Cash-strapped consumers opt for hot dogs and sausages when the price of other meats increases
New York, NY (PRWEB) November 08, 2014
The Hot Dog and Sausage Production industry manufactures products that hold a firm place in consumers' diets. Industry specialties like hot dogs, bratwursts, Italian sausages, pepperoni and breakfast sausages are popular inclusions in a variety of meals. For example, hot dogs and dinner sausages are staples in holidays typically celebrated with barbecued meals, while breakfast sausages are popular for both home-cooked and restaurant breakfasts. The well-established market for these products has boosted consumer spending on hot dogs and sausages in line with increased spending on all meat products. In the five years to 2014, industry revenue is estimated to grow.
Industry products have a slight competitive advantage over other meat products. Hot dogs and sausages are typically priced below other fresh, whole cuts of meat like steaks, chicken breasts, pork chops or bacon. Therefore, when meat prices rise across the board, cash-strapped consumers switch from pricier meats to hot dogs and sausages. On the other hand, when meat prices decline, consumers do not abandon hot dogs and sausages for steaks and burgers; industry products still maintain a solid consumer base. This dual appeal, both in terms of pricing value and product preference, helps keep the industry from becoming too volatile and enables profit margins to remain fairly stable.
According to IBISWorld Industry Analyst Antal Neville, “Two trends that have emerged in the past five years will continue to drive the industry in the five years to 2019.” The first is merger and acquisition (M&A) activity. The two largest industry players, Tyson and Smithfield, have undergone significant M&A activity over the past five years. These and other food-manufacturing powerhouses will leverage brand value and economies of scale to increase their market share, pushing up their revenue and profit growth.
The second trend is growth in international trade. “Exports are estimated to increase in the five years to 2014 as consumers in emerging economies come into higher disposable income levels, enabling them to purchase more meat products,” says Neville. Companies in the industry will continue to seek out these growing consumer markets in foreign countries, and exports will consequently drive revenue growth. IBISWorld forecasts that revenue will grow in the five years to 2019.
For more information, visit IBISWorld’s Hot Dog & Sausage Production in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry primarily produce hot dogs and sausages from slaughtered animals or a combination of byproducts from slaughtered animals.
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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