Recession-driven brown-bagging and eating-in trends as well as an interest in better-for-you and premium products are helping to boost sales.

By Denise Purcell

The economic recession had a positive impact on the $7.2 billion lunch meat category (including sliced/non-sliced meats, refrigerated dinner sausages and frankfurters), reports Mintel International. Following years of decline, sales picked up beginning in 2007 in food, drug and mass merchant channels (FDM). Budget-minded Americans began brown bagging and eating in more often, slowing volume sales decreases. Retail price increases—the result of rising input costs and a shift to premium offerings—drove dollar sales growth.


• The brown-bagging trend has revived sales of lunch meat. Following a sales decline from 2004-2006, lunch meat sales turned around in 2007, growing 2 percent in food, drug and mass merchant channels. The pace of growth has continued to increase, with sales climbing 3 percent in 2008 and an estimated 4.3 percent in 2009.
• During the past year, market share shifted from mass-market leaders to private-label and small brands. Private-label and “Other” brands (with less than 5 percent market share) outpaced the total market, growing 6 percent and 5.1 percent, respectively.
• Small “Other” brands comprise more than a third of category sales. Small brands did exceptionally well in the dinner sausage segment, where upscale and better-for-you brands like Al Fresco natural sausages and Aidells hand-crafted gourmet sausages posted big gains.
• Packaged lunch meats have seen a flurry of innovation with an emphasis on better-for-you offerings, including reduced-fat, reduced-sodium, natural and organic products.

Chart 1
Sliced lunch meat is the largest segment, comprising 47.1 percent of FDM sales. Refrigerated dinner sausage and refrigerated/frozen frankfurters each account for about a quarter of FDM sales. Product innovations that focused on better-for-you offerings and gourmet flavors have helped broaden dinner sausage’s appeal to a more upscale customer, and have enabled increases in average retail prices, growing the segment by 11.2 percent between 2007 and 2009.

Chart 2
Fueled by the economic recession, private-label sales of dinner sausage flourished between September 2008-2009, outpacing leading brands with 11.2 percent growth. Sales of “Other” brands also performed strongly, growing 6.8 percent. The dinner sausage market has seen an influx of better-for-you offerings, especially in the form of chicken and turkey sausages that contain less fat than traditional pork and beef varieties, and with a more upscale range of flavors including mango, jalapeño, spinach and feta cheese.


• Freshly sliced lunch meat from the deli counter is most popular with shoppers, consumed in 77 percent of households, while packaged lunch meat is consumed in 73 percent of households. More affluent households are much more likely than average to consume sliced lunch meats from the deli counter, which they perceive to be fresher than packaged varieties.
• The healthy-eating trend has generated consumer demand for better-for-you, low-fat, low-sodium and all-natural lunch meats. More than four in ten respondents reported buying 100 percent natural lunch meat in the past year, and another 36 percent say they’re interested in trying it.
• Consumer perceptions of premium lunch meat brands are strong: 56 percent of Mintel’s respondents agree that premium brands of lunch meat are worth the higher price tag.
• Consumers score higher on purchase interest than actual purchases for three attributes—hormone-free, American Heart Association-endorsed and organic. This may be due to the associated high costs of products with these attributes.
• Freshness is a top priority among consumers, and resealable packaging designed to keep meat fresh and increase shelf life is a key purchase driver. Some 47 percent of respondents to Mintel’s consumer survey say they have purchased lunch meat in resealable packaging in the past year, and another 37 percent are interested in purchasing it. Still, there appears to be room for improvement: Nearly 23 percent agree that “lunch meat packaging does not seal effectively.”

Chart 3
Personal consumption of lunch meat is fairly constant regardless of gender or age, although usage starts to trail off among over-65s who may live in one- or two-person households where it can be difficult to finish a package of lunch meat before it goes bad. Manufacturers should target aging Baby Boomers with smaller package sizes and packaging technology that extends the life of lunch meats. Consumption is highest among respondents aged 35-64, those most likely to have children and/or teens at home.

Chart 4
Ham and turkey are by far the most popular types of lunch meat. Additional research shows that consumers are seeking better-for-you varieties, especially in all-natural meats containing no preservatives, added nitrates/nitrites, artificial colors or flavors.

Chart 5
More than four in ten respondents reported buying 100 percent natural lunch meat in the past year. Reduced-fat and reduced-sodium lunch meats are also popular, the latter especially among Baby Boomers aiming to prevent and/or manage high blood pressure. Further research shows that low-fat/fat-free meats are most popular among women.


• A new wave of better-for-you, reduced-fat, reduced-sodium, natural and organic products are improving lunch meats’ image. New deli-style products, available in both thinly shaved and thick-sliced varieties, are offering consumers a deli-quality experience without the wait.
• Bold flavors like jalapeño and spicy mango are appealing to the U.S. consumer’s expanding palate and interest in ethnic flavors.
• Resealable packaging for lunch meat has evolved from press-to-close packages to slide zippers to reusable plastic containers with closable lids. Consumers are interested in even more packaging innovation.


Aidells Spicy Mango with Jalapeño Sausage, no artificial ingredients, minimally processed; 
made from chickens raised without hormones and free from MSG nitrites and transfat.
Amylu Tequila & Lime Chicken Sausage, all natural and gluten-free, made with fresh boneless, skinless chicken breast meat and thigh meat; contains zero transfats per serving and no preservatives, nitrites or MSG.
O Organics Chicken Hot Wing Flavored Sausage, organic-certified; also available in this line is a Chicken Mushroom flavor.
Sam’s West Member’s Mark Chicken Parmigiano Smoked Chicken Sausage, made with sun-dried tomatoes with mozzarella, aged Parmesan and basil, with a blend of herbs and spices; all natural, free from gluten and artificial ingredients.