FRESH FOOD: Meat: Lean times

At a time when price promises to factor even more heavily in the meat case, retailers will need as much firepower as possible to keep sales sizzling.

"When the consumer walks in the store today, they are browsing for a buy, especially in the meat case," says Joe Melton, meat director for Robesonia, Pa.-based Associated Wholesalers, Inc. (AWI). That means grocers have to be smarter and more efficient in running their meat departments, wielding tools such as case-ready when appropriate -- but not cutting operations to the bone so that the department ends up like a picked-over carcass.

The good news is that most folks still prefer to purchase their beef, chicken, pork, seafood, and other fresh meat products from traditional grocery stores, according to feedback revealed in the latest meat market survey conducted by the Food Marketing Institute (FMI) and American Meat Institute (AMI). As many as 70 percent of consumers surveyed named conventional supermarkets as their first choice for meat purchases, up from 68.3 percent in the 2006 study.

On the other hand, supercenters are increasingly proving to be another favorite choice for many food shoppers, a trend that puts the screws to supermarket operators -- especially in light of a sharp uptick in wholesale prices expected to affect business throughout the year. More than half (58.7 percent) of shoppers who typically frequent supercenters to purchase weekly groceries said they also purchase meat products there; more than one-quarter (26.5 percent) said they skip the supercenter meat aisle, and instead buy their beef, chicken, and pork at conventional supermarkets.

The Sealed Air Corp./Cryovac-sponsored study -- results of which were presented at this year's Annual Meat Conference in Orlando, Fla.& -- offers an in-depth look at consumer perceptions of the meat department, including how price influences their decisions, and even what things they'd like to see done differently.

Of prime importance to the current condition of the market, the FMI/AMI study, called "The Power of Meat: An In-Depth Look at Meat Through the Shoppers' Eyes," reports price to be the most significant factor consumers consider in determining what type of meat product to purchase once they've chosen the retail venue.

"The 'Power of Meat' study made some good points," notes Melton, "especially as it pertains to price." The meat market, in his view, has returned full-bore "to prices first," with everything else now a distant second or third. "People shopping the meat case are looking for bargains."

Melton predicts keeping bargains abundant in the meat case will be harder for retailers going forward, in light of the pressure that rising demand for ethanol fuel imposes on the corn supply, by pushing livestock feed costs to their highest level in a decade.

In the survey, shoppers made it clear they're in peak price- and value-driven mode when buying all types of fresh meat. Relying on circulars and newspaper ads, about four in 10 shoppers said they compare meat and poultry prices at different stores virtually every time they shop.

Once in the store, more than half of consumers (52.3 percent) said they always also compare prices within the store, weighing their options across the array of different types and cuts of meat.

While recipes, nutritional information, and customer assistance each influence purchase decisions to a certain extent, price-related marketing techniques, including promotional events, ads/fliers, coupons, and markdowns, were found in the survey to be by far the most important drivers.

The vast majority (89 percent) of shoppers said they make their meat and poultry purchases in grocery stores, but warehouse clubs or standalone butcher shops are the next likely destinations considered if they decide to go elsewhere to shop for fresh meat.

They also said they turn to alternatives to supermarkets most often for the level of quality and availability of cuts most often purchased for a special occasion.

Meat is still an American centerpiece at the table. As a composite, four in 10 consumers said they serve beef and chicken three or more times a week, and more than one in 10 dine on pork as often -- a frequency of at-home meat consumption attributed in part to an increasing number of family meals prepared at home, according to the report.

Interestingly, given the time pressures on many consumers today, shoppers in the survey said they strongly prefer fresh cuts over ready-to-eat or ready-to-heat meat case items.

The vast majority (93.4 percent) said they prepare fresh meat at least once per week, vs. 42.8 percent for ready-to-heat, and 34.8 percent for ready-to-eat. Only 2.8 percent said they never purchase fresh meat, while 28.5 percent said they never purchase ready-to-eat meats, and 28.2 percent never purchase ready-to-heat meats.

Shoppers were equally split on the quantities of meat they purchase and when they use it. Slightly more than half (51 percent) said they buy meats in large quantities and freeze it for use over time, compared with 49 percent of shoppers who said they plan to use meat purchases within a few days.

