 95% Overall Beef *Category added in 2011 **Category redefined in 2014 © 2015 Technomic Inc. 11 Key observations and interpretations Observations Insights ● Roasts (subprimal) and other beef have increased in volume since 2014, but steak and ground beef are down. ● Only other beef has increased in value, while every other beef cut has declined, led by pre-cut steaks. ● Roasts’ volume increase may be slightly overstated due to the inclusion of strip/top loin roasts as a separate category in 2015. Some of this volume increase may be coming at the expense of strip steak, other steak or other beef. ● Both volume decreases and the beginning of some deflation at the end of the year contribute to overall decline in beef market value. 2015 Annual Total = 7.737 Billion Lbs. 1% Ground Beef—5.020 B 4% 7% Pounds Change 2015 vs. 2014 = -183 Million Lbs. 50 45 Pre-cut Steak—0.973 B 65% 10% -26 Roasts (subprimal)—0.790 B -45 Other Beef—0.522 B Pre-Cooked Roast Beef—0.311 B 13% Ribs—0.122 B 2015 Annual Total = $32.877 Billion 1% 38% 5% Ground Beef—$12.596 B Pre-cut Steak—$10.365 B 6% Roasts (subprimal)—$5.761 B -133 Other Beef Roasts* Ribs 32% Pre-cut steak $282 -$21 -$45 -$311 -$939 Pre-Cooked Roast Beef—$1.647 B Ribs—$0.488 B Pre-Cooked Ground Roast Beef Beef Dollar Change 2015 vs. 2014 = -2,097 Million Other Beef—$2.020 B 18% -73 Other Beef Roasts* Ribs 2015 addition of Strip/Top Loin Roasts may not make comparisons to 2014 directly comparable, as some volume may be coming from other cuts Dollar value calculations based on September 2015 pricing. Note: Numbers may not add due to rounding. © 2015 Technomic Inc. Pre-Cooked Ground Roast Beef Beef -$1,064 Pre-cut Steak 12 Overall conclusions Major conclusions from this 2015 Beef research are: Beef continues to decline, and is now second to chicken in terms of protein volume. Continuing rising beef prices and tight supplies are causing volume declines, but it appears that price softening has started to occur in the latter part of the year, which could firm up volume going forward. Steak has lost significant volume, but roasts have picked up some of that volume. Although chicken has surpassed beef in terms of volume, pork is growing at the fastest pace among the proteins driven by economical prices, new applications and positioning as a beef alternative. Of the total $145 billion wholesale value of all food sold into foodservice, Beef represents almost 23% of dollars and is undoubtedly the #1 product sold into the channel. © 2015 Technomic Inc. 13 III. MARKET OVERVIEW © 2015 Technomic Inc. Total protein market in foodservice The total foodservice protein market represents 25.49 billion pounds in 2015. Total protein volume is up 70 million pounds from 2014, and 581 million pounds since 2010. Beef has declined 183 million pounds in 2015, while chicken increased by 45 million pounds and pork is up 165 million pounds. Chicken is now the largest protein in foodservice by volume. Since 2010, beef is down 210 million pounds, but pork is up 425 million pounds. Chicken is up 231 million pounds over this period. 2015 2014 2013 2012 2011 2010 Segment`` MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % ∆ MM Lbs. 2010— 2015 Chicken 7,757 30 7,712 30 7,630 30 7,491 30 7,520 31 7,526 30 +231 Beef 7,737 30% 7,920 31% 8,072 32% 7,994 32% 7,855 32% 7,947 32% -210 Pork 5,315 21 5,150 20 5,010 20 4,900 20 4,800 20 4,900 20 +415 Seafood 2,855 11 2,750 11 2,760 11 2,750 11 2,700 12 2,750 11 +105 Turkey 1,600 6 1,660 7 1,610 6 1,600 6 1,560 6 1,550 6 +50 Veal 75 <1 80 <1 85 <1 89 <1 89 <1 90 <1 -15 All Others* 70 <1 67 <1 65 <1 65 <1 64 <1 65 <1 +5 25,409 100% 25,339 100% 25,232 100% 24,889 100% 24,588 100% 24,828 100% +581 Total *Game, Cornish hen, duck, buffalo, etc. Note: Numbers may not add due to rounding. Source: Technomic . © 2015 Technomic Inc. 15 Beef volume by foodservice operator segment Beef volume in foodservice decreased by 183 million pounds in 2015. The majority of the decrease has come from LSRs, but FSRs, B&I and Military have also contributed significantly. Big increases, however, have been seen in the retail sector, primarily within supermarket foodservice. Since 2010, the beef category is down 3 percent or 211 MM lbs. with the largest drop-offs on a percentage basis in B&I, Recreation, and Military. Over a 5 year time frame, Beef volume has remained relatively stable in LSR, FSR, healthcare, schools, and CCRCs. 