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GROCERY: Packaged Meats: Taste makers

In July, excited by a successful change that made Johnsonville Sausage Co.'s heat-and-serve precooked sausage taste as good as fresh-grilled bratwurst, c.e.o. Ralph Stayer lit a firecracker in his wastebasket. "I've gone through quite a few wastebaskets," says Stayer. "That's the way we celebrate innovation here."

Stayer has a lot to be fired up about. Over the last five years, sales of bratwurst and knockwurst sausages, the mainstay at Johnsonville, have increased some 28 percent to nearly $257 million, according to ACNielsen Strategic Planner data, contributing to an overall sales increase in the packaged meat category of 9 percent in the five years since Sept. 30, 2001.

After sausages, the other hot item in the packaged meat category, according to sales data, is sliced lunchmeat, up nearly $400 million in sales during the most recent five-year period -- driven by the sales of refrigerated lunchmeat deli pouches, which grew 65 percent in the past five years.

Industry experts attribute the success of the category to consumers' desire for:

-Stronger flavor profiles;

-Greater convenience and freshness;

-Smaller, 'right-sized' portions; and

-Healthier food choices.

At Johnsonville, Stayer, whose father started the company in 1945, is tapping into the growing interest of American consumers in stronger, more vibrant flavors, a trend that seems to be emerging in many food categories. His company, a superb marketer, is taking advantage of the "brat's" popularity for tailgating.

"Johnsonville brats are synonymous with football in this area," says Ed Wojnicz, sales manager at Holiday Wholesale in Wisconsin Dells, Wis., "particularly during the summer and now with [NFL Green Bay] Packer and [University Of Wisconsin] Badger football tailgating parties."

With its plant located in Johnsonville, Wis. -- the heart of Green Bay Packers territory -- it's only natural that the company would develop an entire how-to kit for tailgating.

Last year, led by its bratwurst sales, Johnsonville says it became the nation's largest sausage brand by revenue, with its brats sold seasonally at some 4,000 McDonald's outlets, 20 NFL stadiums, and stores in 38 countries outside the United States. Johnsonville has also joined the big time in the promotional arena: It sponsors the Johnsonville Brats Invitational, a professional bull riders' championship that was televised this year on NBC.

The company that claims to have introduced bratwurst to America is also staying on top of the latest flavor profiles. Its newest product is the Johnsonville Grilling Chorizo, which, according to senior brand manager Cory Bouck, is aimed at mainstream consumers who are increasingly looking for south-of-the-border flavors.

"The development of this product wasn't a Hispanic strategy, or even driven by a desire to appeal to Hispanics," says Bouck. "This is a product for any American, regardless of ethnicity, who loves Mexican spices in meats. Mexican food sales are up hundreds of percentage points in the past 20 years."

Key trends

Bouck says there's a growing taste for spicy foods in the United States, with growth being seen in nontraditional spices, such as chipotle and habaneras. "If you look in any bookstore, you'll see mainstream cookbooks about grilling with what were once considered exotic spices, but are now available at the local supermarket in the ethnic food aisle. America continues to fulfill her destiny as the world's melting pot, and not just metaphorically."

"Strong flavor profiles" are among the key trends that are influencing prepackaged deli meat sales, according to Alan Hiebert, education information specialist at the Madison, Wis.-based International Dairy-Deli-Bakery Association. Others include thinner slices and higher quality, including private label and whole-muscle products.

Hiebert notes that the U.S. population is aging, "which means that many taste buds are duller than they used to be. Therefore, anything with strong flavor is becoming more popular. Aged cheeses (all the way up to nine-year cheddar), spicy meat (Cajun chicken breast, salsa turkey breast, peppercorn-crusted roast beef), and exotic imported items (prosciutto) should continue to be popular.

"Convenience is also quite important to many consumers today, so it stands to reason that self-serve prepackaged products will be more popular," he adds. "It's sometimes difficult for working people to shop the deli department when it's open."

IDDBA's trends report, What's in Store 2006, reveals that organic packaged meats are gaining in popularity because of consumer concerns about bovine spongiform encephalopathy (BSE), or mad cow disease, and animal welfare. The report also notes that combo packages, with multiple flavors of one variety of meat, such as honey ham, smoked ham, and boiled ham, are maintaining popularity, while new combo packs of meat and cheese, or two varieties of meat, are gaining.

Reusable plastic tubs that hold one or two pouches of meat to preserve freshness are also becoming more popular, the study says.

