The COVID-19 pandemic has shifted at-home food consumption to rates not seen since the early 1980s. The "great grocery grab of 2020" also diverted massive volumes of meat and other food originally intended for restaurants into retail food distribution channels and grocery stores.
U.S. animal protein supplies have returned to normal and foodservice sales have improved since the onset of the pandemic, but may not return to pre-pandemic levels until the second half of 2022, according to a new report from CoBank’s Knowledge Exchange.
“Trends in consumer demand for at-home and away-from-home consumption are central to the profitability and viability of the U.S. animal protein supply chain,” said Will Sawyer, lead animal protein economist with CoBank. “As the U.S. foodservice sector climbs out of the hole left by 2020, the animal protein sector will not only need to realign itself with the survivors of the last year, but also remain flexible.”
Full-service restaurants however continue to face double-digit declines in sales. In November, full-service restaurant sales were down 36% compared to last year while total foodservice sales were down 17%. In-restaurant dining will be vulnerable as long as consumers remain wary of dining indoors and COVID-19 cases remain elevated.
In the limited-service restaurant channels, ground beef has performed quite well, but the beef sector continues to be hurt by the depressed full-service restaurants, hotels, and education channels. High-value steaks and roasts that are primarily sold in these channels only make up a quarter of the volume of beef sold through foodservice but account for nearly half of beef sales.
The beef and pork sectors have some flexibility to adapt, as major packers sell their products to a variety of retail, foodservice and export customers. In the poultry sector, however, many integrators and poultry plants focus either on retail or foodservice, but not necessarily both. Poultry producers that focus on retail and fast-food chains have fared reasonably well during the pandemic. Others will need to continue their focus on cost and supply reduction until foodservice demand normalizes which could easily be one or two years away.
Click the download button below to download the report.