2015 2014 2013 2012 2011 2010 2014-2015 Change 2010-2015 Change MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % LSR 3,492 45% 3,597 45% 3,591 44% 3,556 44% 3,470 44% 3,441 43% -105 -3% +51 +1% FSR 1,713 22 1,761 22 1,799 22 1,807 23 1,739 22 1,767 22 -48 -3 -54 -3 108 2 126 2 126 2 125 2 125 2 129 2 -18 -14 -21 -16 5,313 69% 5,484 69% 5,516 68% 5,488 5,334 68% 5,337 67% -171 -3% -24 <-1% Lodging 337 5% 360 4% 422 5% 372 5% 384 5% 392 5% -23 -23% -55 -14 Retail1 208 2 154 2 173 2 170 2 170 2 180 2 +54 +35 +28 +16 Recreation2 188 3 199 3 199 2 228 3 231 3 228 3 -11 -6 -40 -18 Healthcare 236 3 226 3 233 3 233 3 230 3 225 3 +12 +4 +11 +5 Colleges 343 4 327 4 344 4 340 4 324 4 320 4 +16 +5 +23 +7 Schools 467 6 462 6 504 6 490 6 494 6 489 6 +5 +1 -22 -4 Business & Industry 288 4 324 4 295 4 310 4 325 4 393 5 -36 -11 -105 -27 Military1,2 152 2 186 2 186 2 164 2 164 2 186 2 -34 -18 -34 -18 Corrections1,2 46 1 63 1 63 1 57 1 57 1 55 1 -17 -27 -9 +16 CCRCs1,2 159 2 137 2 137 2 142 1 142 2 143 2 +22 +16 +16 +11 Total Beyond Restaurants 2,424 31% 2,436 31% 2,556 32% 2,506 31% 2,521 32% 2,611 33% -12 -1% -187 -7% Total 7,737 100% 7,920 100% 8,072 100% 7,994 100% 7,855 100% 7,948 100% -183 -2% -211 -3% Segment Bars/Taverns1,2 Total Restaurants & Bars 69% 1Segment not researched in 2012. 2011 data used as surrogate for 2012 in this segment not researched in 2014. 2013 used as a surrogate for 2014 in this segment. Note: Numbers may not add due to rounding. Source: Technomic 2Segment © 2015 Technomic Inc. 16 Beef cut pound and market value trends Overall Beef is down 2.3% in volume and 6% in dollars. Biggest percentage declines are found in pre-cut steaks, ribs and precooked beef. Roasts (subprimal) and other beef are growing on a volume basis in 2015. Overall, there appears to be deflation occurring in ground beef, roasts (sub-primal), and pre-cooked roast beef, while downward pricing pressures is not yet evident in other categories. Lbs. MM Category 2015 2014 2013 2012 2011 2010 '15 vs. ’14 2015 2014 2013 $MM 2012 2011 2010 '15 vs. ‘14 Ground Beef 5,020 5,093 5,123 5,102 5,056 5,103 -1.4% $12,596 $13,535 $11,826 $12,315 $11,414 $9,963 -6.9% Pre-cut Steaks 973 1,106 1,160 1,142 1,093 1,201 -12.2 10,365 11,429 11,124 11,520 10,521 10,061 -9.3 Roasts (subprimal)* 790 745 742 725 695 989 +6.0 5,761 5,782 5,159 5,244 4,771 4,871 -0.4 Other Beef 522 472 534 539 532 519 +10.5 2,020 1,738 1,732 1,738 1,650 1,741 +16.2 Pre-Cooked Roast Beef 311 356 367 358 348 – -12.7 1,647 1,958 1,762 1,752 1,653 – -15.9 Ribs 122 148 146 128 131 136 -17.6 488 533 467 376 393 341 -8.4 Total 7,737 7,920 8,072 7,994 7,855 7,948 -2.3% $32,877 $34,974 $32,061 $32,945 $30,401 $26,977 -6.0% Dollar value calculations based on September pricing for each representative year * Strip/Top Loin was added as a separate category in 2015, which may be artificially inflating volume in roasts, and deflating steak category volume. © 2015 Technomic Inc. 17 Key observations and interpretations Observations Insights ● Every pre-cut steak cut has experienced volume decline except for Denver Steak/Underblade and Other in 2015. ● Traditional cuts represent the largest share of both pound and dollar declines. These represent the highest value cuts. ● In terms of dollar growth, only Sirloin and Other Steaks have shown any in 2015. 