• by Karlene Lukovitz  @KLmarketdaily, June 30, 2008

Americans may be watching pennies these days, but we're not about to let rising food costs or health-consciousness rain on our Fourth of July BBQs.

According to research from The Nielsen Company, sales of most traditional Fourth food and beverage items during the four weeks around the holiday should match or exceed sales during the same period last year.

Hot dog sales in food, drug and mass merchandisers (including Wal-Mart) are expected to exceed last year's level of 110 million pounds ($215 million at last year's prices)--despite an 8.7% increase in average equivalized unit price, to $2.13.

The traditional burgers will also be greasing up grills across the nation. Sales of packaged fresh ground beef--one of just three traditional Fourth items that have seen slight price declines since July '07 (down three cents, to $4.61, or about the same as the price of a gallon of gas in some U.S. markets)--are projected at more than 25 million pounds, or $117 million in '07 prices. And while the unit price of frozen ground beef is up 7.8% (to $2.34), it's still cheaper and easier than fresh, which accounts for projected frozen sales of 32 million pounds ($71 million).

In addition, cholesterol-defying revelers will buy over $51 million in bratwurst and knockwurst.

Colder-climate dwellers can be counted on to consume more than their share of carnivorous fare. Last year, Minneapolis shoppers bought 367% more fresh ground beef than would be expected for a market of that size, Syracusans bought 90% more hot dogs than similarly sized markets, and Milwaukeeans accompanied their obligatory beer with 525% more bratwurst and knockwurst.

Unfortunately, beer is also considerably more expensive, thanks to climbing grain prices. Barley has risen from $4.10 to $4.58 per bushel, and hops have jumped from $2.81 to $6.36 per pound since last year, according to the National Agricultural Statistics Service. Nevertheless, Nielsen expects holiday revelers to wash down those meat products with at least the same volume of beer as last year (23 million cases purchased in supermarkets alone).

Carbonated beverages are also projected to meet or exceed last year's FDM sales of 240 million cases, or over $1.5 billion, despite a unit price hike of 50 cents, to $6.88.

Rather than take the drastic measure of cutting back on brewsky, Nielsen speculates, at least some consumers may opt to eat some of their dogs and burgers sans the carbs, given that fresh bakery buns have seen the biggest price hike of all: up 19.5%, to $1.96 per unit.

If sacrifices are to be made, they may also make do with fewer bags of potato chips, up nearly 19% in unit price (to $3.79) or fewer slices of processed American cheese (up 12.4%, to $3.35).

And might the truly price-conscious choose to garnish those burgers with relishes and catsup (each up by about 7% in price) instead of mustard (up 10%)? Or take their chances with fresh tomatoes, given that their unit price is actually down 1.1%, versus fresh lettuce, up 9%?

With fresh onions the biggest bargain of all (down 16%, to $1.99), Americans may find reason to be grateful if weather permits plenty of the usual outdoor games and lounging.

Still, more fun in the sun could present a dilemma for those who might consider cutting back on the sunscreens and sunblocks (up 11%, to $1.30 per unit) instead of beer and buns. A potential fallback: sunburn aids (up just 3.7%).

Meanwhile, with disposable dishes and cups still priced about the same as last year, it will be interesting to see if ecological consciousness/guilt make a dent in sales of these items.