WWW.IBISWORLD.

COM Meat Markets in the USDecember 2019   1

Grade A: the price of red meat is expected to

continue declining hindering industry revenue

IBISWorld Industry Report 44521

Meat Markets in the US
December 2019 Arnez Rodriguez

2 About this Industry 17 International Trade 30 Industry Assistance

2 Industry Definition 18 Business Locations
2 Main Activities 31 Key Statistics
2 Similar Industries 20 Competitive Landscape 31 Industry Data
3 Additional Resources 20 Market Share Concentration 31 Annual Change
20 Key Success Factors 31 Key Ratios
4 Industry at a Glance 20 Cost Structure Benchmarks 32 Industry Financial Ratios
22 Basis of Competition
5 Industry Performance 23 Barriers to Entry 33 Jargon & Glossary
5 Executive Summary 24 Industry Globalization
5 Key External Drivers
7 Current Performance 25 Major Companies
9 Industry Outlook 25 Omaha Steaks International Inc.
11 Industry Life Cycle 26 Honey Baked Ham Company

13 Products and Markets 27 Operating Conditions

13 Supply Chain 27 Capital Intensity
13 Products and Services 28 Technology and Systems
14 Demand Determinants 28 Revenue Volatility
15 Major Markets 29 Regulation and Policy

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   2

About this Industry

Industry Definition The Meat Markets industry comprises
butcher shops and delicatessens that
primarily retail fresh, frozen and cured
meats and poultry products to
households, other retailers and food
service companies. Establishments that
primarily retail fish and seafood are
covered in the Fish and Seafood Markets
industry (IBISWorld report 44522).
Butcher shops and deli counters owned
by and operated in larger supermarkets
are excluded from this industry.

Main Activities The primary activities of this industry are

Preparing and selling beef and pork
Preparing and selling poultry
Preparing and selling lamb veal and delicatessen items
Preparing and selling frozen and packaged meats

The major products and services in this industry are

Beef
Frozen and packaged meats
Pork
Poultry
Other meats
Other products

Similar Industries 31161 Meat, Beef & Poultry Processing in the US

Companies in this industry slaughter animals, process the carcasses and prepare and package meat into
products.

44511 Supermarkets & Grocery Stores in the US

Establishments in this industry retail general lines of food products, including fresh and prepared meats.

44522 Fish & Seafood Markets in the US

Companies in this industry primarily retail fresh, frozen and cured fish and seafood items.

44523 Fruit & Vegetable Markets in the US

Companies in this industry primarily retail fresh produce such as various fruits and vegetables.

44529 Specialty Food Stores in the US

Companies in this industry are specialized retailers of premium food products including some meat goods.
WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   3

About this Industry

Additional Resources For additional information on this industry

www.aamp.com
American Association of Meat Processors
www.fmi.org
Food Marketing Institute
www.meatinstitute.org
North American Meat Institute
www.packagedfacts.com
Packaged Facts

IBISWorld writes over 1000 US

industry reports, which are updated
up to four times a year. To see all
reports, go towww.ibisworld.com
WWW.IBISWORLD.COM Meat Markets in the US December 2019   4

Industry at a Glance
Meat Markets in 2019

Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24

Snapshot
$6.8bn -0.8% -0.4%
Profit Wages Businesses

$163.3m $1.0bn 8,166

Revenue vs. employment growth Per capita meat consumption
Market Share
Omaha Steaks 16 225
International Inc. 220
8.2% 8
215

Pounds (lb)
% change

0 210

205
-8
200

-16 195
Year 11 13 15 17 19 21 23 25 Year 11 13 15 17 19 21 23 25
Revenue Employment
SOURCE: WWW.IBISWORLD.COM
p. 25
Products and services segmentation (2019)
4.2%
Key External Drivers Frozen and packaged meats
Per capita meat 14.0%
consumption
Price of poultry meat
Pork
26.3%
Beef
Price of red meat
Per capita disposable
income 16.6%
Per capita seafood Other meats
consumption

19.9%
Other products

p. 5 19.0%
Poultry
SOURCE: WWW.IBISWORLD.COM

Industry Structure Life Cycle Stage Mature Regulation Level Medium

Revenue Volatility Low Technology Change Medium
Capital Intensity Low Barriers to Entry Low
Industry Assistance Low Industry Globalization Low
Concentration Level Low Competition Level High

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 31
WWW.IBISWORLD.COM
Industry Performance
Executive Summary   |   Key External Drivers   |   Current Performance
Industry Outlook   |   Life Cycle Stage
Executive Summary The Meat Markets industry retails a
variety of fresh, frozen and cured meat
primarily to households, as well as other
downstream markets. In recent years,
competition from traditional and
nontraditional retailers alike has
negatively impacted meat markets and
butcher shops. Moreover, the traditional
relationship dynamic between food
retailers, wholesalers and manufacturers
has been shifting, making the food retail
market more competitive overall. While
increasing health concerns and declining
O perators
encountered growing
competition from supermarkets, grocery
stores and big-box retailers
input costs have hindered industry
performance, increased demand for meat
products, supported by rising per capita
disposable income levels, has slowed the
decline in revenue. Over the five years to
2019, industry revenue is expected to
decrease at an annualized rate of 0.8% to
$6.8 billion, despite an expected 0.5%
rise in 2019 alone.
Operators encountered growing
competition from supermarkets, grocery
stores and big-box retailers over the five
years to 2019. Each of these retail
channels provides an extensive product
Key External Drivers Per capita meat consumption
Per capita meat consumption
represents the total carcass weight of
red and white meat that the average
American consumes in one year.
Health trends, consumer perceptions
and prices help determine per capita
meat consumption. Generally, per
capita meat consumption most closely
reflects industry performance. An
increase in demand for overall meat
products will increase industry sales,
Meat Markets in the USDecember 2019   5
range, while also benefiting from cost
savings associated with economies of
scale. This decline in revenue for the
industry is primarily caused by a steep
decline in the price of red meat at an
annualized rate of 6.2% over the five
years to 2019. Additionally, the price of
poultry meat has declined during the
same period. Players typically charge a
premium for value added products to
compete with big-box retailers, however
declining input costs have helped
competition further reduce prices to
increase price competition. Industry
operators benefit from decreased input
cost in that profitability increases. While
the price of red meat declines, industry
profitability is estimated to increase from
1.7% in 2014 to 2.4% in 2019.
Competition is expected to continue
negatively impacting industry operators
over the five years to 2024. The price of
red meat is expected to continue
declining during the outlook period, in
line with the declining price of poultry.
Per capita meat consumption is expected
to grow only marginally, despite an
increase in disposable income over the
same period, indicating a shift in
consumer preferences away from meat.
Overall, industry revenue is expected to
continue declining. Industry revenue is
forecast to decrease an annualized 0.4%
to $6.7 billion over the five years to 2024.
whereas a decrease in consumption
will reduce sales. Per capita meat
consumption is expected to stagnate
in 2019.
Price of poultry meat
The price of poultry products, such as
chicken, turkey and small game birds, is a
key driver of industry performance, with
its significance growing in recent years.
When poultry prices are high, meat
markets pass on the increased purchasing
WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   6

Industry Performance

Key External Drivers costs to consumers in the form of higher
continued product prices. Even though the price of
poultry meat is expected to increase in
2019, it is projected to decrease during
the five-year period to 2019, representing
a potential threat to the industry.
Price of red meat
Beef and pork products comprise the
largest share of industry revenue.
Therefore, prices of red meat strongly
drive operator’s revenue stream. In the
same way as poultry prices, higher prices
of red meat generally translate to
increased industry revenue. Industry
players will pass the cost to consumers,
who typically purchase meat at a stable
level regardless of prices. The price of red
meat is expected to increase 2019,
representing a potential opportunity for
the industry.
Per capita disposable income
Meat markets and butcher shops typically
charge higher prices for their products
compared with competitive retail
channels. Higher disposable income
levels enable consumers to purchase
greater volumes or more-expensive cuts
of meat. Per capita disposable income is
expected to rise in 2019.
Per capita seafood consumption
Per capita seafood consumption represents
the weight of seafood consumed by the
average American in a single year. Seafood
is increasingly viewed as an alternative
healthier source of protein than many meat
products. As the popularity of this
substitute grows, fewer consumers are
expected to purchase meat. Per capita
seafood consumption is expected to
decrease in 2019.

