Lessons in Meat Marketing

These were among the messages delivered to grocers attending the 2015 Annual Meat Conference, hosted by the North American Meat Institute (NAMI) and the Food Marketing Institute (FMI), Feb. 22–24 at the Gaylord Opryland Resort in Nashville, Tenn.

“Meals should be a vehicle for great service,” said John Rand, SVP of retail insights at Boston-based Kantar Retail, in his presentation, “Securing the Perimeter: The Red, White and Green of Retail Branding,” the colors representing meat, dairy and produce. Integrating fresh into these solutions creates cross-merchandising opportunities across the store and enables retailers “to move from item statements to meal concepts.”

Rand noted that fewer and fewer consumers are shopping both the perimeter and center store, and only 43 percent shop both. Yet supermarket marketing has been “almost entirely co-opted” by center store suppliers with large marketing budgets.

Grocers, he said, need to market meals, which are the solutions sought by consumers looking for a retail experience that solves their daily challenges. Such is the essence of branding: delivering on a meaningful, consistent, relevant promise.

In “Navigating the Growing Demand for Natural and Organic Meat,” Mary Ellen Lynch and Clay Sayers, of Schaumburg, Ill.-based SPINS, urged retailers to stay ahead by watching natural consumers because they’re driving the trends.

That’s definitely the case, especially where meat is concerned. While still a small part of the overall meat category, natural is driving a lot of the growth at retail, most of it coming in what SPINS calls the natural standard (brands that follow strict standards) and specialty natural (marketed as artisan, premium and ethnic).

Of the overall $1.2 billion meat category, just $200 million is natural, but the segment has grown nearly 24 percent, compared with 4.7 percent for conventional meats.

Showing the most growth are products claiming “hormone-free” and “grass-fed,” among other sales-driving claims, including “antibiotic-free” and “humanely raised.”

Meanwhile, the latest top 20 food trends identified by the Washington, D.C.-based National Restaurant Association (NRA) are dominated by natural, free-from and better-for-you concepts.

Retailers can cash in by promoting premium extensions of conventional brands, clean labels and other trending concepts like gourmet, artisan and craft. Natural shoppers, the speakers said, prize honesty, transparency and compelling farm-to-fork stories.

More Meat, Bigger Rings

Grocers need to leverage meat’s connection to other categories to drive bigger baskets — that was the advice from the Nielsen Perishables Group to retailers looking to deliver on evolving consumer preferences amid high protein prices.

Sherry Frey, SVP at Schaumburg-based Nielsen, asserted that grocers can grow basket rings by delivering solutions through cross-promoting meat across multiple store categories. “Competition and partnerships hinge on connections across aisles,” Frey said.

It’s a solution aimed at halting category attrition, as price increases are driving people away from the meat case, leading to a 1 percent average decline in household penetration for historic protein mainstays of beef, pork and chicken. Likewise down are meat sales volume and the number of meat-buying trips.

Further, meat case sales are leaking to the in-store deli. “Deli is changing and really becoming a competitor to foodservice,” but it shouldn’t erode sales within the store, Frey said.

Grocers need to strategically target two key meat categories: versatile quick-cuts (premium-priced smaller packs) and planned occasions (larger family packs). Reduced trade-advertising activity has contributed to volume loss, Frey said, recommending that grocers promote meat, not isolated ingredients, in circulars as part of multicategory solutions.

Meat should be treated in-store as such, too; that means “thinking differently on how to merchandise the store,” Frey said. “If you’re not willing to think differently and get creative, you’re vulnerable.”

Marketing meat-based solutions should focus on three things, she noted: creating excitement, simplifying lives and personalization.

‘Digisumers’ Calling the Shots

Neil Stern, senior partner with Chicago-based Ebeltoft USA/McMillanDoolittle, offered a “Visual Journal of Global Retail and Meat Trends,” with an international look at how retailers are exploring new formats and new trends in visual merchandising, and experimenting with new disruptive business models.

With consumers and their needs more diverse than ever, retailers must “understand and respond, or disappear,” Stern said. With the rapid adaptation of technology, he continued, it’s “digisumers” who are calling the shots in retail.

Among Stern’s key points:

• “Local” resonates with freshness, sustainability and community support.
• Foodservice mashups bring theater to retail grocery.
• Retailers must boldly deliver experiences that can’t be duplicated online.
• Experiences must reflect demographic specialization; the Millennial population is 35 percent ethnic.
• Grocers should experiment with new ways to reach shoppers, such as food trucks, curbside pickup, home meal delivery and vending. “We’re really seeing profound changes happening in the marketplace,” Stern declared.

In common with Stern, Wade Hanson, principal with Chicago-based Technomic Inc., singled out foodservice as a must-have in his presentation, “The Changing Face of Supermarket Foodservice and the Keys to Long-term Success.”

Restaurants “are looking at this as a threat to their business,” Hanson said of the evolution and refinement of supermarket prepared foods. “The growth potential is there, much more so than other areas of the grocery industry.” In fact, he said, grocery foodservice can expect 7.5 percent annual growth over the next 10 years.

And in Technomic’s latest consumer ranking of the top 10 foodservice operators, four of them are grocers, including the top-ranked Wegmans Food Markets, along with Mariano’s and Standard Market in the Chicago area, Market Bistro by Price Chopper in New York, and Kroger’s Chef on the Run, which Hanson named as standouts in this category.

So important is foodservice to grocery, Hanson asserted, that without it, grocers risk losing the rest of their overall basket. He cited data showing grocery prepared foods with $25 billion in sales for 2014, up $10 billion since 2004, with foodservice being the No. 1 strategic initiative for many retailers.

