There’s big business in bacon.
Many consumers are still indulging in traditional selections despite the health implications, while launches of products with better-for-you claims as well as convenience-oriented pre-cooked options are contributing to category expansion.
Refrigerated bacon dollar sales totaled $4.9 billion for the 52 weeks ended July 14, 2019, a 2.1% increase from the year-earlier period, reports Information Resources Inc. (IRI), a Chicago-based market research firm. Unit sales totaled 969.4 million, a 3% increase. Figures are for total U.S. multi-outlet retailers, including grocery, drug, mass market, military and select club and dollar stores.
“Other categories defined as ‘not as good for you’ have been taking it on the chin, but that is not the case with bacon,” Jim Wisner, president of Wisner Marketing Group Inc., a Lake Forest, Ill.-based retail consultancy, told Supermarket News. “Most people are not giving it up, though they might eat bacon in moderation or move to better-for-you alternatives, including natural, organic, reduced sodium, reduced or no sugar, uncured and turkey bacon.”
Newer flavors also are luring shoppers, as well as center cut and thick cut varieties, he said.
For example, Springdale, Ark.-based Tyson Foods Inc. has been focusing on flavor differentiation in recent years for its Wright Brand bacon by launching such selections as Barrel Aged Bourbon, Oak Barrel Smoked, Double Smoked, Sweet BBQ and most recently Cowboy Rub Bacon, a blend of Texas smoke and spices, according to Cal Tharp, brand manager.
To expand activity, supermarkets need to develop separate merchandising strategies to appeal to the two main types of bacon consumers: those that believe any bacon is good enough, and those seeking higher-quality options, said Tharp. Price will be the driving factor in the first group's decision to purchase, he said, while the second group wants to know why each brand is worth spending extra on.
“Retailers can assist the second group by differentiating the lower-quality and lower-price options from the higher and guiding them to the premium choices,” Tharp noted.
Offering better bacon
To further boost revenues, operators should focus on trading up price-sensitive customers by encouraging trial of higher-quality bacon and also encouraging incremental purchases for outside of breakfast, he said, which can include offering recipes and having all the recipe ingredients centralized in stores for easy placement into the cart.
“As bacon has grown in popularity, consumers have become more inclined to bring it into lunch, dinner, snack and even dessert occasions,” Tharp said.
Bacon sector activity also is being driven by convenience-oriented consumers seeking fully cooked ready-to-eat selections, noted Eric Gibson, senior brand manager for Smithfield, Va.-based Smithfield Foods Inc.
“Additionally, the rise in popularity of high-fat, high-protein, low-carb diets, like the ketogenic diet, are continuing to impact bacon varieties,” he said, adding that consumers are seeking more options and that Smithfield is studying new and nascent trends in an effort to develop new alternatives or to improve current selections. Major sellers in its line of more than 20 offerings include Cherrywood Smoked and Applewood Smoked, and Gibson said that the supplier also is targeting wellness-oriented shoppers by having all options free of gluten, MSG, artificial colors and flavors, and added hormones.
Sales of better-for-you bacon products, meanwhile, are increasing at Williamsville, N.Y-based Tops Friendly Markets, which offers a range of national brands and private label products and is using an array of promotions to boost interest, said Jim Lane, director of meat and seafood. Initiatives include “Buy One, Get One Free” offers, coupon distributions, price promotions and theme displays, such as bacon cheeseburgers in the summer months, he said.
Tops uses a variety of media outlets, including social, broadcast and weekly ads, to also position bacon as a complementary ingredient to a wide variety of recipes, Lane said, which can include bacon-wrapped seafood, bacon-wrapped beef tenderloin or adding bacon to baked beans.
“The complexities of doing business today are such that category business managers must stay well in tune with the ever-changing dynamics of competitors and shoppers alike and be nimble enough to change strategies, tactics and product SKUs in a heartbeat if necessary,” he said.
Supermarkets can further expand bacon activity by spotlighting unconventional eating occasions, such as for tailgating, and uses beyond breakfast, including on ice cream, Tara Dugan, director of consumer and marketplace insights for the Des Moines, Iowa-based National Pork Board, told SN.
Effective marketing vehicles include in-store signage and sampling, including popular and newer flavors, such as applewood, pecanwood, brown sugar and cherrywood, Dugan noted.
Because bacon promotions also are a key driver of incremental volume, supermarkets should include newer varieties in addition to commoditized selections in their merchandising, Wisner said.
“Getting consumers to try ‘nichier’ options more often, which typically have higher prices and higher margins, along with high-volume commoditized selections, is a win-win from the retailer’s standpoint,” Wisner said. “Supermarkets shouldn't limit promotions to just the main brands as shoppers might find they prefer the newer, higher-margin options.”
The expanding arrays of bacon, however, is making it challenging for retailers to garner enough refrigerated space for the products, he added.
“There are many more meat selections and brands competing for space in the same area of the store,” he said, “including packaged lunch meat and sausages. It is difficult for the space allocated for bacon to expand as much as the market might warrant.”