Per capita meat consumption Price of poultry meat

225 280

220
260
215
Pounds (lb)

Index

210 240

205
220
200

195 200
Year 11 13 15 17 19 21 23 25 Year 11 13 15 17 19 21 23 25

SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Industry Performance
Current Meat markets, comprised of butcher
shops and delicatessens, primarily retail
Performance a variety of fresh, frozen and packaged
meat and poultry products in the United
States. Operators in the Meat Markets
industry usually sell premium products
that are locally sourced or have been
specially treated through different
processes, such as aging, drying, curing
and smoking.
Over the five years to 2019, industry
performance has been hurt by decreasing
input costs that reduce industry revenue
while improving the competitive edge of
low-cost retailers such as supermarkets.
Furthermore, changing food trends, diets
and shopping behaviors have
dramatically reshaped the business of
food retailing in recent years. Growing
health concerns and media coverage
regarding the potential side effects of
consuming certain types of meat have
also placed downward pressure on
industry revenue growth.
Operators in the Meat Market industry
have encountered growing competition
from nontraditional retailers, such as
supercenters and wholesale clubs, in
addition to traditional grocery stores and
Consumer demand Improving economic conditions over the
past five years have led to higher disposable
income for the average American. Per capita
disposable income is expected to increase at
an annualized rate of 2.4% over the five
years to 2019. This increase encourages
consumers to purchase both larger
quantities and higher-quality goods across
all industries. Operators in the Meat Market
industry are no exception. Consumers tend
to frequent butchers and delicatessens for
value-added products and knowledgeable
service. When income is high, consumers
will pay a premium for meat products from
sources they trust, offering high-end goods
and specialized knowledge. This has led to a
trend of gourmet butcher shops, with
Meat Markets in the USDecember 2019   7
Industry revenue
2.50
1.25
% change
0.00
-1.25
-2.50
Year 11 13 15 17 19 21 23 25
SOURCE: WWW.IBISWORLD.COM
supermarkets. These companies have
used economies of scale to place
downward pressure on product prices,
hurting industry operators.
Weak market conditions have caused
industry revenue to decline, despite
rising per capita disposable income and
increasing demand for meat markets’
value-added products. Over the five
years to 2019, industry revenue is
expected to decrease an annualized
0.8% to $6.8 billion, including a 0.5%
increase in 2019.
storefronts emerging in large cities such as
Chicago, New York City and Seattle.
Furthermore, with the growing popularity of
ethnic food, more consumers are seeking
uncommon cuts of meat, including oxtail,
lamb ribs and top blade steak, which are
often difficult to find in supercenters and
wholesale clubs.
The decline in industry revenue has been
slowed by the relative stability of demand
for the industry’s products. Spurred by the
increase in average income, per capita meat
consumption is expected to grow at an
annualized rate of 1.4% over the five years
to 2019. Per capita meat consumption most
closely mirrors industry performance, and
its growth in recent years is a key reason
WWW.IBISWORLD.COM
Industry Performance
Consumer demand revenue has gradually increased. Demand
continued for meat consumption remains generally
stable, as red meat and chicken are
considered staples of the average American
diet. However, as health has become a
greater concern for consumers, many have
sought protein alternatives to the
Competitive retail The industry has encountered increased
channels and prices competition from supermarkets and grocery
stores over the past five years. Additionally,
nontraditional retail industries, such as
warehouse clubs and supercenters, are
fighting for consumer dollars.
Furthermore, the evolution of big-box
retailers such as Costco Wholesale
Corporation and Walmart Inc., which are in
the Warehouse Clubs and Supercenters
industry (IBISWorld report 45291), has also
provided a new avenue for consumers to
purchase meat and poultry. Due to the scale
of their operations, big-box retailers can
offer lower prices and appeal to families
seeking the convenience and bulk quantities
centralized food retailers provide.
Additionally, specialty butcher shops have
also experienced growing competition from
new retailers, such as Whole Foods Market
Inc., that offer a range of all-natural and
organic products. These businesses have
siphoned revenue away from traditional
Profitability Industry profitability has fluctuated over the
five years to 2019. Input prices consistently
dropped between 2015 and 2017 and
declined overall during the period. Declining
input costs and marginal revenue growth
have helped bolster industry profitability
during the period. This volatility, but
ultimate growth in profitability, can be
explained by the overall stability of industry
products. While consumers have
experienced sizeable decreases in industry
good prices, their purchase levels have not
increased significantly enough to strongly
Meat Markets in the USDecember 2019   8
comparatively unhealthy beef and pork
products, somewhat stifling growth. For
instance, per capita seafood consumption is
projected to increase at an annualized rate
of 1.5% during the period, which is faster
than all other industry-relevant products
besides pork.
meat markets and have increasingly forced
operators to exit the industry. Consequently,
industry enterprises are anticipated to
decrease at an annualized rate of 1.0% to
8,166 enterprises over the five years to 2019.
By leveraging economies of scale,
these external competitors have placed
downward pressure on the market retail
prices of meat and poultry. This,
combined with a trend of lowering input
prices over the past five years, has
limited potential revenue growth for
operators. Industry revenue tends to
benefit from higher input prices because
operators can easily pass the high costs
to its customers via higher end good
prices. Unfortunately for industry
operators, the prices of red meat and
poultry have both declined, falling at
annualized rates of 6.2% and 1.2%
respectively, over the five years to 2019,
somewhat offsetting the positive trends
in meat consumption and income levels.
Declining
input costs
and marginal revenue
growth have helped bolster
industry profitability
improve margins. Without generating
higher volume through decreased prices,
industry operators have found it difficult to
stimulate sizeable profit growth. Profit,
WWW.IBISWORLD.COM
Industry Performance
Profitability measured as earnings before interest and
continued taxes, is estimated to account for 2.5% of
revenue in 2019, representing a slight
increase from 1.7% in 2014.
Additionally, rising wage costs further
limited margin growth. As specialized
labor has become more advantageous to
Industry Revenue for the Meat Markets industry is
forecast to decline slowly over the five
Outlook years to 2024. Over the next five years,
industry revenue is expected to decrease
at an annualized rate of 0.4% to $6.7
billion. The price of red meat and the
price of poultry meat both declining,
coupled with competitive pressure from
retailers not in the industry, is expected
to continue pressuring industry revenue
Downstream demand Per capita disposable income is expected to
competition and continue to grow at an annualized rate of
1.9% over the five years to 2024.
prices
Nevertheless, demand for meat products is
expected to taper off during the period due
to increasing healthy eating habits, shown
by an increasing healthy eating index over
the same period. Per capita meat
consumption anticipated to increase an
annualized 0.1%. This development
indicates that demand for industry products,
though stable, has potentially peaked.
Further, external competitors will
likely continue to add new meat products
to their existing lines, to the detriment of
meat markets. For instance, kosher meat
was traditionally only available at butcher
shops due to limited and concentrated
demand within specific regions. Now,
supermarkets stock more kosher
products to stimulate growth in other
areas of their store. Similarly, specialty
grocery stores, such as Whole Foods
Markets Inc. (Whole Foods) and Vitamin
Cottage Natural Food Markets Inc., are
increasingly providing uncommon cuts of
Meat Markets in the USDecember 2019   9
industry operators, they have been forced
to offer higher payments for skilled
workers. Wages are expected to increase
at an annualized rate of 2.4% to total $1.0
billion over the five years to 2019. Overall,
wages’ share of industry revenue has
increased to an estimated 15.4% in 2019.
downward. As a result, the number of
enterprises is expected to continue to
decline as operators consolidate to save
on costs. Furthermore, increasingly
health-conscious consumers are
expected to continue to diversify their
diets and seek alternative protein
sources. Overall, negative trends will
likely increase volatility, while industry
performance declines.
Externalcompetitors will
likely continue to add new
meat products to their
existing lines
meat traditionally only sold at butcher
shops to capture more of the market.
While meat markets are still expected to
benefit from their specialty meat
products, these offerings from external
competitors are expected to further
siphon industry revenue.
Subdued consumer demand for meat
products coupled with enhanced efforts
from external competitors would likely
cause a decline in industry revenue if not
for one different development from the
five-year period to 2019. While input
prices dropped sharply between 2014 and
2019, prices of red meat and poultry are
expected to largely stabilize over the next
five years. Red meat prices are
anticipated to decline an annualized 2.0%
WWW.IBISWORLD.COM
Industry Performance
Downstream demand over the five years to 2024, and poultry
competition and prices are expected to fall an annualized
prices continued 1.9% during the same period. The relative
stability of red meat prices should enable
industry players to more successfully
Opportunities and To increase revenue over the next five
threats years, industry participants will likely
rely on new marketing strategies to
compete with the convenience and
product range offered at large
supermarkets and grocery store chains.
While the products sold at butcher shops
are typical of a higher quality than
products sold at larger retail stores, they
are also more expensive. Therefore,
retailers will need to target consumers
with higher incomes and an interest in
quality food. The quality of meat
products will be an increasingly
important marketing tool moving
forward. Industry establishments may also
benefit from providing consumers with
niche products that are used in popular
ethnic cuisines. Mutton and lamb are
popular among growing Arabic, African
People, participation With industry revenue projected to
increase only slightly and the industry
and pay
expected to lose market share to larger
retailers over the next five years to 2024,
growth in the number of enterprises in
the Meat Markets industry is forecast to
remain relatively flat. Over the next five
years, the number of enterprises is
projected to decrease at an annualized
rate of 0.8% to 7,862 companies. Wages
are also expected to stall, projected to
decrease slowly at an annualized rate of
0.2% to total $1.0 billion during the same
period. Wages are expected to decline as
Meat Markets in the USDecember 2019   10
plan and pass on costs to consumers.
Profit, measured as earnings before
interest and taxes, is expected to increase
slightly from 2.4% in 2019 to 2.5% of
revenue in 2024.
and Caribbean populations, while chicken
hearts, gizzards and other offal are popular
among Hispanic and Latino consumers.
According to the United States
Department of Agriculture, demand for
organic products is increasing rapidly.
This includes demand for organic meat,
which will benefit industry players
offering high quality meat. While demand
for premium meat products may help
industry operators, it also represents the
growing significance of health to
consumer preference. Since consumers
now prefer healthy foods, customers are
expected to continue turning to
alternative protein sources such as
seafood and tofu. Specialty grocery
stores, such as Whole Foods, will
continue to capture market share from
the much smaller meat market operators.
Wagesare expected to
decline as competition sells
premium products
competition sells premium products,
capturing operators’ high paying
customers, reducing their customer base.
Wages as a share of revenue is expected
to increase slightly from 15.4% in 2019 to
15.5% in 2024 as industry revenue is
forecast to decline more rapidly than
total wages.
WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   11

