Leveraging Fresh


Annual Meat Conference offers grocers insights for managing ‘need states’ and appealing to Millennials.

“If someone wants to pay $8 for a chicken breast, I’m willing to sell it to them.”

That rejoinder belonged to Kelly Mortensen, meat director for Salt Lake City-based Associated Food Stores, in discussing the continued growth in natural and organic meat sales, during the 2014 Annual Meat Conference. Organics is the one meat subsegment where consumers’ choices aren’t primarily motivated by price, so grocers have an opportunity to cash in by delivering on promises of quality, selection, and health and wellness.

This was just one of the topics tackled by Mortensen and his fellow panelists discussing the 2014 Power of Meat study, rolled out in the final session of this year’s conference, held Feb. 16–18 at the Atlanta Marriott Marquis.

Shoppers place high importance on value, quality and variety when making purchasing decisions in the meat aisle, according to the survey published by American Meat Institute (AMI) and Food Marketing Institute (FMI). The ninth annual report, conducted by 210 Analytics in partnership with Sealed Air’s Cryovac brand, explores purchasing, preparation and consumption trends through the eyes of shoppers.

What should be the best news for grocers: The supermarket continues to dominate as the primary destination for meat-eating consumers — 62 percent of shoppers get their meat at the supermarket, followed by supercenters, specialty grocers and butcher shops.

As the number of home-cooked meals containing meat or poultry increased slightly from 3.6 to 3.8 dinners per week, consumption of heat-and-eat and ready-to-eat items also increased. Panelist Nancy Chagares, SVP of fresh for Jacksonville, Fla.-based Bi-Lo Holdings, said grocers need to deliver more variety in value-added and seasoned items, as well as package sizes. “Answering their needs will be key to keeping more shoppers in the supermarket,” she noted.

In addition to quality, the study affirmed that strong customer service, in-stock performance and variety are the main drivers of meat department satisfaction. Shoppers not only value service, but also would absolutely (33 percent) or maybe (53 percent) use hands-on preparation and recipe tips.

Meanwhile, the report also found that health and wellness continues to represent a growing trend in decision-making in the meat aisle. The industry needs to be more proactive than reactive in getting the message out about meat nutrition, said Michael Uetz, principal at Chicago-based Midan Marketing. “If we don’t take extra steps to provide more information, we’re going to lose out,” he warned.

Although price remains the leading factor in purchasing decisions, the Power of Meat suggests price’s dominance is losing steam in relation to other factors like package size, product appearance and nutrition.

Even so, 83 percent of shoppers check promotions across stores, with the paper circular being the most commonly used research tool. Of course, as was repeatedly noted throughout the conference, grocers need to step up their digital game to better connect with Millennials as this increasingly influential and tech-savvy consumer bloc grows to eclipse Baby Boomers in purchasing power.

The complete study is available online at www.meatconference.com/POM2014.

Taking the Pulse of Shoppers

Other conference session topics included consumer trends, category management, social media and use of antibiotics in meat production.

Shopper behavior dominated presentations by Barbara Ford, SVP of AMG Strategic Advisors at Jacksonville-based Acosta Sales and Marketing, who recounted a “tale of two shoppers” revealed by Acosta’s latest studies.

Consumers making less than $45,000 per year, comprising 46 percent of total shoppers, purchase less meat and buy cheaper cuts to make ends meet. Seeking a balance of price and value, these consumers will purchase more so-called “filling foods” over “healthy foods,” because they’re less expensive and last longer, Ford said. Meanwhile, higher-income folks — the 15 percent making $100,000 a year or more — tend to buy leaner cuts, more seafood and more natural/organic items. They’re willing to pay more for convenience items like ready-to-eat meals and value-added meats, and tend to shop the deli more often, while lower-income consumers are shopping the deli less.

Meanwhile, Gen Xers and shoppers with children plan to spend more on meat and poultry in the coming year. In fact, spending by Millennials will surpass that of Baby Boomers by 2018, a $65 billion shift, Ford noted. However, while older shoppers are more faithful to traditional grocers (responsible for 65 percent of total meat sales), the mass channel is coming on strong, as Millennials are more likely to shop other channels. At the same time, Millennials are far less confident than their older counterparts in their ability to prepare meat and poultry beyond grinds and boneless, skinless chicken breast.

Millennials are looking beyond traditional grocers because most find supermarkets to be sterile, crowded, unpleasant and uninviting, Ford said, noting that grocers would be wise to engage this demographic with a strong mobile presence.

Ford also identified the emergence of the “grocerant,” or grocery stores acting as restaurants by expanding their deli prepared food offerings to be at or close to par with restaurants. She added that Millennials “are way ahead of total shoppers” at bringing home prepared foods for dinner.

Jack Li, managing director of Chicago-based Datassentials, reinforced the importance of grocery food-service, noting the strong “Deli 2.0” trend as grocers seek to mimic fast-casual establishments and many shoppers visit the supermarket just to eat a meal.

Li tracked the evolution of new flavor trends, noting that cuisines once considered exotic, like Chinese, Mexican and Italian, have long since become ubiquitous to American palates. Meanwhile, others, like Mediterranean and Southern, are proliferating; Korean is coming on strong; Thai and Indian are making a comeback; and Peruvian is starting to emerge.

Meeting Needs

Category management is rapidly morphing into “need state” management — or at least should be, according to Gordon Wade, CEO of the Wimberly, Texas-based Category Management Association. It’s not happening more quickly because most grocers aren’t able to crunch Big Data to their best advantage, Wade asserted in his session, “How Category Management and the Meat Case Can Save the Grocer!”

Traditional grocers are struggling with “leakage” to other channels in many categories, in particular baby care; Wade noted that 25 percent of all diapers are sold by Amazon, an edge that he said supermarkets will never be able to overcome.

“The only strategic benefit a grocer has is freshness,” Wade declared, explaining that grocers need to leverage their fresh offerings, meat in particular, and address shoppers’ need states by driving traffic to other categories that complement fresh proteins. “Winning the dinner need state is absolutely critical to the grocer,” Wade said, defining a “need state” as a multifaceted shopper requirement and emotional attitude that create a desire for a comprehensive solution.

Key protein-centric areas that Wade noted as right up grocers’ alleys are family dining, cultural cuisine, weight control, health and wellness, gluten-free, natural/organic, and value.

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