Hanson pointed to the following emerging trends in grocery foodservice:

• Breakfast, beverages and dessert are prime opportunities.
• As fresh expands to other channels, grocers are under pressure to more clearly define and own it.
• Brand loyalty will depend on relevance and customization: “Be on-trend and relevant,” he said, “and adapt to your consumer.”

‘The Power of Meat’

Meat and poultry products remain among the top choices for shoppers at retail, but the 10^th annual “Power of Meat” study — published by FMI and NAMI, and sponsored by the Cryovac Brand, a part of Sealed Air’s Food Care Division — highlights several trends in the way consumers are changing their purchasing behavior.

Anne-Marie Roerink, principal at San Antonio-based 210 Analytics, which fielded the study, laid out this in-depth look at the meat category as seen through the shopper’s eyes. Key points include the following:

• Price increases prompted shoppers to seek alternatives: Price hikes for beef and pork caused shifts in buying behavior among 40 percent of shoppers, with most looking for ways to save. Others returned their focus to quality, convenience and nutrition. Consumers most often look at price per pound.
• Shoppers are open to switching among proteins, cuts and brands: Many sought protein outside the meat case, mostly eggs and beans. Millennials are more likely to use meat alternatives for ease of preparation.
• Megatrends affect the meat purchase: Shoppers are influenced by local sourcing, sustainability, health and wellness, and organic, and are looking at leaner cuts and portion control.
• Alternative channels take some of the fresh dollar: Supermarkets remain the dominant outlet for fresh meat and poultry; farmers’ markets are the greatest source of the occasional purchase.
• Meat purchase decisions are increasingly shifting to in-store: While meat and poultry remained well-researched list items for many shoppers, a greater share made the ultimate buying decisions among species, cuts and brand in-store — putting additional emphasis on operational excellence.
• Value-added is a fast-growing but narrow segment: One-quarter of shoppers say they purchase value-added items sometimes or regularly, but for most, cost (21 percent) or preferring to prepare items themselves (46 percent) are the greatest barriers to purchase. Despite all of the value-added solutions provided by food retailing, foodservice continues to win the last-minute dinner decision.
• Full-service counters are highly valued: 63 percent among shoppers with access consider this a store advantage.
• The natural/organic segment continues to grow: The top reasons for purchasing natural/organic are “free-from” and better health and treatment of the animal. For those not yet engaged in the segment, price is the largest barrier.
• Meat and poultry provide nutrition and balance to the diet: Meat is most highly associated with being a source of important nutrients. Millennials are more likely to associate it with functional benefits and de-emphasize enjoyment.
• Winning while faced with volume pressure: Shoppers want better everyday and promotional pricing; and better quality; better in-stock performance and variety in package sizes, cuts and specialty items, along with customer service excellence.

Exhibits and Tasting Expo

An Annual Meat Conference highlight was the annual tasting reception, which this year combined with the lunchtime tech expo to create a five-hour exhibition of meat purveyors and equipment suppliers, featuring more than 60 companies. Among the exhibitors:

• AHT Cooling Systems, launching a propane-fueled cooler, extolled the benefits of its plug-in multideck merchandisers and slim units designed for midaisle placement in alternative store departments.
• Bubba Burger sampled its new veggie burger and beef-based bacon cheddar burger, and also announced a grass-fed burger, to be sold in four-count 1-pound boxes.
• Clemens Food Group sampled new thick-cut, triple-smoked applewood and maple bacon under its Hatfield brand.
• Hillphoenix displayed its Coolgenix 2.0 meat and seafood case with a glycol-based refrigeration system that purports to extend product shelf life.
• Land O’Frost sampled its new Pure and Simple line of antibiotic-free, veg-fed luncheon meats, consisting of two ham and two turkey varieties.
• Miller Poultry is launching Katie’s Best, a full line of Non-GMO Verified chicken that’s vegetarian-fed, air-chilled and free of antibiotics.
• After extensive development, John Morrell Food Group has released a 50 percent reduced-fat hot dog line under the Nathan’s Famous brand, which “doesn’t sacrifice flavor, with half the fat,” said Michael Paribello, senior director of marketing. Cincinnati-based Morrell has also expanded its LunchMakers kid-centric line with breakfast and snack items, and continues to grow its Eckrich smoked sausage business.
• National Beef is targeting Millennials with its Food.eez “recipe-ready” beef cuts, which sport on-pack labels featuring product useage tips and recipes. The line will be supported by a mobile-friendly website.
• Perdue Foods offered dishes prepared with its Simply Smart chicken; the clean-label line, which proclaims “no antibiotics ever,” includes fresh, heat-and-eat and frozen products.
• Sealed Air showed its Darfresh on Tray packaging system that promises to speed plant packaging times, yield no scrap and extend product shelf life. Also on display were examples of the Elmwood Park, N.J.-based company’s evolving microwaveable plated entrée packaging.
• Smithfield Farmland sampled its new dry-rub ribs and pork-based Italian meatballs, and also showed its seasonal flavored-glaze spiral hams.
• Springer Mountain Farms sampled its gluten free breaded chicken breast chunks.
• Tyson Foods showed its Crafted Creations line, which brings several pre-seasoned and pre-marinated beef and pork entrées under a common banner. The 16-item line includes Beef Skirt Steak with Smokey Chili Sauce and Pork Shoulder for Carnitas; packaging includes callouts such as “Great for Grilling” and “Skillet Ready.”

“If you’re not willing to think differently and get creative, you’re vulnerable.”
—Sherry Frey, Nielsen Perishables Croup

“Be on-trend and relevant, and adapt to your consumer.”
—Wade Hanson, Technomic