Industry Performance
Life Cycle Stage Industry value added is largely
in line with GDP growth
Enterprise and establishment numbers are
declining indicative of industry consolidation
Industry products have reached a
level of market saturation
WWW.IBISWORLD.COM
Industry Performance
Industry Life Cycle The Meat Markets industry is in the
mature stage of its life cycle. IBISWorld
estimates that the industry’s contribution
Thisindustry to the overall economy, as measured by
is M
 ature industry value added (IVA) is expected to
increase at an annualized rate of 1.4%
over the 10 years to 2024. Comparatively,
US GDP is forecast to grow at an
annualized rate of 2.1% during the same
period. IVA growth is below GDP growth
indicative of an industry in the mature
phase of its life cycle. This is further
supported since the industry is
characterized by stable product offerings
and slowly declining number of
companies during the same period.
In recent years, the number of industry
operators has declined as operators have
attempted to consolidate as a means of
competing with larger grocery retailers
and other external competition. Greater
Meat Markets in the USDecember 2019   12
competition will continue to incentivize
meat markets to close or merge
operations to maintain profitability in the
future. Overall the number of enterprises
is projected to decrease at an annualized
rate of 0.9% over the 10 years to 2024.
Although there is some innovation in
meat products, most often in the form of
prepared or pre-marinated meats, these
goods have not expanded the industry’s
market reach. Furthermore, industry
goods have reached a point of saturation,
and the product range is largely the same
across establishments. Some growth has
come from the introduction of new niche
market goods and advances in cutting
and storage techniques, but even this is
unlikely to spur the industry into a new
growth cycle. Product stability and
market saturation of staple goods
indicate a mature industry.
WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   13

Products & Markets

Supply Chain   |   Products and Services   |   Demand Determinants
Major Markets   |   International Trade   |   Business Locations

Supply Chain KEY BUYING INDUSTRIES

99 Consumers in the US
American households are the primary demand link for the Meat Markets industry.

KEY SELLING INDUSTRIES

42444 Egg & Poultry Wholesaling in the US
Meat markets source poultry products from poultry wholesalers.
42447 Beef & Pork Wholesaling in the US
Meat markets source red meat products from beef and pork wholesalers.
44522 Fish & Seafood Markets in the US
Meat markets source seafood products from fish and seafood wholesalers.

Products and Services Products and services segmentation (2019)

4.2%
Frozen and
packaged meats
14.0%
Pork 26.3%Beef

16.6%
Other meats

19.9%
Other products

19.0%
Total $6.8bn Poultry
SOURCE: WWW.IBISWORLD.COM

In addition to the major products sold in
establishments in the Meat Markets
industry, many operators also provide
value-added services. Value-added
activities may include smoking, glazing,
custom cutting and stuffing. By and large,
people visit meat markets for specific cuts
and specialty items that are unavailable
via other retail channels.
Beef and pork
Beef and pork make up the largest
industry product segment, representing
an estimated 26.3% and 14.0% of
industry revenue respectively. Despite
recent health concerns associated with
red-meat products, demand for beef has
been stable and remained the second-
most consumed meat per capita in the
US, while pork has experienced an uptick
in consumption thanks in part to an
increase in supply. Industry operators
such as butchers have traditionally
specialized in the preparation of red
meats, using this expertise by offering a
variety of cuts to appeal to consumers
across a range of income levels and taste
preferences. In turn, consumers have
consistently viewed industry operators
as trustworthy sources of quality red-
meat products as well as advice.
Together, beef and pork are expected to
account for 40.3% of total industry
revenue in 2019.
WWW.IBISWORLD.COM
Products & Markets
Products and Services Poultry
continued Poultry such as broilers, turkey and other
chicken products are anticipated to
represent 19.0% of industry revenue in
2019. Poultry is the most consumed meat
per capita in the country and remains a
staple of the average American diet.
Poultry’s share of meat market revenue
has increased in recent years due to
favorable health trends and an increase
in overall production. This product
segment has also benefited from the
growing availability of organic, locally
sourced and free-range poultry products
in the United States. Conscious of these
trends, industry operators have
increasingly begun to focus and specialize
in poultry products. Additionally,
butchers have turned to poultry as means
of mitigating any lulls in red meat
consumption. Poultry’s significance and
revenue share is expected to continue to
grow in years to come.
Other meats
Industry operators are well-known for
their quality and variety of meat
products. Consumers have consistently
trusted butcher shops when searching for
specific goods and may believe these
niche products are better sourced by
butchers as opposed to those from large
grocery retailers. In turn, butchers have
continued to generate a sizeable revenue
stream from a variety of meat products
such as sausage, lamb, veal and other
Demand As staples of the average American
Determinants diet, demand for the Meat Market
industry’s products has been relatively
stable and is expected to stay that way
for the foreseeable future. For
individual operators, demand is
strongly influenced by availability of
various products, and freshness and
quality of the goods offered. For the
industry, prices, disposable income
Meat Markets in the USDecember 2019   14
delicatessen items. Furthermore,
different types of preparation methods,
such as curing and smoking, have
stimulated demand for products within
this segment in recent years. Overall,
other meats are estimated to account for
16.6% of industry revenue in 2019.
Other products
While outside the scope of this industry’s
traditional definition, industry operators
often distribute other products that
contribute to overall revenue. This
product segmentation is primarily
comprised of general grocery items that
some establishments will offer in their
stores. The most common, and therefore
revenue-generating products are dairy
goods, fresh produce and a relatively
limited selection of seafood products.
Overall, revenue from other grocery
goods is expected to represent 19.9% of
industry revenue in 2019.
Frozen and packaged meats
Frozen and packaged meat (1.5%) and
poultry (2.7%) make up a small share of
industry revenue. Demand for this
product segment is driven by time-poor
consumers. Quick meal solutions appeal
to consumers with increasingly busy
lifestyles, while frozen goods grant
consumers more time to prepare their
food. Overall this product segment is
expected to account for a combined 4.2%
of industry revenue.
and consumer preferences tend to
drive demand.
Prices
Prices charged by industry operators are
an important determinant of industry
demand. Increases in input prices
typically enable operators to pass on
incurred costs to their consumers in the
form of higher prices of industry goods.
WWW.IBISWORLD.COM
Products & Markets
Demand While this tends to boost revenue, it may
Determinants at times cause consumers to purchase
smaller quantities of goods from meat
continued
markets, purchase less-expensive
products or turn to competitive retail
channels for lower prices. However, meat
consumption generally remains stable
despite fluctuations of price.
Disposable income and
downstream demand
Households and individual consumers are
far and away the largest market for
industry operators. Income is a driving
force for meat and poultry consumption
influencing the quantity and quality of
meats purchased. As disposable income
rises, customers have stronger purchasing
power giving them the ability to purchase
a larger amount of meat, as well as more
value-added and premium meat products.
This increased income also helps shift
consumers to industry operators as
opposed to external competitors. Higher
disposable income also encourages
consumers to eat out more, increasing
demand from food service operators for
meat-market products.
Health concerns
Nutrition and health also play a large role
in driving industry demand. In recent
years, customers have grown increasingly
Major Markets Households and individual consumers
Most meat markets are local butchers
and storefronts that primarily serve the
needs of individual consumers and
households. Consequently, consumers
represent the largest market segment for
the Meat Markets industry by far,
accounting for a combined 84.3% of
industry revenue. Consumers in higher
income brackets tend to purchase
higher-quality meat products as well as
prepared, value-added products that
butcher shops specialize in. However,
Meat Markets in the USDecember 2019   15
health-conscious, seeking products that
provide health benefits or mitigate risks.
This shift in consumer taste has hindered
industry demand as recent studies have
linked the consumption of red meat to a
higher risk of developing Alzheimer’s,
diabetes, heart disease and a host of other
health complications. Consequently,
substitute sources of protein such as
seafood and tofu have experienced
accelerating demand while demand for red
meat and poultry has remained relatively
stable. Furthermore, fears of potential
outbreaks of mad cow disease or bird flu
can also steer consumers away from
industry products. Fortunately, meat and
poultry’s place as a staple of the average
American diet has mitigated some of these
concerns. Additionally, consumers tend to
perceive products purchased from meat
markets to be healthier and fresher than
those purchased from large grocery stores
and retailers.
Seasonality
Demand for meat and poultry tends to
increase in the spring and summer seasons
and decreases in the winter. The warm
weather during these times of the year
provide the ideal environment for backyard
barbeques in the US, including several
“grilling holidays” such as Memorial Day,
the Fourth of July and Labor Day.
more consumers in total fall into the
lower brackets and purchase a higher
percentage of industry products overall.
Consumers’ share of industry revenue
has declined slightly in recent years, as
industry sales to retailers and food
services have grown in significance.
Retailers and wholesalers
Other meat retailers (4.0%) and
wholesalers (4.7%) combine to account
for an anticipated 8.7% of industry
revenue in 2019. These companies may
WWW.IBISWORLD.COM
Products & Markets
Major Markets Major market segmentation (2019)
continued
1.8%
Other
8.7%
Retailers and wholesalers
22.1%
Households and individual consumers
earning more than $100,000
Total $6.8bn
purchase bulk quantities of meat and
poultry from industry operators for future
resale. Generally, despite having already
passed through wholesale distribution
channels, retailers and wholesalers may
nevertheless purchase these goods after
industry operators have made value adding
modifications. Operators in this market
segmentation include specialty stores such
as all-natural grocery stores and ethnic
food stores. Demand from specialty food
stores has increased in recent years
considering consumer trends that have
boosted this retail channel’s popularity.
Furthermore, the growing immigrant
population has boosted demand from
ethnic food stores, while health concerns
have benefited all-natural and organic
grocery stores, increasing this segment’s
share of industry revenue in recent years.
Restaurants and food services
Chain restaurants, single-location
restaurants, hotels, food services and
Meat Markets in the USDecember 2019   16
5.2%
Restaurants and food services
62.2%
Households and individual
consumers earning less than $100,000
SOURCE: WWW.IBISWORLD.COM
other contract feeding entities also
purchase meat and poultry from industry
operators. Meat markets have
particularly benefited from the
emergence of farm-to-table, organic and
all-natural restaurants, particularly in
urban areas. Demand has consistently
been increasing since 2014, as consumers
have been dining out more frequently,
thanks to rising disposable income.
Restaurants will become an increasingly
important market for this industry as
more consumers demand locally sourced
meat when dining out. This segment
represents an estimated 5.2% of industry
revenue in 2019.
Other
Industry operators also sell goods to
farmers, government entities and businesses
that use industry products as inputs. This
market segment however is nearly negligible
and is anticipated to only account for 1.8%
of industry revenue in 2019.
WWW.IBISWORLD.COM
Products & Markets
International Trade Operators in this industry do not engage in
international trade due to the service-based
and localized nature of meat markets.
However, operator’s upstream suppliers
including the Beef Cattle Production
industry (IBISWorld report 11211) engage in
significant international trade.
Meat Markets in the USDecember 2019   17
At the manufacturing level,
meat and poultry exports typically
outweigh imports by a sizeable
margin. For further discussion of red
and white meat trade, refer to the
Meat, Beef and Poultry Processing
industry (31161).
 WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   18

