High Food Costs Won't Rain On 4th of July Celebrations

Sales of Favorite Cook-Out Foods Expected to Soar in Preparation for the Holiday

Costs of Cook-Out Fare, Including Buns, Chips, Cheese, on the Rise

25 June 2008
Schaumburg, IL
      
As Americans prepare to fire up the grill this 4th of July, rising food costs won’t put a damper on their holiday cook-out plans, according to new research from The Nielsen Company. U.S. consumers are expected to purchase more than 110 million pounds or $2151 million worth of hot dogs during the four-week period surrounding the holiday. The holiday generates the greatest hot dog sales for the entire year.

Hot dogs aren’t the only item on July 4 menus, with consumers expected to purchase more than 25 million pounds or $117 million2 of fresh ground beef and more than 32 million pounds or nearly $71 million of frozen ground beef3 during the same time frame, while bratwurst and knockwurst sales will likely exceed $51 million4 . Carbonated beverage sales are also expected to soar, reaching a whopping $1.5 billion5 or more than 240 million cases. Beer is hot for summer months and the July 4 holiday, with more than 23 million cases6 expected to be sold in supermarkets alone.

“Rising food prices are not going to keep consumers from enjoying traditional, festive summer cook-outs,” said Tom Pirovano, director of Industry Insights, The Nielsen Company. “There’s no doubt it’s going to cost them more, but they are still going to have their favorites.”

Hold the Bun?
As they look for ways to save money, cost-conscious consumers may wish to forgo the bun, as baked goods have experienced the greatest price increases of all cook-out fare examined by Nielsen. According to Nielsen data, consumers are expected to shell out 19.5 percent more for fresh bakery buns this year than they did at this time last year. Potato chips are a close second, up 18.8 percent, followed by processed American cheese slices, up 12.4 percent. Interestingly, the cost of fresh ground beef actually fell 0.6 percent, making it one of the few bargains of the season.

Average Cost of Cook-Out Fare

Source: The Nielsen Company, Total U.S. food, drug, mass merchandiser stores, including Wal-Mart. Manufacturer prepackaged items with UPCs only.
*Equivalized Unit Volume is a conversion that equivalizes products of varying sizes. For example, carbonated soft drinks such as cola and lemon-lime are equivalized on a 288 ounce case basis, bakery fresh bread is equivalized on a 16 ounce basis.

“Higher grain prices are resulting in higher prices for breads and buns,” said Pirovano. “Consumer demand for healthier items such as whole-wheat bread and buns will likely drive up the cost of a picnic or barbeque even more. Healthy eating remains a priority for many shoppers despite the economic downturn.”

Declaring Independence from a Frigid Winter
Nielsen’s analysis of supermarket sales in 52 U.S. markets shows that cold weather cities tend to purchase more hamburger, hot dogs, and bratwurst during the four-week period surrounding Independence Day than consumers in other markets. Perhaps seeking to put frigid winter temperatures behind them, Minneapolis shoppers buy 367 percent more fresh ground beef than would be expected for a market of its size. When it comes to hot dogs, Syracuse comes out on top, buying 90 percent more, while Milwaukee consumers buy far more bratwurst and knockwurst than anyone else in the country – a whopping 525 percent more than would be expected for a market of its size, followed by Minneapolis and St. Louis.

Source: The Nielsen Company, U.S. Supermarkets with $2 million and over in sales, four weeks ending July 17, 2007. Manufacturer prepackaged items with UPCs only.
*Percent category sales in market by percent grocery ACV sales in market, times 100.

The Meat’s Not the Only Thing Burning…
Extra time spent outside means an increased likelihood of sunburn. Fortunately, consumers understand the need to protect themselves when soaking up the summer sun. U.S. retail sales of sunscreen and sunblock are expected to top $130 million during the holiday time frame, while sunburn aids will reach more than $2.8 million . And while an ounce of prevention may be worth a pound of cure, Nielsen research shows it’s going to cost more to prevent a sunburn than to cure one this year. The cost of sunburn aids are up just 3.7 percent, while sunscreen and sunblock prices have soared 11.1 percent.

About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information (ACNielsen), media information (Nielsen Media Research), online intelligence (NetRatings and BuzzMetrics), mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com.

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1Four-week period ending July 14, 2007 showed total sales of $215.1 million or 109.6 million pounds of manufacturer prepackaged refrigerated frankfurters in U.S. food, drug and mass merchandiser stores, including Wal-Mart.
2Four-week period ending July 14, 2007 showed total sales of $116.9 million or 25.2 million pounds of manufacturer prepackaged fresh ground beef in U.S. food, drug, and mass merchandiser stores, including Wal-Mart.
3Four-week period ending July 14, 2007 showed total sales of $70.8 million or 32.6 million pounds of manufacturer prepackaged frozen ground beef in U.S. food, drug, and mass merchandiser stores, including Wal-Mart.
4Four-week period ending July 14, 2007 showed total sales of $50.6 million for manufacturer prepackaged bratwurst and knockwurst in U.S. food, drug, and mass merchandiser stores, including Wal-Mart.
5Four-week period ending July 14, 2007 showed total sales of $1.5 billion or 240.3 million cases of carbonated beverages in U.S. food, drug, and mass merchandiser stores, including Wal-Mart.
6Two-week period ending July 14, 2007 showed 23.2 million cases of beer sold in U.S. supermarkets.
7Four-week period ending July 14, 2007 showed total sales of $130.8 million for sunscreen and sunblock in U.S. food, drug, and mass merchandiser stores, including Wal-Mart.
8Four-week period ending July 14, 2007 showed total sales of $2.8 million for sunburn aids in U.S. food, drug, and mass merchandiser stores, including Wal-Mart.
9Average equivalized unit price difference between four weeks ending May 17, 2008 and four weeks ending July 14, 2007. Total U.S. food, drug and mass merchandiser stores, including Wal-Mart.