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CASE-READY MEATS: Ready or not?

When grocery historians reflect on the most significant developments of the industry’s second 50 years, case-ready meat will surely be high on their lists. So why aren't more retailers flocking to case-ready right now?

They have their reasons, ranging from general reticence about trying anything "new" to a firm belief that cutting beef in the store is a marketing edge. But concerning the future of case-ready, the simple answer is, slow and steady wins the race.

The potential for maximized efficiencies and streamlined operations is palpable, and the chicken category is a clear case study of the trend's potential for success. What's more, Wal-Mart's chainwide conversion to case-ready in 2000 was expected to jump-start adoption, single-handedly changing case-ready from a fad to a trend.

Growth hasn't been what some observers, especially the pioneers on all sides of the meat and packaging pipelines, might have expected, but case-ready is quietly continuing to gain steam.

Regardless of its currently restrained growth, the penetration of case-ready products at retail continues to increase, especially at operators acutely interested in the trend's promised benefits of fewer out-of-stocks, reduced labor costs, enhanced shelf life, and greater consistency.

Since 2002, case-ready penetration at retail has increased across all major species, according to the 2004 National Meat Case Study, which was jointly sponsored by the National Cattlemen's Beef Association (NCBA), the National Pork Board, and Cryovac/Sealed Air Corp. Overall, whole-muscle beef cuts experienced an 8 percent increase in case-ready penetration, while ground beef increased by 10 percent over that time period. The research found pork, which experienced a 13 percent increase, to be the greatest gainer among proteins.

The average operator today is carrying five case-ready SKUs per category for all proteins except lamb. The study also found evidence of shifting in allocations of meat case space, with fresh meat and poultry's share of linear feet decreasing by 6 percent since 2002.

Wal-Mart isn't alone in buying into case-ready. Other leading retailers embracing the case for case-ready include many of the usual suspects seeking efficiencies: Kroger, Albertsons, Safeway, Ahold, Pathmark, Supervalu's Save-A-Lot and Cub Foods divisions, Wakefern, and SuperTarget. In addition, several high-profile regional players such as Ukrop's, Wegmans, and HEB are in the game. Tyson Foods, Smithfield Foods, National Beef, and Cargill Meat Solutions rank among the leading case-ready suppliers, as do Swift, Hormel, American Home Foods, and Farmland Foods.

Not ready for prime time

In spite of the compelling economic, marketing, and food safety benefits offered by centrally processed case-ready meats, a large number of U.S. retailers continue to say that they're indefinitely committed to on-site meat cutting as a key differentiation strategy.

One of them is Scott Karns, president of Karns Foods, Inc., a six-store Mechanicsburg, Pa.-based independent. Karns is convinced his operation's quality reputation is rooted in its fresh meat program. "We have no intentions of changing our philosophy, and plan to stick with our same program, because our sales continue to grow every year with our full-service meat departments," he says.

"Customers continue to want the ability to buy exactly what they need, be it one pork chop or 10 pork chops," explains Karns. With the exception of tenderloins, he notes, "We don't use any case-ready products -- from beef to poultry to pork -- and we have no intentions of changing." Even though his suppliers continue presenting case-ready programs at regular intervals, Karns says he believes that "it's the wrong message to send to our customers."

As Karns views it, he's not about to mess with a good thing. Traditional service meat departments are instrumental to his stores' aggregate brand commitment. "We're still seeing great success in a program that offers something totally different from the large competitors."

When asked about changing market forces, and the related efficiencies in economy of scale, that simply cannot be ignored, Karns remains unflappable. "We don't feel we're at a disadvantage. Certainly the economies of scale and efficiency issues are for real, but we seem to make up for it in additional volume. So many operators today seem to be only concerned with reducing store labor costs as opposed to growing sales, but it's the reverse for us."

Other regional retailers share Karns' stance. Pittsburgh-based Giant Eagle is reinforcing its plans to continue providing meat selections cut fresh in-store every day. Company officials contend that the level of customer service provided by the chain's large team of butchers will endure in all of its 219 locations spanning western Pennsylvania, northeast Ohio, north central West Virginia, and northeast Maryland.

"Our commitment to customers is to meet their needs for an endless variety of fresh, high-quality cuts of meat, available at great values," notes Giant Eagle v.p. of meat and seafood merchandising Ed Steinmetz. "Customers continue to tell us how much they appreciate fresh cut-to-order meats prepared in-store daily by our butchers, and we have no current plans to change our offering."

Essential to this strategy is the role that Giant Eagle's butchers play as resources for customers, offering "helpful tips on meat selection, storage and handling, preparation, and appropriate food pairings," he says.

Steinmetz also brings up an issue echoed by other case-ready nonbelievers: the presence of enhancers. By offering what he calls "succulent meat and poultry items, many of which are found only in fine restaurants, including USDA Choice Beef, USDA Prime, Certified Angus Beef, Bell & Evans all-natural poultry, and Coleman natural beef, our meats are only Choice grade or higher. There is no need for chemical or other enhancements to extend shelf life, or alter taste or texture."

Rising profile

The role of meat enhancers in case-ready received extensive coverage in a recent article in The Cleveland Plain Dealer. The case-ready issue was part of a larger story the daily newspaper published examining Tops Markets' elimination of 450 meatcutters in the northeast Ohio market as a result of reported meat department losses in excess of $13 million over the past two years.

Employing Cargill's Excel subsidiary's line of enhanced Tender Choice beef and Tender Pride pork, Buffalo, N.Y.-based Tops' case-ready rollout is reportedly running well, with a wide variety of cuts offering longer shelf life. The line uses a solution of water and other ingredients that may also include sodium and flavorings, according to the article, which questioned the impact of the enhancements on product pricing and nutritional attributes.

The article essentially affirmed that there was nothing sinister about the enhancement solutions. Still, it's telling that a mainstream local newspaper of some note would devote an extensive article to the issue of the pros and cons of supermarkets' conversions to case-ready meat programs. It adds fuel to the argument that some retailers' commitments to their butchers aside, the idea of case-ready as a major retail trend is indeed ready for prime time.
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