Products & Markets

Business Locations 2019

West
AK
0.1 New
England
ME
Great Mid- 0.4

Lakes Atlantic 1 2
NY 3
WA MT ND 13.4
5 4
1.8 0.5 MN
Rocky
0.5 3.2
WI
OR Mountains SD
0.7
Plains 2.4 MI
4.1
PA
6.4
6
7
1.1 ID IA OH 9 8
0.5 WY 4.0
0.3
NE
0.9
IL IN WV VA
3.5 1.9 0.9

West NV
1.0 0.2
KY
UT MO
0.6 NC
0.4
0.5 CO KS 1.7 2.0
1.4 1.0 TN
SC
Southeast
1.0
CA 0.9
10.9
OK AR GA
0.9 0.7 AL 2.5
AZ MS 0.8
1.6 NM
0.5 Southwest 0.6

TX LA
1.7 FL
8.1 4.3

West Establishments (%)

HI Less than 3%
0.3 Additional States (as marked on map) 3% to less than 10%
1 VT 2 NH 3 MA 4 RI 10% to less than 20%
0.2 0.4 1.9 0.6 20% or more

5 CT 6 NJ 7 DE 8 MD 9 DC
0.9 4.4 0.3 1.3 0.2

SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   19

Products & Markets

Business Locations As with most retail industries,

Distribution of establishments vs. population
establishments in the Meat Markets
industry are located where consumer
30
demand is high and in densely
populated areas. In theory, the more
residents in a region or state, the 20
stronger demand for meat markets
should be. Meat Markets generally

%
adhere to this process with most 10
establishments concentrated in the
Mid-Atlantic, Southeast, and Great
Lakes regions. 0
The Meat Markets industry is the most

West

Great Lakes

Mid-Atlantic

New England

Plains

Rocky Mountains

Southeast

Southwest
concentrated in the Mid-Atlantic region,
which accounts for 25.9% of
establishments but only 15.2% of the
population. New York holds the most Establishments
industry establishments, accounting for Population
13.4% of establishments. A large and SOURCE: WWW.IBISWORLD.COM

