SIC 2013 Sausages and Other Prepared Meat Products

SIC 2013

Establishments in this category are primarily engaged in manufacturing sausages, cured meats, smoked meats, canned meats, frozen meats and other prepared meats and meat specialties, from purchased carcasses and other materials. Products include bologna, bacon, corned beef, frankfurters (except poultry), headcheese, luncheon meat, pigs' feet, sandwich spreads, stew, pastrami, and hams (except poultry). Prepared meat plants operated by packinghouses as separate establishments are also included in this industry.

Establishments primarily engaged in canning or otherwise processing poultry, rabbits, and other small game are classified in SIC 2015: Poultry Slaughtering and Processing. Establishments primarily engaged in canning meat for baby food are classified in SIC 2032: Canned Specialties. Establishments primarily engaged in the cutting up and resale of purchased fresh carcasses, for the trade, are classified in SIC 5147: Meats and Meat Products, a wholesale trade industry.

NAICS CODE(S)

311612

Meat Processed from Carcasses

INDUSTRY SNAPSHOT

Meat by-products from the sale of beef and pork, including hides, variety meats, tallow, and numerous other products, account for more than 10 percent of the total value of a carcass, which keeps prices to the consumer lower than they would otherwise be. The low-carbohydrate, high-protein diet market of the early 2000s helped enhance consumer popularity of luncheon meats, sausages, bacon, and other prepared meats, and consumers were willing to pay for quality products. In a 2005 poll conducted by the American Meat Institute (AMI), 64 percent of Americans considered hot dogs and hamburgers as American as apple pie and Uncle Sam, surpassing both pizza and chicken in rankings. AMI Senior Vice President of Public Affairs Janet Riley pointed out that national icon Uncle Sam was a meat packer.

The red meat industry, which includes meat-packing plants and establishments that produces processed pork and beef products, accounts for less than 60 percent of the entire meat industry, which included poultry and poultry products, compared to 75 percent in the 1990s. However, consumer demand for beef increased 25 percent from 1998 to 2004, according to the Cattlemen's Beef Board, and consumer beef spending in 2005 was projected to reach $71 billion. The prepared food industry continues to formulate new products to meet consumer demands for lighter, leaner, and easier to prepare foods.

Annual per capita consumption of red meat from 2000 to 2004 averaged about 112 pounds, and studies done by both the USDA and the American Meat Institute (AMI) show that 99 percent of Americans eat meat, and 88 percent eat red meat. Total meat, poultry, and fish consumption rose by 12 pounds per person during the 1990s.

ORGANIZATION AND STRUCTURE

The meat processing industry is vertically integrated, with approximately 1,135 establishments in the United States in 2002 shipping products valued at $25.8 billion. The industry employed more than 98,500 workers, and paid more than $3.6 million in employee compensation.

Prepared meat products are marketed to supermarkets and wholesale clubs, and often the "store brand" available is produced by a large company and labeled locally. The pizza topping industry, food services, and in-store delicatessens make up the rest of the market share. Companies in this category also manufacture private label meats for restaurants.

Meat processors often work closely with vendors from other industries to develop innovative packaging ideas, mindful of the importance of packaging from a marketing and practical point of view. Because meat is highly perishable, packaging must ensure that the food inside will not spoil and that it will retain its flavor for long periods of time. The packaging must also be convenient and attractive to the consumer. The concept of meeting consumer demands through marketing is reflected in packaging, which presents each product's traits, i.e. low-fat, low-sodium, etc.

In addition to the large national brands, many regional brands of ham, sausage, hot dogs, lunch meat, and other prepared meats are available for family-run companies. A proliferation of processed meat products put shelf and cooler space at a premium, forcing producers to create niches in major markets and design more convenient and tastier products. The prepared meat industry's practice of creating products and the resulting demand that had not previously existed among consumers is part of a larger food industry trend called differentiation. With differentiation, similar foods are altered enough to appear different either in preparation, flavor, or packaging, and are then marketed as new products.

Prepared meat businesses owe much of their growth to the creation of variations, such as premium, economy, flavored, low-salt, low-fat, or high-protein...

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