Making The Case Ready
2012 Meat Conference shares new products and the latest research to help retailers sell more protein.
Meat consumers are more price-conscious than ever before, but they seem to take rising prices as par for the course, paving the way for retailers to concentrate on new value messages.
That's the gist of the latest Power of Meat study presented at the 2012 Meat Conference last month in Orlando, Fla. Hosted by the American Meat Institute (AMI) and the Food Marketing Institute (FMI), the gathering presented the latest data and studies about meat marketing, and featured some of the newest products sampled by more than three dozen suppliers.
Price has taken on an ever-greater role in the meat purchasing decision process, as price per pound has solidified its No. 1 ranking as the most important decision factor for consumers, while total package cost is now the second most important decision factor, surpassing product appearance, according to the seventh annual Power of Meat study.
However, consumers seem to be saying they're resigned to higher prices, paving the way for retailers to stress greater value for the price their customers are paying, according to Michael Uetz, principal at Chicago-based Midan Marketing. "Our biggest challenge is to get consumers beyond the price issue — how do we show them value? How can we help them extend their dollars?" Uetz said.
The study, conducted by San Antonio-based 210 Analytics, was commissioned jointly by AMI and FMI, and sponsored by Duncan, S.C.-based Sealed Air's Cryovac Food Packaging Division. It details the findings of a national online poll conducted last November of 1,340 consumers.
Uetz further stressed opportunities for retailers to help guide consumers on how to select and prepare different cuts of meat and different ways to use them in their daily meals. "We have an opportunity to change their direction and make it something other than price," said Uetz, adding: "Are we truly spending time educating the consumer?"
Study data was supported by on-the-street interviews conducted in downtown Chicago, in which consumers backed up the overall study's key points: Shoppers just assume prices are going to rise; sales influence their shopping, often done at more than one store; and they're cooking more at home and looking for ways to extend meals.
Shoppers who try to save money on groceries typically resort to a variety of moneysaving measures both pre-trip and in the store. But for the first time this year, the share of shoppers simply opting to buy less (and thus spend less) equaled the share using lists, coupons and other saving measures. In terms of meat and poultry, dollar sales increased by 2.5 percent, but volume sales decreased by 5.3 percent as a result of inflation across proteins.
Consumer focus on price and value is further underscored by the growing share of shoppers engaging in pre-trip research and planning meals around promotions. However, an even greater share compares prices while in the store. The end result is greater shopper flexibility to adjust purchases to spend less.
Full-service supermarkets continue to be a stronghold for fresh meat and poultry, with high retention rates and a pickup of shoppers from other channels, especially supercenters. The emphasis on in-store purchasing decisions makes clear signage and effective operations all the more important. Price-related promotions are especially effective for steering people to a certain kind of meat or poultry, and slightly less effective for the amount purchased.
Private-brand meat and poultry remain popular. However, rather than an outright preference, it's better defined as a greater willingness to purchase private brands. This led to an increase in the share of "switchers" — shoppers who don't have a preference for national or private brand, but choose based on other factors, predominantly price. Meanwhile, shoppers' reduced interest in volume-based discounts, such as bulk and buy-one-get-one-free, as measured last year, didn't rebound any this year.
Despite economic pressures, natural and organic meat and poultry experienced an uptick in the number of buyers over the past year, to 24 percent of shoppers. Additionally, 90 percent of shoppers predict they'll buy about the same (70 percent) or more (20 percent) next year.
Meat and poultry play an important role at the American dinner table, with chicken and beef making up the largest share of purchases. The fresh category continues to be much larger than the heat-and-eat and ready-to-eat categories, but the latter continue to show signs of strength for the convenience-oriented shopper.
Another area of growth is marinated meat and poultry, with an increasing share of shoppers preparing their own mixes or purchasing marinades or spice mixes along with meat.
Despite the popularity of meat and poultry, shoppers' knowledge and preparation skills leave much to be desired. When asking for advice on how best to prepare meat or poultry, survey respondents cited family and friends as the predominant source of information, followed by digital resources such as the Internet and mobile apps. Only 6 percent would turn to the butcher or meat department. Yet interest in a "here's-how-it's-done" type of service in the meat department is moderately high, providing suppliers and retailers with an excellent opportunity to connect with shoppers in new ways.
Uetz urged retailers to help guide meat through the marketing mood shift from "what to avoid" to "what to include," and join the industry in playing up meat's strong nutritional package. "Why should Greek yogurt own protein?" he remarked. "It's ridiculous."
Expert Guidance
Other conference sessions advised retailers on such topics as how to make the best of the current economy, understanding how consumers shop and leveraging the power of social media.
In "Winning in the New Consumer Economy," Jeffrey Gregori, VP of solutions consulting for the Nielsen Co. in Schaumburg, Ill., noted that spending by moderate-income shoppers is up a bit for the first time in two years, and fewer are reducing their grocery spending. However, shoppers are making fewer impulse and stock-up trips to manage budgets and reduce waste.
"People are very selective on how much they're spending," Gregori said, nothing shoppers are working harder to save; coupon redemptions are up 6 percent, though coupon distribution dropped 8 percent in the past year.
Shoppers are engaged in technology more than ever, with 31 percent of all purchases involving some online activity.
Among retailers leveraging digital media: Quincy, Mass.-based Stop & Shop, which is testing a smartphone application that allows shoppers to scan products in their baskets and pay for them online.