ethnically diverse population,

particularly in New York City, helps
account for New York’s high
concentration. The same holds true for
major cities in Pennsylvania (6.3%),
New Jersey (4.4%) and the greater
Washington, DC metro area.
While the Southeast region is the
third-most densely concentrated region
with 16.1% of meat market
establishments, this is significantly less
than the 25.7% of the population that
resides in this region. People in the
Southeast purchase meat products in
competitive retail channels such as
supermarkets, which lowers demand for
meat markets in this region.
Additionally, fish and seafood markets
are heavily concentrated in this area as
seafood is more popular in coastal
states than inland states. Greater
consumption of fish and seafood places
downward pressure on demand for
meat products and therefore, reduces
the need for meat markets.
WWW.IBISWORLD.COM
Competitive Landscape
Market Share Concentration   |   Key Success Factors   |   Cost Structure Benchmarks
Basis of Competition   |   Barriers to Entry   |   Industry Globalization
Market Share The Meat Markets industry exhibits a
Concentration low level of market share concentration.
Most of the industry is highly
fragmented with most operators being
Level
small, independent and privately-owned
Concentration in enterprises with only one storefront.
this industry is L ow Nonemployers, operators who employ
four or less people, are estimated to
account for nearly 40.0% of
establishments in recent years. The two
largest industry players are anticipated
to account for 10.6% of the available
market. This level of fragmentation and
Key Success Factors Being part of a franchising chain
Franchising cuts initial costs for operators
and streamlines business development.
IBISWorld identifies
250 Key Success Attractive product presentation
Factors for a Attractive promotions and displays catch
business. The most the attention of customers leading to
increased sales and boosting revenue.
important for this
industry are: Experienced work force
Consumers are more likely to frequent a
store with a reputation for having
experienced and knowledgeable staff.
Controlling stock
Retailers must maintain adequate stock
levels and ensure top-selling meat
products are available on demand.
Cost Structure The costs of a Meat Markets industry
Benchmarks operator can vary depending on the size,
location, types of products sold and
number of employees specific to the
business. For instance, specialty meat
markets that only sell organic meat
products and other exotic cuts incur
higher purchase costs when compared
with an average butcher shop.
Additionally, wage costs are less
significant for nonemployer operations.
Larger operations will usually incur
Meat Markets in the US December 2019   20
the strength of small companies is
common for industries with low market
share concentration. In recent years,
franchising has gained popularity
among industry players, with many
owner-operated stores opening
franchises to expand their geographic
reach and increase economies of scale
to lower overall operating costs. In the
future, the franchising trend should
help raise overall industry
concentration but should most likely
remain at low levels overall.
Furthermore, the perishable nature of
industry products requires relatively
quick sales.
Marketing of differentiated products
Product differentiation may include
offering ethnic varieties and smoking,
stuffing and custom-cutting meats. Such
value-added activities and products help
owners stay competitive and gain
customer loyalty.
Having a good reputation
A majority of meat markets are
independent, one-store operations that
rely on a history of good service and
word-of-mouth marketing to attain and
retain customers.
higher wage, utility, rent and other
costs, which are offset by their larger
sales volumes.
Wages
Wages are consistently the second-largest
cost for operators in the Meat Markets
industry due to the labor-intensive
nature of operations. In 2019, IBISWorld
expects wages to account for 15.4% of
industry revenue in 2019, an increase
from 13.1% in 2014. Labor tasks include
WWW.IBISWORLD.COM
Competitive Landscape
Cost Structure butchering meat, preparing a variety of
Benchmarks meat products, taking and filling
customer orders, organizing displays and
continued
operating registers. The rise in wage costs
can be attributed to the high employment
dependency within this industry, given
the amount of manual labor required to
execute certain cuts of meat and engage
in consumer-facing activities. Operators
have also placed a premium on hiring
more knowledgeable and skilled
employees to more appropriately assist
customers and prepare products. As a
result, wages have risen.
Purchases
Purchases consistently account for most
of the average operators’ revenue. This
cost category consists of frozen, raw and
cured meat and poultry purchased from
farmers and wholesalers for resale to
consumers. Weather-related effects and
animal disease outbreaks can potentially
Sector vs. Industry Costs
Average Costs of
all Industries in
sector (2019)
100
3.4
8.9
80
Percentage of revenue
60
73.0
40
20
0.9
4.1
8.1
0
Meat Markets in the US December 2019   21
flow through the supply chain to raise or
lower prices during the year. The decline
in purchases as a percent of revenue can
be attributed to the decrease in prices of
red meat and poultry during the period.
In 2019, purchases are expected to
account for 68.3% of revenue in the Meat
Markets industry.
Profit
Industry profit, calculated as earnings
before interest and taxes, is expected to
account for an estimated 2.4% of an
average operator’s revenue in 2019,
representing a slight increase from 1.7%
in 2014. During the period input prices,
such as the price of red meat, have
decreased during the period, helping to
reduce costs and increase margins. The
stability of meat demand has resulted
in stable volumes of products being
sold at lower prices thus hurting
industry profit.
Industry Costs
(2019)
2.4 n Profit
15.4
n Wages
n Purchases
n Depreciation
n Marketing
n Rent & Utilities
n Other
68.3
1.6 1.5 1.3
4.6
6.5
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Competitive Landscape
Cost Structure Depreciation
Benchmarks Over time, meat markets must deal with
depreciating assets and other non-annual
continued
expenses resulting from the wear and
tear of assets such as cold-storage display
cases, refrigerators, spraying systems,
cutting machines and office supplies.
Depreciation varies among operations
and depends on the quantity of
depreciable assets owned. Establishments
that butcher their meat and prepare other
meat products on-site are more capital
intensive and have higher depreciation
costs. Overall depreciation costs are
expected to account for 1.5% of industry
revenue in 2019.
Marketing
Marketing costs, accounting for an
estimated 1.3% of industry revenue, are
mainly attributable to operators’
attempts to gain reputation and target
local customers.
Basis of Competition The Meat Markets industry is subject to
internal and external competition.
Level & Trend Operators compete with other meat
retailers within the industry. Externally,
 ompetition
C in this meat markets compete with larger
industry is H
 ighand supermarkets and grocery stores and
the trend is S teady other retail channels with meat counters.
Competition is likely to remain high as
the allure of one-stop shopping attracts
customers to supermarkets and grocery
stores and away from more-traditional
and smaller meat markets.
Internal competition
Meat markets compete with one another
based on price, the range of products
stocked, the range of services provided,
quality of goods, product knowledge and
location. Consumers purchase meat and
poultry from industry operators due to the
freshness of goods and the variety of meat
products offered. Customers are willing to
pay a premium for goods that are soundly
Meat Markets in the US December 2019   22
Rent
Rent costs stem from the need for retail
space. Rent costs have slightly declined to
3.0% of industry revenue in 2019.
Utilities
Utility costs can be largely attributed to
the need for cold storage to keep meant
and poultry goods from going bad. Utility
costs have largely remained stable at
1.6% of industry revenue in 2019.
Other
Recently, operators have invested in
efficiency-boosting software programs.
Furthermore, operators spend on repair
and maintenance of store equipment.
Miscellaneous costs are expected to
account for the remaining 6.5% of overall
industry costs. They primarily include
distribution costs as well as various
administrative, legal, accounting and
insurance costs.
sourced and butchered with care. In recent
years, the growth of the all-natural and
organic food trends has spurred demand for
organic and locally sourced meat markets.
Furthermore, providing a multitude of
value-added, ready-to-cook products
enables store owners to target customers
who value convenience, which is a growing
concern of the consumer segments. Location
is a key factor in attracting the time-poor
consumer. Finally, while the quality and
variety of products is important, having a
good reputation and excellent customer
service is particularly important for one-
store operators. Consumers turn to
knowledgeable store owners and butchers
for advice on how to best treat meat.
External competition
The entrance of nontraditional retailers
such as Walmart Inc., Costco Wholesale
Corporation and Target Corporation into
the food sector has hurt industry sales in
WWW.IBISWORLD.COM
Competitive Landscape
Basis of Competition recent years. The larger scale of these
continued players’ operations enables them to
purchase in bulk from wholesalers at much
lower prices than small meat markets and
pass on the cost savings to customers in the
form of lower prices. Meat markets also
encounter competition from supermarkets
and grocery stores. Large supermarkets
stock a variety of frozen and fresh meat,
Barriers to Entry The Meat Markets industry exhibits low
barriers to entry. Start-up costs
Level & Trend associated with establishing a storefront
and marketing comprise a sizeable share
 arriers to Entry
B of initial funding requirements. However,
in this industry are in total the industry is fragmented with
Lowand S  teady low capital investments needed to get up
and running. While the top two industry
operators account for a little over 10.6%
of industry revenue in 2019, most of the
industry is comprised of small,
individually owned businesses or small
franchise chains.
Initial purchases of capital such as
cash registers, scales, and cold storage
units are particularly constraining to new
entrants. Generally, establishment space
is rented, not purchased, and operators
typically use less square footage to keep
overhead costs low.
The industry generally lacks large
players that could target smaller
operators for acquisition or price
compete out of the market. Also,
product differentiation is relatively
low, and most markets stock similar
meat and poultry products. Despite
low product differentiation, there are
niche markets that newer entrants
have successfully targeted including
Meat Markets in the US December 2019   23
poultry and seafood products.
Furthermore, grocery stores offer a larger
variety of grocery products appealing to
customers looking to purchase all their
goods from a single store. Online retailers,
such as Fresh Direct and Amazon Fresh,
have also become a threat to meat markets,
as consumers can easily purchase food
from home.
Barriers to Entry checklist
Competition High
Concentration Low
Life Cycle Stage Mature
Capital Intensity Low
Technology Change Medium
Regulation and Policy Medium
Industry Assistance Low
SOURCE: WWW.IBISWORLD.COM
organic and ethnic meat products, and
darker and more unconventional cuts
of meat. However, external
competitors’ continued extraction of
industry revenue may discourage small
meat market players to enter the
industry altogether.
Obtaining high-quality meat and
poultry from wholesalers and farmers
may also hinder market entrance.
Consumers tend to visit meat markets for
the variety and quality of products.
Therefore, obtaining contracts from
suppliers of high-quality meat is integral
for prospective industry players.
Reputation needed to win these contracts
from more established internal
competitors is key to market entrance.
WWW.IBISWORLD.COM Meat Markets in the US December 2019   24

Competitive Landscape

Industry The Meat Markets industry exhibits a enterprises that service a limited
Globalization very low level of globalization. Due to the geographic area within the United States.
local nature of operations, international Even industry leader Omaha Steaks
Level & Trend trade does not exist in this industry. All International Inc. limits its online sales
establishments are US based, only and shipping to customers in the United
 lobalization
G in this operating domestically. Most industry States, Canada, Puerto Rico and the US
industry is L owand operators are small, owner-operated Virgin Islands.
the trend is S  teady
WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   25

Major Companies
Omaha Steaks International Inc. | Other Companies

Major Players
(Market Share)