2015 Pre-cut Steak Cuts Rib/Ribeye/Ribeye Cap Filets Flank/Skirt Strip/Top Loin Porterhouse/T-Bone Total Traditional Cuts Sirloin Flat Iron Petite Tender Medallions Tri-Tip Chuck Eye/Delmonico Ranch Cut Denver Steak/Underblade Total Emerging Cuts Other Steaks Total MM Lbs. 153 144 128 99 54 578 228 59 23 10 9 7 2 338 57 973 Dollar value calculations based on September 2015 & 2014 pricing Numbers may not add due to rounding © 2015 Technomic Inc. 2014 $ MM 1,836 $3,132 800 988 556 $7,312 $1,882 440 199 62 99 39 16 $2,737 $316 $10,365 MM Lbs. 180 163 140 110 71 664 244 61 34 14 19 13 2 387 55 1,106 $ MM 1,998 $3,545 924 1,012 675 $8,154 $1,781 473 306 83 214 78 16 $2,951 $325 $11,429 2015 Change vs. 2014 MM Lbs. $ MM -27 -162 -19 -$413 -12 -124 -11 -24 -17 -118 -86 -$842 -16 $100 -2 -33 -11 -107 -4 -21 -10 -115 -6 -39 0 0 -49 -$214 +2 -$7 -133 -$1,063 18 Key observations and interpretations Observations Insights ● Roasts (subprimal) poundage is up overall, driven by Brisket, Sirloin Roast and the addition of Strip Roast/Top Loin. ● Even in categories where there is decline, declines are not as dramatic as in pre-cut Steaks. ● Overall increase in Roasts should be viewed in light of Strip/Top Loin being added as a separate category in 2015, which may be driving some volume upward. ● The better situation in Roasts versus Pre-Cut Steaks may be due to some operator shifting from Pre-cut Steaks to Roasts for cost savings and versatility reasons 2015 Roast (Subprimal) Tenderloin Rib or Ribeye or Ribeye Cap (prime rib) Chuck/Shoulder Round Total Traditional Cuts Chuckeye or Underblade Tri- Tip Petite Tender Total Emerging Cuts Brisket Strip Loin/Top Loin Sirloin Roast Total new categories added in 2014 & 2015 Total 2015 Change vs. 2014 MM Lbs. $ MM -29 -$343 MM Lbs. 192 $ MM $2,242 MM Lbs. 221 $ MM $2,586 179 1,765 190 1,786 -11 -21 105 98 574 28 13 10 51 63 65 37 408 381 $4,796 145 63 44 $249 222 293 204 110 99 620 39 14 10 63 42 – 20 440 396 $5,208 207 63 45 $375 168 – 102 -5 -1 -46 -11 -1 0 -12 +21 +65 +17 -32 -15 -$412 -62 -3 -1 -$66 64 293 102 165 $719 62 $270 +124 $459 790 $5,761 745 $5,782 +45 -$21 N/M = Not meaningful as new categories added in 2015 Dollar value calculations based on September 2015 & 2014 pricing Numbers may not add due to rounding © 2015 Technomic Inc. 2014 19 Key observations and interpretations Observations Insights ● Some decline in roast beef and rib volume occurred, while most other beef cuts are growing. ● Continued slow growth of major burger chains and high ground beef prices are driving decline of ground beef. ● Rib declines may be indicative of a shift toward more pork ribs due to pricing. ● Value-added beef (strips/cubes/shaved/shreds) is mostly driven by growth of fast casual. 2015 Ground Beef Patties & Bulk Preparations Total Ground Beef Total Pre-Cooked Roast Beef Ribs Boneless Country-style Back Short Total Ribs Other All Beef Hot Dogs/Brats Strips/Cubes/Shaved/Shreds* Specialty Beef Deli Meats All Other Beef* Total Other 2014 2015 Change vs. 2014 MM Lbs. $ MM -67 -$903 -6 -35 -73 -$939 -45 -$311 MM Lbs. 4,835 185 5,020 311 $ MM $12,087 509 $12,596 $1,647 MM Lbs. 4,902 191 5,093 356 $ MM $12,990 544 $13,535 $1,958 12 15 95 122 $48 60 380 $488 18 20 110 148 $65 72 396 $533 -6 -5 -15 -26 -$17 -12 -16 -$45 228 192 78 24 522 $651 894 388 87 $2,020 206 163 84 19 472 $546 724 403 66 $1,738 +22 +29 -6 +5 +50 +$105 +170 -15 +21 +$282 *Definition changed in 2015 Numbers may not add due to rounding Dollar value calculations based on September 2015 & 2014 pricing. © 2015 Technomic Inc. 20 Beef market volume In 2015, the beef industry lost 2.3% of volume in 2014, 6% of market value in dollars. This discrepancy suggests there has been some deflation in the beef market over the past year. Note, however, pricing data to determine market value of beef cuts were gathered in late September of 2015 during a deflationary beef market period. Therefore, the total market value may not be indicative of the entire year 2015 for this reason. In MM Lbs. Change -1.2% -93 Change +1.8% +139 Change +1.0% +78 In $MM * Change -1.9% -152 Change -2.3% -183 Change +12.6% +$3,404 Change +8.4% +$2,544 Change -2.7% -$884 Change +9.1% +$2,913 Change -6.0% -$2,097 8,072 $34,974 7,994 7,948 $32,945 7,920 7,855 $32,877 $32,061 $30,401 7,737 $26,977 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 *At the operator purchase, or distributor sales level. Dollar value calculations based on September pricing for each representative year. Source: Technomic, Inc. © 2015 Technomic Inc. 21
© Copyright 2026 Paperzz