Sara Lee is one supplier that has jumped onto the convenience of single-serve offerings. In September the company launched new Single Occasion Deli Meats (three ounces per package) and Cheeses (2.4 ounces per package).

"Americans are experiencing a lunch-skipping epidemic, with nearly 15 percent of consumers skipping lunch daily, due in part to lack of appealing lunchtime options," says Divine Williams, v.p. of marketing for Sara Lee Deli, in response to a Lunchtime Trends survey commissioned by the supplier.

"Single Occasion invites excitement back to the lunch hour, with convenient single-serve packages of deli-quality meats and cheeses that allow consumers to customize their lunch every day," adds Williams.

Single Occasion Deli Meats from Sara Lee come in four varieties: Oven Roasted Turkey Breast, Honey Roasted Turkey Breast, Honey Roasted Ham, and Hardwood Smoked Ham. Single Occasion Cheeses include Swiss Cheese, Mild Cheddar Cheese, and Smoked Provolone Cheese.

According to Sara Lee Deli's Lunchtime Trends survey, eight out of 10 people said that they were indifferent about their options for lunchtime foods, and nearly 90 percent said they eat the same thing for lunch nearly every day. Only 3 percent said that they're making an effort to add variety to their lunchtime menus.

The survey found that convenience is more important than taste. Almost half of those polled said that what they want most is "ease of preparation."

Slimming down

Those single-serve packages also tap into important demographic changes that show a rise in one-person households and families headed by a single parent. Both trends point to the need for smaller packages of products geared to convenience. They also tie into a new trend toward smaller portions, or "smart sizing," to help consumers control their caloric intake.

"Aware that one in three Americans today is overweight and one in five is obese, many consumers are motivated to make healthier food choices and curb calories, even as they snack," says Chris Hammer, senior product manager, U.S. marketing at ACNielsen.

In a recent report, Hammer notes that some companies, like Procter & Gamble, are offering 100-calorie packages of lower-calorie products, such as reduced-fat Pringles, while others are simply putting out nondiet products in smaller servings. "That's because, while diet trends abound, there's one thing obesity experts agree upon: To weigh less, eat less."

Hammer points out that single-serve portions also enjoy greater quality control, delivering fresher flavor and texture than a multiserving package that's been opened. In addition, single people and smaller households can sometimes afford to pay a bit more for the convenience of smaller sizes, offering profit opportunities for retailers.

"Single-person households often have more money to spend on a per-person basis than any other household," says the Food Marketing Institute's 2005 U.S. Grocery Shopper Trends study. That report notes that singles, single parents, and dual-earner married couples make up 81.9 million working households, and singles without children at home account for 25 percent of this group. Single parents account for nearly 16 percent, and married couples, with and without children, comprise almost 37 percent of working households.

By 2030, the FMI study says, only 17 percent of working households will be headed by single-earner married couples. More than 35 percent will be dual-earner married couples; nearly 30 percent of unmarried individuals and more than 18 percent will be single-parent households.

"There are three major consumer trends impacting product and packaging decisions: convenience, health and wellness, and one-and-two person households," says Heather Fries, brand director at Oscar Mayer.

"Within our portfolio we have mainline options, as well as light and fat-free, to ensure we're meeting the needs of our consumers," continues Fries. "At the end of the day, consumers still want great-tasting food, so we're very proud of the success of our Deli Shaved product line that includes ham, turkey, and roast beef. This product line meets consumers' needs by delivering deli-fresh taste with the convenience of prepack."

Fries says Oscar Mayer has not yet created any specific Hispanic products, but many of the company's products, she contends, "are well liked by Hispanic consumers, such as hot dogs, bologna, ham, and turkey." Oscar Mayer has bilingual packaging for turkey ham, turkey bologna, and turkey hot dogs. "We've also created Spanish-language advertising to build awareness of our brand and the products we offer with consumers," she adds.

Meanwhile Omaha, Neb.-based ConAgra Foods, Inc. is positioning its Hebrew National franks to take advantage of increased concerns about health. "Now more and more consumers are associating kosher with a high quality and great taste," says Scott Tang, associate brand manager, Hebrew National.

As a result Hebrew National introduced an updated logo and package design this past summer to strengthen the brand's premium position. The "Finest Kosher Quality" seal now has a more prominent presence on packaging, "reinforcing consumers' confidence in the brand's quality, taste, and heritage," notes Tang. The new design appears on franks and lunchmeat packaging, and will be phased into the rest of the product line throughout the year.
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