91.8%
Other

Omaha Steaks International Inc. 8.2% SOURCE: WWW.IBISWORLD.COM

Player Performance
Omaha Steaks
International Inc.
Market Share: 8.2%
Originally founded in 1917 as Table Meat
Supply Co., Omaha Steaks International
Inc. (Omaha Steaks) emerged in 1966 to
sell premium meats and gourmet food
products to a broader market. Since its
inception as a food service provider,
Omaha Steaks has grown to operate two
manufacturing plants, a distribution center
and a freezer warehouse. The company
sells 400 premium products through more
than 80 brick-and-mortar retail stores in
the United States and globally through
online, mail order and telemarketing
channels. Omaha Steaks is a privately held
family business and employs more than
2,000 full-time workers.
Historically, demand for meat
products has fueled the company’s
expansion and growth. However, the
company recently rebranded its seafood
product line to World Port Seafood to
appeal to consumers seeking alternatives
sources of protein. Additionally, other
factors that have sustained growth
include incentive programs for repeat
customers, various sales promotions and
joint affiliations with other food retailers.
The company implements various
marketing strategies to lure consumers,
including catalogs and direct mail,
business-to-business gifts and its
company website.
Financial performance
Financial information on Omaha Steaks is
limited because it is a privately-owned
company. However, IBISWorld forecasts
that the company’s revenue will reach
$555.8 million in 2019, capturing 8.2% of
industry revenue. Furthermore, over the
five years to 2019, Omaha Steaks’ revenue
is expected to increase at an annualized
rate of 3.1% as a result of increased sales
of traditional product lines and new goods

Omaha Steaks International Inc. (US industry-specific segment) -

financial performance*
Revenue Operating Income
Year ($ million) (% change) ($ million) (% change)
2014 477.6 0.061246352 8.11853459 -0.469376824
2015 489.4 0.024759567 20.55417244 1.53175893
2016 474.8 -0.029725122 18.51868308 -0.09903047
2017 498.8 0.050493169 11.97153851 -0.353542665
2018 524.1 0.05078036 12.7215679 0.062651045
2019 555.8 0.060364381 13.44458585 0.056834028

*Estimates
SOURCE: IBISWORLD
WWW.IBISWORLD.COM
Major Companies
Player Performance offered. The company typically earns
continued healthy profit margins, as it owns supply
chain links from meat processing to
distribution and sales. Omaha Steaks’
Other Company The Honey Baked Ham Company (Honey
Performance Baked Ham) was established in Detroit in
1957. The company sells dry, cured,
hickory-smoked, spiral-sliced and
Honey Baked Ham honey- and spice-glazed hams and turkey
Company breasts, as well as side dishes, such as
Market Share: 2.4% soups, salads and desserts, through its
franchises. To purchase a single Honey
Baked Ham franchise, the potential
franchisee must have a net worth of at
least $300,000 with a minimum of
Meat Markets in the USDecember 2019   26
control of every stage of the production
and distribution processes is expected to
help the company maintain an estimated
profit margin of 2.4% in 2019.
$125,000 in liquid assets. For a multi-
franchise operation, the same
requirements apply, multiplied by the
number of franchised stores. Currently,
the company operates over 201 stores
and sells its products online. Over the five
years to 2019, IBISWorld estimates
Honey Baked Ham’s revenue to decrease
at an annualized rate of 2.3% to $162.9
million in 2019, capturing 2.4% of
industry revenue.
WWW.IBISWORLD.COM Meat Markets in the USDecember 2019   27

Operating Conditions
Capital Intensity   |   Technology & Systems   |   Revenue Volatility
Regulation & Policy   |   Industry Assistance

Capital Intensity The Meat Markets industry exhibits a

low to medium level of capital intensity. Capital Intensity
Capital units per labor unit
In 2019, industry operators typically
Level
invest $0.10 for every dollar of capital 0.5
The levelof capital for every dollar spent on labor. Capital
intensity is L ow expenditure comes in the form of 0.4

fixtures and fittings, cash registers, food 0.3

and cold-storage units, as well as
displays. Since most industry tasks are 0.2

generally labor intensive, operators 0.1

heavily depend on labor rather than
capital goods. Duties undertaken by 0.0
Economy Retail Trade Meat Markets
meat market employees include
butchering meat, maintaining store Dotted line shows a high level of capital intensity
displays, processing purchases and SOURCE: WWW.IBISWORLD.COM

maintaining computer systems. Unlike

capital costs, labor costs are an integral remained largely stable since $0.09 for
and important part of operating every dollar of capital for every dollar
expenditure. Overall, this figure has spent on labor in 2014.
WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity Due to the perishability of meat,
continued industry capital costs are still important
to performance. Climate-control systems
are particularly integral to everyday
tasks, requiring operators to invest
capital in cooling and refrigerating
equipment. Over the past 20 years, meat
markets have undergone considerable
change with the implementation of
Technology and The Meat Markets industry relies on
Systems commercial meat and food processing
equipment, such as smokehouse
Level controllers, sausage stuffers and
autoclaves, to produce meat products.
The level
of Other industry technology includes
technology change computerized point-of-sale (POS) systems
is M
 edium that control and record merchandising,
distribution, sales and stock markdowns.
POS systems include computerized
registers and credit card systems. In
addition, the introduction of electronic
data interchange (EDI) has improved
distribution, particularly for those
operations that engage in e-commerce. A
popular form of EDI includes barcode
scanning. Barcode scanning offers the
advantages of higher labor productivity,
speedy data transfers, greater control over
the distribution process, and reduced
errors in the supply chain.
Revenue Volatility The Meat Markets industry experienced
low revenue volatility over the five years
to 2019. Since meat and meat products
Level
are staples of the average American diet,
The level of demand remains stable despite some
volatility is L ow price fluctuations. Generally,
consumption patterns are largely
unaltered by price changes, unless a steep
increase occurs. However, when prices do
rise, consumers may purchase smaller
volumes of industry products, or eat meat
less frequently. Overall, the industry’s
output depends on economic conditions,
Meat Markets in the USDecember 2019   28
computer scanning technology that has
simplified labor tasks and minimized
human errors made when processing
purchases. The enhanced efficiencies
have produced lowering costs. Over the
next five years, increased investment in
point-of-sale systems and home
equipment is expected to increase this
industry’s capital expenditures.
Technological advances have promoted
online retail in recent years. Omaha
Steaks International Inc., and Honey
Baked Ham Company (the two largest
players in the industry) operate
sophisticated websites for online
purchases of meat products.
Furthermore, the onset of mobile
application technology has prompted
Omaha Steaks to develop an app
available in the google play store and
Apple app store. The app contains
recipes, cooking timers, photos and
more. Likewise, large competitors are
active on social media platforms
including Twitter, Facebook and
Foursquare. Social media enables meat
markets to promote special products,
offer discounts and learn about their
consumers’ preferences to adjust their
product lines accordingly.
red meat prices and competition from
other retail channels. Heightened
competition from meat counters at
supermarkets and natural food stores can
pressure meat markets to charge lower
prices and, consequently, hamper
revenue growth. Furthermore, industry
performance can be tied to the popularity
of substitute products, such as seafood,
which has risen in popularity due to its
associated health benefits.
Finally, outbreaks of mad cow disease
or bird flu can steer consumers away
WWW.IBISWORLD.COM
Operating Conditions
Revenue Volatility from meat markets. For example, former
continued industry player Hallmark/Westland Meat
Packing Company recalled 143.0 million
pounds of beef prior to the period
significantly affecting industry revenue
and contributing to the company’s
eventual exit from the industry. Other
issues regarding meat quality can also
Regulation and Policy Meat markets have a moderate level of
regulation. Regulations relevant to the Meat
Markets industry largely stem from
Level & Trend individual states, as each has specific rules
 he level of
T imposed on operators. State laws primarily
Regulation is ensure consumers are not disadvantaged
Mediumand the with unfair meat pricing. Federal laws make
sure operators comply with the
trend is S
 teady
implementation of fair practices in
employment and product handling. For
example, food retailers must adhere to the
Federal Food, Drug and Cosmetic Act
regarding the receipt, storage and sale of
meat products. More recently, product
labeling has become a topic of importance as
consumer preferences have shifted. Meat
markets must also adhere to sanitation
requirements for cold and dry products.
While the industry experiences a
moderate level of regulation, its upstream
suppliers including Beef Cattle Production
Meat Markets in the USDecember 2019   29
prompt recalls. For example, in October
2014, Sam Kane Beef Processors, located
in Texas, recalled over 60,000 pounds of
beef due to reports that consumers found
shards of metal within the meat. These
relatively isolated cases have the
capability of decreasing demand across
the entirety of the industry.
industry (IBISWorld report 11211), are
more susceptible to more extensive
regulations and licensing requirements.
Nutrition labeling
The US Food Safety and Inspection
Service’s rules regarding nutrition
labeling for meat products went into
effect on January 1, 2012. Under these
regulations, nutrition information must
be applied to most individual packages of
USDA-defined “major cuts” or on signage
near relevant product displays. Failure to
do so could incur negative publicity
surrounding allegations of mislabeling as
well as punishment and fines. Meat is
also given grades for differing criteria.
Beef carcasses are graded on quality and
yield, accounting for tenderness, flavor
and available useable lean meat on the
carcass. Meanwhile, poultry is graded
WWW.IBISWORLD.COM
Operating Conditions
Regulation and Policy from A to C with grade A being the only
continued acceptable rating for retail level.
However, the suppliers from which meat
markets source their products incur higher
production costs in complying with the
regulations. Higher upstream costs could
be passed onto meat markets in the form of
Industry Assistance Although the Meat Markets industry does
not receive direct assistance, regulations on
upstream supply channels may indirectly
Level & Trend benefit meat markets. Since retail operators
 he level of
T purchase goods from importers and
Industry Assistance wholesalers after tariffs have been applied,
is L owand the fluctuations in the tariff rate alter not only
where goods are sourced from but
trend is S teady
purchase price as well. Furthermore, a
decline in the tariff rate will reduce
purchase costs, which can be passed onto
consumers in the form of lower retail
prices. This enables the retailer to charge
competitive prices against both internal
and external competitors.
Additionally, while the Meat Markets
industry does not receive direct
government subsidies, the industry’s
upstream markets receive substantial
direct and indirect subsidies from the US
government. According to the Cato
Institute, most of the subsidies that cattle
ranchers receive are indirect as they are
in the form of artificially subsidized
Meat Markets in the USDecember 2019   30
higher purchasing costs. Also, meat
markets may encounter pressure from
consumers who become familiar with
nutrition labeling at other retail outlets.
The growing frequency of such labels may
encourage similar labeling from otherwise
exempt stores to remain competitive.
feeder grain. However, lower input costs
for cattle and swine ranchers enable them
to charge lower prices to their
downstream markets, which ultimately
benefits industry profitability and
operator competitiveness.
Country of origin labeling
As part of the 2008 Farm Bill, mandatory
Country of Origin Labeling (COOL) for
red meat products went into effect in
2009. As the name of the bill implies the
law aims to provide consumers with the
national origin of food products. In May
2015 the World Treaty Organization
(WTO) upheld complaints from Canada
and Mexico that COOL provides an unfair
advantage for US products and goes
against WTO regulations. The rule also
prohibited combining muscle cut meats
from different countries. Most recently,
in February 2016, the US repealed COOL
requirements for muscle cuts and
grounded beef and pork.
WWW.IBISWORLD.COM Meat Markets in the US December 2019   31

