Jan 28, 2023
Disappearing Barbecues Show Global Beef Demand Is Under Pressure
(Bloomberg) -- The world’s consumers have been cutting back on meat eating since the early days of the pandemic. In 2022, the demand hit came for beef, and even as inflation cools, all signs point to continued pressure this year, especially in some of the world’s most carnivorous nations.
It’s not uncommon to see meat buying slide during downturns for the economy. What’s striking is that demand is falling faster in many of the countries where beef has traditionally been the protein of choice. In Brazil, consumption was on its way to a record low in 2022. US shoppers have cut back on purchases by more than 4% in the past year, NielsenIQ data show, while UK sales of beef roasts and steaks have tumbled.
Perhaps no one place better captures the trend than Argentina. The Argentine barbecue, or asado as the locals say, is so tightly woven into the national fabric that even through some of the worst recessions, consumption has proven resilient to belt-tightening. Recent soaring prices in the nation long famed for eating more beef than almost anywhere else are forcing consumers to trade down to chicken, which is now vying for the title of the country’s top protein.
Omar Anibal Sosa, a 41-year-old father of three who lives in Buenos Aires, is wistful when he remembers his last asado — more than a month back, which in Argentina feels like a lifetime ago. He can remember the menu – he reluctantly substituted once-irreplaceable short ribs and flank with low-quality cuts of skirt steak, along with chicken and pork. And he bought the beef by asking the butcher to cut him a meager steak or two, rather than, as is traditional, placing his order by the kilo.
“I used to fire up the grill every weekend,” said Sosa, who works as a church handyman and delivery driver.
“Today, barbecuing is a luxury,” he said.
For 2023, the US Department of Agriculture predicts roughly flat consumption worldwide. In some of the biggest beef markets, though, there’s a pronounced slide. In Argentina, the agency sees a drop of more than 2%. A decline of almost 5% is expected for the US.
It can be tricky to accurately capture the demand drop, because most forecasters take meat production as the basis of their consumption estimates. Some of the best measures of waning interest in beef come from a combination of tracking retail sales and anecdotal information.
Faltering demand signals headwinds for the world’s major beef producers including JBS SA and Tyson Foods Inc. The companies have also battled herd-shrinking droughts, higher input costs and increasing pressure from investors to produce meat more sustainably.
The pressure on beef demand is welcome news for the planet. By some measures, agriculture accounts for more global greenhouse gas emissions than transport, thanks in large part to livestock production.
At Made in Hackney, a vegan community cookery school in east London, founder Sarah Bentley says she has noticed an evolution in people’s attitudes since setting up the school a decade ago. Lentils, once considered unfashionable and “a bit hippy,” are now a big hit among her patrons. Cooking classes get booked up quickly. Most students aren’t vegan or vegetarian, but they’re curious about affordable eating, she said.
“You can’t argue with the price point,” Bentley said.
In the UK, beef purchases at grocers and restaurants have fallen 5.8% from a year earlier, with sales of roasting joints down 22%, according to data compiled by farm adviser AHDB. Steak buying dropped about 19%.
Many of the consumption changes will seem subtle. People will trade down cuts and proteins — first goes beef, then pork and chicken. Dishes like spaghetti bolognese will get less meat in the sauce and instead get bulked up with extra tomatoes or water.
“Meat is something that gets hit quite quickly, especially for lower-income consumers,” said Rupert Claxton, a consultant at Gira who’s studied the meat industry for about two decades.
In the US, Michael Roberts, head of marketing at a non-profit in Oak Park, Illinois, saw his prior business as a consultant dry up during the pandemic, while his partner was diagnosed with brain cancer. As their incomes shrank and health expenses soared, Roberts and his partner cut their meat eating from four times a week to two, typically replacing beef and chicken with pinto beans, lentils and rice.
“The red meat has gone by the wayside,” said Roberts, 57, who’s struggling with low iron levels. “That really no longer comes in the house. We've substituted a lot of meatless meals, which can be healthy and there's nothing wrong with it. But it's primarily beans, rice and lentils for the protein.”
To be sure, it’s too early to say if the trend will stick globally. Many economists still expect consumption to expand in some places over the next decade as the population grows and as consumers in Asia and other emerging markets eat more beef.
Back in Argentina, it’s estimated that per capita beef consumption reached 47.2 kilograms in 2022, according to beef industry group Ciccra. That compares with a modern-day record of 68.7 in 2007. Consumption of chicken, meanwhile, has grown to nearly 46 kilograms from roughly 18 two decades ago, thanks to its competitive price, Rosario Board of Trade data show.
It feels like a stripping down of national identity for a country that traditionally has rivaled neighboring Uruguay for the title of world’s biggest carnivore on a per capita basis. The nation’s government said about a year ago that it would seek to keep beef consumption above 50 kilos per person, through policies like export quotas. But so far that goal is proving out of reach and inflation is raging. Annual food inflation in Buenos Aires in December was 97.5%, according to the latest data from the national statistics agency.
For consumers like Sosa, the father of three, the outside grill, once a communal point of great pride, has instead become painful reminder of what was.
“It never used to look all abandoned like that,” he said.
--With assistance from Tatiana Freitas, Jinglu Gu and Dominic Carey.
©2023 Bloomberg L.P.