"Competition for fresh is heating up," Gregori said, noting that of $176 billion in fresh food sales, 64 percent of total fresh (and 69 percent of meat) is in the grocery channel. While mass retailers and club stores rank second and third, smaller formats like drug stores are growing their fresh selections.
Gregori said shoppers continue to show a willingness to pay for convenience; sales are up for cooked meat (12 percent), deli prepared pizza (8.4 percent) and deli prepared chicken (5.6 percent). Meanwhile, he said rising prices are leading shoppers to "trade down from beef to chicken," with ground beef taking the biggest hit volume-wise. "Chicken is the new ground beef, potentially," Gregori remarked.
In "Understanding Consumer Choices," Sherry Frey, VP at The Perishables Group in Chicago, noted that competition to the meat case "is more fierce than ever," not only from out-side the store, but also from in-store deli and prepared foods. Meat department must "target, attract, persuade ... and delight" shoppers, she said.
On the meat consumer's "decision tree," package size/price is the top consideration, followed by cooking method and type of protein chosen, Frey said, noting that value and price per pound are the most influential purchase criteria.
Demand for value-added products is rising around the perimeter, with value-added meats — sold at a 30 percent price premium — accounting for 4 percent of sales and experiencing 7.7 percent dollar growth and 3.6 percent in volume.
Frey said opportunities for grocers include putting versatile quality cuts elsewhere in the store, cross-merchandised with other meal components, to attract the attention of those who usually avoid the meat department.
In "BRANDvocacy: the New Digital and Social Media Culture, Helen Levinson of Lombard, Ill.-based Desert Rose Design noted that 90 percent of consumers are influenced by peer recommendations.
Meanwhile, 60 percent of companies are raising their e-mail marketing budgets, 54 percent are upping their social media budgets and 37 percent are increasing their search engine budgets, all in response to the Internet's ever-increasing influence on shoppers' spending decisions.
As it relates to retailers, social media is about visibility, engagement and advocacy for brands, according to Levinson. For example, Rochester, N.Y.-based Wegmans Food Markets recently encouraged shoppers to post on Twitter about their experiences at a store grand opening in Massachusetts. "Social media helps create brand advocates to discuss their experiences and influence others," Levinson said.
In an example demonstrating the use of QR codes, U.K.-based grocer Tesco set up "virtual stores" in South Korean subway stations, showing pictures of store shelves; shoppers scanned codes for each product, paid for their groceries and scheduled deliveries on their smartphones. By converting shoppers' waiting time to shopping time, Tesco boosted its online sales 130 percent.
"Social media is not rocket science — it's trial and error," Levinson advised. "Typically, it takes a little time."
"Why should Creek yogurt own protein? It's ridiculous."
—Michael Uetz, Midan Marketing
In Good Taste
The highlight of the annual conference is the product tasting reception, at which 37 exhibitors sampled their wares this year to hungry attendees. Among the new products featured:
Bob Evans Foods sampled fully cooked turkey sausage links and patties, and Oven Bakes microwaveable side dishes, including Hash Brown Bake, Macaroni and Cheese, and Scalloped Potatoes.
Cargill Meat Solutions showed case-ready beef kabobs with onions and peppers, and fresh packaged meatballs.
D'Artagnan sampled its andouille sausage and duck breast.
Farmland Foods offered microwaveable breakfast sandwiches, each with fewer than 200 calories and 6 grams of fat, and Oven Perfect cook-in-bag products.
Hain Pure Protein displayed its FreeBird antibiotic-free chicken, including marinated whole birds and parts in plastic no-tray packs, and offered samples of chicken wings seasoned with South African peri peri, currently an exclusive for Whole Foods Market.
Land O'Frost offered samples of its Blimpie Best sandwich kits, a partnership with the sub shop chain.
Moore Bros. touted its Montana Wagyu sliders, made from the only dry-aged USDA Prime Kobe-style ground beef in the U.S. market.
John Morrell featured 50 percent less sodium bacon and Curly's microwaveable sauceless beef steak.
National Beef displayed Kansas City Steak Co. Asian-style flank steak, flat irons and carne asada inside skirt steaks; Nature Source ground beef in easy-open 1-pound bricks; Steakhouse Originals 97 percent fat-free top sirloin, a gluten-free product touted as the only steak on the market to carry the American Heart Association's Heart-Check mark; and Wolfgang Puck seasoned meat products, soon to be rolled out to stores.
Pilgrim's Pride offered tastes of its Captain Morgan spiced rum Caribbean-style wings, Buffalo-style wings and chicken bacon.
Pineland Farms showed off its all-natural meats and heat-and-eat side dishes, including mashed potatoes.
Sanderson Farms displayed its 100 percent natural chicken, including a marinated rotisserie chicken breast for the foodservice deli.
Sara Lee is extending its popular Ball Park hot dog brand to a new line of fully cooked frozen beef patties in resealable bags, in beef, beef and onion, and beef and cheese varieties. The company also sampled Jimmy Dean breakfast quesadillas.
Smithfield showed pouch-pack bacon, rosemary-and-olive-oil-marinated pork and a glazed ham steak.
Tyson Foods' offerings included Backyard Flavors seasoned sirloin tri-tips, Tyson teriyaki pork sparerib mini racks and Wright steakhouse-flavored bacon.