Key Statistics
Industry Data Industry Establish- Per capita meat
Revenue Value Added ments Enterprises Employment Wages Domestic consumption
($m) ($m) () () () Exports Imports ($m) Demand (lb)
2011 6,761.3 1,323.9 9,130 8,644 43,623 -- -- 979.1 N/A 253.7
2012 6,851.7 1,156.6 8,925 8,577 37,479 -- -- 834.6 N/A 251.2
2013 6,975.5 1,269.9 9,516 9,063 41,252 -- -- 921.1 N/A 252.8
2014 7,081.6 1,133.6 9,042 8,600 41,784 -- -- 928.2 N/A 250.1
2015 7,035.8 1,359.4 8,920 8,494 42,761 -- -- 986.5 N/A 261.5
2016 7,025.2 1,454.4 8,798 8,388 46,321 -- -- 1,068.0 N/A 265.8
2017 6,906.0 1,331.7 8,702 8,301 45,833 -- -- 1,055.4 N/A 269.9
2018 6,765.9 1,306.6 8,583 8,192 45,223 -- -- 1,039.9 N/A 267.5
2019 6,802.1 1,312.2 8,559 8,166 45,414 -- -- 1,044.5 N/A 267.7
2020 6,755.8 1,306.8 8,508 8,116 45,434 -- -- 1,043.5 N/A 268.2
2021 6,733.7 1,303.8 8,417 8,025 45,378 -- -- 1,041.8 N/A 268.7
2022 6,726.1 1,306.5 8,361 7,970 45,399 -- -- 1,041.9 N/A 268.7
2023 6,708.2 1,308.5 8,306 7,916 45,349 -- -- 1,040.4 N/A 268.8
2024 6,680.8 1,303.3 8,252 7,862 45,151 -- -- 1,036.0 N/A 268.9
2025 6,645.0 1,297.0 8,197 7,809 44,927 -- -- 1,030.7 N/A 268.9
Sector Rank 54/63 55/63 54/63 48/63 54/63 N/A N/A 55/63 N/A N/A
Economy Rank 575/694 608/694 335/694 311/694 463/694 N/A N/A 562/694 N/A N/A

Annual Change Industry Establish- Domestic Per capita meat

Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand consumption
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2012 1.3 -12.6 -2.2 -0.8 -14.1 N/A N/A -14.8 N/A -1.0
2013 1.8 9.8 6.6 5.7 10.1 N/A N/A 10.4 N/A 0.6
2014 1.5 -10.7 -5.0 -5.1 1.3 N/A N/A 0.8 N/A -1.1
2015 -0.6 19.9 -1.3 -1.2 2.3 N/A N/A 6.3 N/A 4.6
2016 -0.2 7.0 -1.4 -1.2 8.3 N/A N/A 8.3 N/A 1.7
2017 -1.7 -8.4 -1.1 -1.0 -1.1 N/A N/A -1.2 N/A 1.5
2018 -2.0 -1.9 -1.4 -1.3 -1.3 N/A N/A -1.5 N/A -0.9
2019 0.5 0.4 -0.3 -0.3 0.4 N/A N/A 0.4 N/A 0.0
2020 -0.7 -0.4 -0.6 -0.6 0.0 N/A N/A -0.1 N/A 0.2
2021 -0.3 -0.2 -1.1 -1.1 -0.1 N/A N/A -0.2 N/A 0.2
2022 -0.1 0.2 -0.7 -0.7 0.0 N/A N/A 0.0 N/A 0.0
2023 -0.3 0.2 -0.7 -0.7 -0.1 N/A N/A -0.1 N/A 0.0
2024 -0.4 -0.4 -0.7 -0.7 -0.4 N/A N/A -0.4 N/A 0.0
2025 -0.5 -0.5 -0.7 -0.7 -0.5 N/A N/A -0.5 N/A 0.0
Sector Rank 41/63 38/63 43/63 45/63 40/63 N/A N/A 40/63 N/A N/A
Economy Rank 602/694 573/694 569/694 557/694 556/694 N/A N/A 566/694 N/A N/A

Key Ratios Imports/ Exports/ Revenue per Share of the

IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy
(%) (%) (%) ($’000) (%) per Est. ($) (%)
2011 19.58 N/A N/A 154.99 14.48 4.78 22,444.58 0.01
2012 16.88 N/A N/A 182.81 12.18 4.20 22,268.47 0.01
2013 18.21 N/A N/A 169.09 13.20 4.34 22,328.61 0.01
2014 16.01 N/A N/A 169.48 13.11 4.62 22,214.24 0.01
2015 19.32 N/A N/A 164.54 14.02 4.79 23,070.09 0.01
2016 20.70 N/A N/A 151.66 15.20 5.26 23,056.50 0.01
2017 19.28 N/A N/A 150.68 15.28 5.27 23,027.08 0.01
2018 19.31 N/A N/A 149.61 15.37 5.27 22,994.94 0.01
2019 19.29 N/A N/A 149.78 15.36 5.31 22,999.52 0.01
2020 19.34 N/A N/A 148.69 15.45 5.34 22,967.38 0.01
2021 19.36 N/A N/A 148.39 15.47 5.39 22,958.26 0.01
2022 19.42 N/A N/A 148.16 15.49 5.43 22,949.84 0.01
2023 19.51 N/A N/A 147.92 15.51 5.46 22,942.07 0.01
2024 19.51 N/A N/A 147.97 15.51 5.47 22,945.23 0.01
2025 19.52 N/A N/A 147.91 15.51 5.48 22,941.66 0.01
Sector Rank 20/63 N/A N/A 43/63 13/63 30/63 35/63 55/63
Economy Rank 512/694 N/A N/A 505/694 388/694 465/694 603/694 608/694

Figures are in inflation-adjusted 2019 dollars. Rank refers to 2019 data. SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Meat Markets in the US December 2019   32

Industry Financial Ratios

Apr 2017 - Mar 2018 by company revenue
Apr 2014 - Apr 2015 - Apr 2016 - Apr 2017 - Small Medium Large
Mar 2015 Mar 2016 Mar 2017 Mar 2018 (<$10m) ($10-50m) (>$50m)

