“Is pork the new toilet paper?”
This is a question we found ourselves wondering (no, seriously) after the recent closure of the Smithfield pork processing plant in Sioux Falls, South Dakota.
It’s not the first meat processing plant to close, but it’s by far the largest – supplying 4-5% of the pork supply in the U.S.
So what does that mean for our food supply – in particular, our meat supply? Will people start showing off their bacon hauls like they did with toilet paper?
On its face, it looks grim. Losing 4-5% of anything nationwide at a time like this is tough, especially such a household staple as pork. With anxiety riding high, news like this is enough to trigger panic shopping.
However, these aren’t typical times. While groceries stores are struggling to keep up with demand, entire branches of the food chain have almost completely shut down. Foodservice outlets like universities, schools, restaurants and more have either gone dark or are severely limiting their supplies.
This means there’s a surplus of food looking for a home. Sysco and U.S. Foods are already redirecting a significant portion of their inventory to grocery stores.
“It is a cascading series of events here that is disrupting the entire food chain,” said Tom Vilsack, the former Iowa governor who served as secretary of agriculture during the Obama administration. “You start ending school lunch programs, universities shut down, food service shuts down, tourism and hotels have low occupancy and at the end of the day you have a tremendous amount of the overall supply of food having to be redirected.”
This is also coupled with the fact that the U.S. meat industry is operating at a surplus. The so called “Tsunami of Meat” resulted in lower prices domestically and $13 Billion in exports globally, with a goal of $20 Billion in exports not out of the question.
This excess resulted in a large amount of meat in cold storage, further adding to the available meat being shifted to grocery outlets.
The grocery industry, especially locally to us here in PA, remains confident that inventories will remain high enough to avoid a shortage, citing no issues with deliveries, contingency plans and surplus. They also mention placing limits on the quantities consumers can buy during each trip as a potential solution if supplies dip.
That’s not to say this news isn’t significant and isn’t an indication of things to come. Business-implications aside, these closures could easily trigger panic shopping in consumers and another round of stock-ups.
So what can marketers of meat products do in light of this news?
We already talked about SKU Rationalization. Keeping cuts of meat simple and streamlining operations to get them to shelves as quickly and efficiently as possible is, in our opinion, the best thing a meat producer could do right now.
If pork production does slip because of these closures, other animal protein brands could fill the gap. Like we’ve said, availability is king right now, and there’s a huge opportunity if major products become unavailable.
Redirecting products from foodservice and other businesses limited by the stay-at-home orders is another strategy we’ve previously discussed. And with the production at risk because of closures, this makes even more sense for businesses.
Another highly effective tactic is communication with consumers. Transparency is more important than ever right now. With anxiety already running high and the sense of unease potentially increasing with these closures, reassurance that shelves will continue to be stocked and products will be available when needed will build trust and goodwill with consumers.
While losing 4-5% of the nation’s pork production is bad and can cause panic, the industry on the whole is well positioned to keep supply levels high through export surpluses and redirecting products from food chain businesses affected by the outbreak.
We believe marketers have an opportunity to reassure consumers that the meat section will be stocked and adjust their business practices to deliver on this promise. That way, meats don’t become the new toilet paper.