Beefing Up Jerky Sales
But greater competitive pressures likely from alternative snack food providers
LOS ANGELES -- Meat jerky products have proven to be resilient to economic downturns. IBISWorld estimated that revenue has grown in each of the past five years, including a 6% jump in 2012. Because of its small-scale nature, relatively low prices and innovative flavors and content, the meat jerky production industry is estimated to grow at an average annual rate of 3.7% to $1 billion in the five years to 2012.
According to IBISWorld industry analyst Mary Nanfelt, "While per capita red meat consumption declined during the recession due to consumers' tightened budgets, this metric has increased since 2009."
This trend has helped boost demand for meat products like jerky.
In 2009, Americans limited their spending on discretionary products, including snacks. Nevertheless, instead of forgoing meat jerky altogether, consumers opted for lower-priced products. Fortunately, Nanfelt said, "Per capita disposable income has returned to growth, allowing consumers to purchase higher-value snacks."
Expansions by the larger operators--Oberto Sausage Co., Link Snacks, Jerky Snack Brands and ConAgra Foods--have bolstered concentration during the past five years. This trend is projected to continue, as key players concentrate on core business development to achieve optimal economies of scale.
Revenue is forecast to continue growing over the five years to 2017, though at a slightly lower average rate. Despite Americans' increased budgets, industry operators will likely experience greater competitive pressures from alternative snack food providers and limited revenue opportunities. Additionally, the entrance of new meat jerky producers will intensify competition within the meat jerky production industry.
Still, the future for meat jerky producers looks bright, primarily because of new product developments and increased downstream demand.