Los Angeles, CA (PRWEB) October 14, 2013
While per capita meat consumption is expected to fall only marginally during the five years to 2013, the recession has exacerbated consumption declines; consumers have scaled back the quality and quantity of meat purchased due to reduced disposable incomes and low sentiment toward the economy in general. Also, adverse health effects associated with red meat consumption have driven some consumers toward alternative protein sources. In addition to broad trends related to consumer preference and disposable income, disease outbreaks have limited industry growth in specific years. In 2009, swine flu briefly put the domestic pork market on ice despite the fact that cooked pork products were deemed safe to eat. The scare added to already low consumer sentiment and pushed pork volumes down that year.
According to IBISWorld Industry Analyst Antal Neville, “Despite these detriments, meat remains a staple product, and greater economic issues do not largely affect overall meat sales.” Consequently, during the five years to 2013, revenue for the Meat, Beef and Poultry Processing industry is expected to grow. Moreover, key downstream markets like in frozen foods and animal food production have also exhibited growth over the past five years, leading to demand for meat products. Meanwhile, competition from substitute seafood products has been minimal, thanks to seafood's comparative high prices and consumers' reluctance to spend on relatively extravagant meals. Consumers' returning purchasing power is expected to bolster industry revenue.
The Meat, Beef and Poultry Processing industry has a medium concentration of ownership. The four largest companies in this industry (Tyson Foods Inc., JBS SA, Cargill Inc. and Smithfield Foods Inc.) are estimated to account for more than 20.0% of the domestic market (see IBISWorld report 31161 for major player market shares). Acquisitions by larger industry operators have increased concentration even further during the past five years. This trend is projected to continue due to profitability pressures in many major firms, as key players concentrate on core business development to achieve optimal economies of scale. Most of the larger operators within this industry produce more than one type of meat product, and many are expanding their product range. Tyson and Smithfield, the leading processors of chicken and pork (respectively), recently acquired beef and turkey processing plants (respectively). Many other companies are broadening their stock to include exclusively fresh meats and further processed meats to improve profit margins.
Furthermore, “due to recovering consumer sentiment, population growth and strong export demand, meat processing revenue is forecast to increase annually during the five years to 2018,” says Neville. Despite the stable nature of consumer demand for meat-based products, unpredictable weather conditions and disease outbreaks can cause volatility from year to year. For example, a sudden drought in the Midwest, Plains or Rocky Mountains could reduce livestock numbers, lower meat supplies and increase food prices. Also, a single case of livestock infection could result in substantial short-term losses and international trade bans for the affected meat. Nevertheless, to combat such volatility, the industry has developed technologies intended to reduce disease outbreaks.
For more information, visit IBISWorld’s Meat, Beef & Poultry Processing in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Meat, Beef & Poultry Processing industry slaughter animals, process the carcasses and package the meat into products and by-products. The industry also purifies and refines animal fat, bones and meat scraps. Products are sold to other food manufacturers, renderers, grocery and meat wholesalers, and retail traders. Establishments that mainly cut and pack meats (i.e. boxed meats) from purchased carcasses are also included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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