Demand for natural and organic meat is on the rise, according to the survey. Nearly one-fifth of shoppers (17.4 percent) said they purchased organic meats in the past three months, and nearly half of these purchases (48 percent) were made at conventional supermarkets.

The case-ready option

Natural and organic food stores accounted for 29 percent of organic purchases, followed by butcher shops (10 percent), supercenters (9.3 percent), and warehouse clubs (1.1 percent).

Consumers cited several reasons for buying natural and organic meats, including superior taste, better nutritional value, long-term health benefits, enhanced product freshness, and curiosity about the differences between organic and nonorganic meats.

In addition to calling on retailers to offer smaller portions and package sizes suited for the large number of one- and two-person households, consumers also identified a number of suggestions for how to improve the meat department, including:

--Better quality of meat products and cuts (identified by 50.5 percent)

--More/better variety of meat products and cuts (40.9 percent)

--More/better customer assistance and guidance (20.8 percent)

--More information on where meat is produced (17.7 percent)

--More/better recipes (13.9 percent)

--More/better signage for meat categories (11.7 percent)

While the survey's findings make it abundantly clear that the vast majority of Americans still prefer meat with their meals, conventional grocers don't get a pass when it comes to the need to consistently stoke the flames of the fresh meat department, says AWI's Melton, particularly as it pertains to smaller independents.

"Much of what was revealed in the survey isn't necessary new; it's just now all playing out a lot more clearly," says Melton. "If you're a retailer that's committed to making your meat department a destination in your store, there are some clear-cut operational facts you need to live with." Foremost among those facts, in Melton's book, is being prepared to adopt a case-ready strategy, at least for some cuts.

"Most independents have been reluctant to consider case-ready, because they want to be different, which is entirely understandable," says Melton. However, because of their small staffs and lack of expertise, case-ready would seem the more logical choice as a way to remain competitive for the long haul, he continues. "Independents must be willing to transition how they operate the traditional meat department, or risk going out of business."

While most large retailers offer case-ready meat, many consumers want to see a butcher behind the counter. The answer, in Melton's view, is a "next-generation case-ready" over-wrap program, which he says enables smaller grocers to have the best of both worlds, with increased saleable yield, and better deployment of store labor to meet customers' needs with a properly merchandised meat case.

Slice and sell

A new trimmed box-beef program underway at AWI is a prime example. Melton says store-level employees need only slice the beef and put it in trays.

"There's no shop trimming, which gives retailers an opportunity to know their yields and vastly reduce marketing losses," such as those generated by rewraps and markdowns. The payoff is an improved bottom line.

"Unfortunately, a lot of independents don't really have a firm handle on the P&L ratios in their meat departments, and in turn don't really know what it costs them to run the operation."

In the same vein as the legendary and highly effective Blue Light Special, Melton also encourages retailers to beef up weekly in-store meat promotions four weeks out, with three or four key items that are reduced 20 to 30 cents per pound and promoted with high-visibility signage. Weekly in-store specials give shoppers a compelling reason to visit the store more often.

On the other hand, Melton has a bone to pick with retailers whose meat departments are "dark after 6 p.m.," just when many consumers frequently do their shopping, only to encounter a picked-over meat case.

"Even the smallest retailer now has the data capabilities to know what they're selling," says Melton, "and should be cutting by production schedule to have an adequate selection of the right items in the evening. When people come in and can't buy what they want, it plays right into hands of alternative operators."

Ditto for meat case cleanliness, and for standardized descriptions for cuts of meat to help customers easily identify items in the meat case. "There are still too many retailers using too many different names for different cuts," notes Melton, which only further compounds customer confusion.

Another place where grocers can't cut corners if they're serious about meat: good meat managers. "If you're a retailer who's intent on making your meat department a destination," says Melton, "then you must be willing to pay a very good salary to your meat manager. Find someone who's professional and strong, with the right attitude -- someone who's willing to walk out in front of the meat case to talk to customers."

He further recommends building customer interaction into the manager's scheduling. "Schedule dedicated time at peak hours for the meat manager to be out in front of the meat case, with no production responsibilities, talking to and interacting with consumers. If you don't put them on the schedule to do just that, it will never happen."
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