Meat delivery companies find rare opportunity in the pandemic

NOTE: Bloomberg Second Measure launched a new and exclusive transaction dataset in July 2022. Our data continues to be broadly representative of U.S. consumers. As a result of this panel change, however, we recommend using only the latest posts in assessing metrics, and do not support referring to historical blog posts to infer period-over-period comparisons.

Similar to categories like toilet paper, there have been meat shortages across the U.S. in the COVID-19 era.  In response, many Americans turned to DTC meat companies, which experienced strong sales increases early in the pandemic. Spending trends during the pandemic suggest that instead of viewing DTC meat as a one-off holiday gift, consumers now see it as a necessary service like meal kits and grocery delivery.

ButcherBox beefs up its sales lead during COVID-19

Within the meat delivery category, ButcherBox, Omaha Steaks, and Crowd Cow are among the top companies. Omaha Steaks has long been known as a retailer of meat and food gifts, and most of its annual sales occur in December. Newcomers ButcherBox and Crowd Cow were founded in 2015 as meat subscription boxes and are generally less affected by seasonality. 

DTC meat sales

Sales at all three meat companies proliferated as shelter-in-place orders went into effect. ButcherBox’s sales spiked more than 50 percent month-over-month in March. Omaha Steaks and Crowd Cow respectively saw 68 percent and 95 percent month-over-month sales increases in April. However, only ButcherBox sales have continued rising in the months following the initial spike.

Omaha Steaks had the highest year-over-year growth in sales 

Unlike ButcherBox and Crowd Cow, Omaha Steaks does not offer meat subscriptions. Because spring is usually part of Omaha Steaks’ off-season, the unexpected sales spike led to it having the highest year-over-year growth. In March, Omaha Steaks experienced almost 300 percent year-over-year growth, compared to 138 percent for Butcherbox and 134 percent for Crowd Cow. By April, Omaha Steaks’ growth reached nearly 800 percent.

Year-over-year growth by meat company

Crowd Cow has seen fluctuations in its growth rate over the past three years, but the pandemic has accelerated growth since March 2020. By contrast, year-over-year growth at ButcherBox has remained fairly level throughout 2020, averaging 105 percent year-to-date. 

The drivers of sales growth vary by company

While DTC meat sales have been on the rise, a closer look reveals that the increased sales arose from different sources: new customers for Crowd Cow and Omaha Steaks, and customer retention for ButcherBox. 

Omaha Steaks and Crowd Cow experienced a surge in new customers early in the pandemic. In fact, the monthly percentage of new customers for each of these companies exceeded 50 percent in April 2020, but has tapered off since. By contrast, on March 26, ButcherBox implemented a waitlist for new customers. As a result, the percentage of new customers dropped to 2 percent in April. 

New customers by meat company

However, ButcherBox is the clear winner when it comes to customer retention. Among consumers who made their first ButcherBox purchase in March 2020, 41 percent made another purchase six months later. By contrast, Crowd Cow retained 11 percent of customers six months after an initial purchase in March. Omaha Steaks only retained 5 percent. Omaha Steaks has the lowest retention in this competitive set likely because it is the only company without a subscription business model.

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