Two-thirds of bacon demand comes from the food and hospitality industries, specifically restaurants and hotels. Both have been impacted differently due to COVID-19.
At That means ramping up food purchases, which includes bacon.
“I expect at least a 20% to 25% increase when I purchase my next case of bacon. Having not done that yet, we will see where the chips fall,” says Patrick Wittling, managing partner for The General.
Pork demand overall is high at the retail level and has been throughout the pandemic.
“We have stolen share through the COVID-19 situation,” says Angie Krieger, vice president of domestic marketing at the National Pork Board. “Consumers have been stocking up on all of their favorite proteins.”
Krieger says total fresh pork volume is up 17% year-to-date, which includes loin cuts and ribs. In the early stages of the pandemic, some pork products saw weeks of triple-digit growth.
The week of Easter, hams were off the charts. Loin cuts and bacon performed well too that week.
USDA’s Food Price Outlook report says supermarket prices are the highest rate in eight years. Even so, pork products increased just 2.7% versus beef, which surged 4.2%, and poultry was up 4.7% from March to April.
“I don’t think we’ve seen bacon prices change very much,” says Steve Meyer, economist with Kerns & Associates.
While hams and loins are great, Americans love their bacon.
“Americans have a bigger relative demand for bellies than any other country,” says Dermot Hayes, an economist with Iowa State University. “We like our ribs and we like our bacon.”
However, belly prices have been wild over the past couple of weeks.
“I think we’re going to find a footing in the 80¢ to 90¢ range on these bellies,” Meyer says. “That’s a price where you can move a lot of bacon through retail. But at $1.60, if you have to translate that to retail prices, that’s not a good thing.”
Fast food restaurants didn’t perform as poorly as expected, thanks to the drive-through service, adds John Nalivka, president of Sterling Marketing.
Though economists might not know the full effect of COVID-19 on bacon demand until hotels and buffets open back up to capacity again.
“Buffet breakfasts and hotels use a lot of bacon,” Hayes says. “I suspect foodservice demand will be quite low moving forward.”
For now, many restaurants are open for business in some capacity, hoping customers and their cravings will follow.
Bacon has different packaging depending on if it’s for the retail or food service industry. Kreiger says it wasn’t repackaged but some of that product found its way to big-box stores, food banks or other food distribution companies, which was then sold directly to customers.