Liquidity Ratios
Current Ratio 1.1 1.6 2.0 2.6 3.4 n/a n/a
Quick Ratio 0.5 0.8 1.2 0.8 1.3 n/a n/a
Sales / Receivables (Trade Receivables
Turnover) n/c 551.6 186.0 112.9 n/c n/a n/a
Days’ Receivables 0.4 0.7 2.0 3.2 0.4 n/a n/a
Cost of Sales / Inventory (Inventory Turnover) 24.1 29.7 16.8 17.2 31.7 n/a n/a
Days’ Inventory 15.1 12.3 21.7 21.2 11.5 n/a n/a
Cost of Sales / Payables (Payables Turnover) 41.3 40.2 39.7 39.7 95.0 n/a n/a
Days’ Payables 8.8 9.1 9.2 9.2 3.8 n/a n/a
Sales / Working Capital 86.3 35.3 23.3 20.2 24.0 n/a n/a

Coverage Ratios
Earnings Before Interest & Taxes (EBIT) /
Interest 2.7 6.5 7.4 11.3 5.3 n/a n/a
Net Profit + Dep., Depletion, Amort. / Current
Maturities LT Debt n/a n/a n/a n/a n/a n/a n/a

Leverage Ratios
Fixed Assets / Net Worth 2.0 1.4 1.0 0.6 0.5 n/a n/a
Debt / Net Worth 3.9 2.4 2.1 1.4 1.2 n/a n/a
Tangible Net Worth 2.2 15.9 23.3 30.2 26.5 n/a n/a

Operating Ratios
Profit before Taxes / Net Worth, % 15.4 35.8 48.1 24.2 33.0 n/a n/a
Profit before Taxes / Total Assets, % 6.9 12.0 10.7 9.7 9.7 n/a n/a
Sales / Net Fixed Assets 18.3 19.1 15.8 19.6 24.8 n/a n/a
Sales / Total Assets (Asset Turnover) 4.9 5.2 4.6 4.5 5.6 n/a n/a

Cash Flow & Debt Service Ratios (% of sales)

Cash from Trading 28.0 32.2 44.9 39.8 40.5 n/a n/a
Cash after Operations 3.4 2.4 5.1 4.4 4.3 n/a n/a
Net Cash after Operations 3.6 2.4 5.2 3.6 3.6 n/a n/a
Cash after Debt Amortization 1.1 1.8 2.9 0.6 0.8 n/a n/a
Debt Service P&I Coverage 3.4 5.5 3.4 5.0 5.0 n/a n/a
Interest Coverage (Operating Cash) 6.0 6.0 5.6 10.8 7.7 n/a n/a

Assets, %
Cash & Equivalents 16.3 18.2 23.1 20.6 25.3 n/a n/a
Trade Receivables (net) 6.2 10.5 8.3 9.2 6.4 n/a n/a
Inventory 20.1 22.7 17.1 20.9 18.2 n/a n/a
All Other Current Assets 1.9 0.9 2.4 4.8 4.7 n/a n/a
Total Current Assets 44.5 52.4 51.0 55.5 54.5 n/a n/a
Fixed Assets (net) 34.0 32.1 29.8 28.3 31.9 n/a n/a
Intangibles (net) 14.1 9.7 11.2 7.5 4.6 n/a n/a
All Other Non-Current Assets 7.4 5.9 8.0 8.7 8.9 n/a n/a
Total Assets 100.0 100.0 100.0 100.0 100.0 n/a n/a
Total Assets ($m) 553.5 656.4 1,072.5 922.9 15.2 29.7 878.0

Liabilities, %
Notes Payable-Short Term 14.4 14.3 6.6 8.3 8.0 n/a n/a
Current Maturities L/T/D 2.5 3.6 3.6 2.6 3.1 n/a n/a
Trade Payables 16.7 13.1 12.5 8.8 6.6 n/a n/a
Income Taxes Payable 0.1 0.1 0.2 0.1 0.1 n/a n/a
All Other Current Liabilities 12.5 9.3 9.4 12.2 14.3 n/a n/a
Total Current Liabilities 46.3 40.4 32.3 32.0 32.2 n/a n/a
Long Term Debt 18.0 19.4 23.5 22.0 28.2 n/a n/a
Deferred Taxes n/a n/a 0.1 0.1 n/a n/a n/a
All Other Non-Current Liabilities 19.5 14.7 9.6 8.3 8.6 n/a n/a
Net Worth 16.3 25.6 34.5 37.7 31.1 n/a n/a
Total Liabilities & Net Worth ($m) 553.5 656.4 1,072.5 922.9 15.2 29.7 878.0

Maximum Number of Statements Used 63 58 34 39 27 4 8

Source: RMA Annual Statement Studies, rmahq.org. RMA data for all industries is derived directly from more
than 260,000 statements of member financial institutions’ borrowers and prospects.
Note: For a full description of the ratios refer to the Key Statistics chapter online.
WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon BROILERA young chicken that is bred and raised for
commercial slaughter.
ELECTRONIC DATA INTERCHANGE (EDI)The
transmission of data between businesses from one
computer system to another.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity. High
capital intensity is more than $0.333 of capital to $1 of
labor; medium is $0.125 to $0.333 of capital to $1 of labor;
low is less than $0.125 of capital for every $1 of labor.
CONSTANT PRICESThe dollar figures in the Key Statistics
table, including forecasts, are adjusted for inflation using
the current year (i.e. year published) as the base year. This
removes the impact of changes in the purchasing power of
the dollar, leaving only the “real” growth or decline in
industry metrics. The inflation adjustments in IBISWorld’s
reports are made using the US Bureau of Economic
Analysis’ implicit GDP price deflator.
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to industry
revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists of
one or more establishments that are under common
ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single physical
location where business is conducted or where services or
industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTSTotal value of industry goods and services
brought in from foreign countries to be sold in the United
States.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players account
for more than 70% of industry revenue. Medium is 40% to
70% of industry revenue. Low is less than 40%.
Meat Markets in the USDecember 2019   33
POINT-OF-SALEThe location where a transaction
occurs at a retail establishment or store.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies on
production; all other operating income from outside the
firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and capital
work done by rental or lease. Receipts from interest
royalties, dividends and the sale of fixed tangible assets are
excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is also
described as the industry’s contribution to GDP, or profit
plus wages and depreciation.
INTERNATIONAL TRADEThe level of international trade
is determined by ratios of exports to revenue and imports
to domestic demand. For exports/revenue: low is less than
5%, medium is 5% to 20%, and high is more than 20%.
Imports/domestic demand: low is less than 5%, medium is
5% to 35%, and high is more than 35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an industry’s
life cycle by considering its growth rate (measured by IVA)
compared with GDP; the growth rate of the number of
establishments; the amount of change the industry’s
products are undergoing; the rate of technological change;
and the level of customer acceptance of industry products
and services.
NONEMPLOYING ESTABLISHMENTBusinesses with no
paid employment or payroll, also known as nonemployers.
These are mostly set up by self-employed individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding interest
and tax.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate volatility
is ±3% to ±10%; and low volatility is less than ±3%.
WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
included in this figure.
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

At IBISWorld we know that industry intelligence

is more than assembling facts
It is combining data with analysis to answer the
questions that successful businesses ask
Identify high growth, emerging & shrinking markets
Arm yourself with the latest industry intelligence
Assess competitive threats from existing & new entrants
Benchmark your performance against the competition
Make speedy market-ready, profit-maximizing decisions

Who is IBISWorld?
We are strategists, analysts, researchers, and marketers. We provide
answers to information-hungry, time-poor businesses. Our goal is to
provide real world answers that matter to your business in our 700 US
industry reports. When tough strategic, budget, sales and marketing
decisions need to be made, our suite of Industry and Risk intelligence
products give you deeply-researched answers quickly.

IBISWorld Membership
IBISWorld offers tailored membership packages to meet your needs.

Disclaimer
This product has been supplied by IBISWorld Inc. (‘IBISWorld’) solely for use
by its authorized licenses strictly in accordance with their license agreements
with IBISWorld. IBISWorld makes no representation to any other person
with regard to the completeness or accuracy of the data or information
contained herein, and it accepts no responsibility and disclaims all liability
(save for liability which cannot be lawfully disclaimed) for loss or damage
whatsoever suffered or incurred by any other person resulting from the use
of, or reliance upon, the data or information contained herein. Copyright in
this publication is owned by IBISWorld Inc. The publication is sold on the
basis that the purchaser agrees not to copy the material contained within it
for other than the purchasers own purposes. In the event that the purchaser
uses or quotes from the material in this publication – in papers, reports, or
opinions prepared for any other person – it is agreed that it will be sourced
to: IBISWorld Inc.

Copyright 2020 IBISWorld Inc