Selling The Sizzle

Retailers and suppliers heat up their summer grilling promotions.

From simple recipes and brand partnerships to sweepstakes and holiday tie-ins, grocers and meat suppliers alike are stoking the coals toward a lucrative season of summertime grilling.

Most of the major meat varieties are ready with their seasonal campaigns to tell consumers why their products are a cut above when teamed with the hot sun and a cold beer. And despite recent price increases, beef is out to demonstrate its primacy in outdoor cooking.

For example, St. Louis-based Schnuck Markets Inc. has teamed up with Certified Angus Beef. “We're taking a firmer stand on quality of product, and the Certified Angus Beef brand ties into it by being the best beef available,” says Ed Meyer, Schnucks VP of meat and seafood. “We'll have continuous promotions on steaks throughout summer.”

Meyer says Schnucks' summer promo will include live radio spots at two store locations, stories about quality in the chain's Schnucks Cooks magazine, sampling of traditional middle-meat cuts at community events, and a 10-week contest for managers that's focused on growing the amount of products sold. “We wanted to create a fun way of involving our team leaders and rewarding their efforts,” he explains.

A key difference in this summer's promotions, according to Meyer, is “the amount of effort we're putting into grilling beef steaks. In years past, we'd feature grilling hot dogs and sausages.”

The Schnucks campaign is a riff on Certified Angus' core theme this year, “Steaks of Summer,” which also includes retailers such as Meijer, Price Chopper, Reasors, Foodland, Buehler's, Acme, and Strack & Van Til.

The foundation of the promotion is in-store point-of-sales and advertising, explains Deanna Walenciak, director of marketing for the Wooster, Ohio-based brand. “We are more focused on summer grilling promotions this year than previous years simply because we have seen the results that can be achieved when we join our partners, support their efforts and focus on steak sales,” she says. “We are creating excitement and driving additional traffic to our store partners via on-air radio promotions where consumers can win a grill or steaks.”

Customer interaction is important, Walenciak affirms. “When knowledgeable meat department staff engage customers, they can help them select the best cut for the grill or try a new item like the flat iron,” she says. “Consumers are hungry for basic grilling tips and new cuts that will perform great on the grill.”

Meanwhile, Wichita, Kan.based Cargill is heavily promoting its own AngusPride beef brand, which many of its retail customers adopt as their own private label for popular cuts like ribeyes, strips and filets.

“Our goal is to help them become the preferred destination for consumers' grilling needs,” says Ivan Brown, Cargill's Angus brand manager. “We do this by identifying unique insights to help our customers succeed during this highly competitive time of year. This year, we know that consumers' budgets continue to be stretched. So, we looked for a way to keep beef top of mind and at the center of the grill.”

Cargill's “Sizzling Summer” giveaways include cash prizes for steak purchases; consumers can enter to win through on-pack stickers or via the Microsoft Tag barcode on packages by using their smartphones. “Consumers are growing more familiar with these mobile barcodes as Tags are being included in magazine ads, can be seen in airports and in various retail stores,” Brown notes. “By doing so, our AngusPride beef brand is helping consumers stay connected to what is traditionally considered a commodity product.”

In addition to traditional POS elements, Cargill also helps retailers connect its Angus promos to their overall summer promotion plan. For example, one retail partner has offered AngusPride for 10 years, so Cargill is helping to celebrate the milestone with a series of grilling events and sampling. “This ties nicely with the Sizzling Summer giveaway, but it also honors their efforts, and provides an opportunity to directly connect with shoppers and build brand loyalty,” Brown says.

Moo-ving Merchandise

When it comes to burgers, Tyson expects to ramp up sales of its Premium Grind products this summer with a ground beef promotion in July and August. Including Angus and source grinds, the promotion will offer a sweepstakes and POS to generate consumer excitement about upgrading to premium ground beef this summer, says Kent Harrison, VP of marketing and value creation at Dakota Dunes, S.D-based Tyson Fresh Meats.

Not to neglect other cuts, Tyson's Star Ranch Angus beef brand is kicking off its summer grilling season with a promotion through July that directs consumers to the brand's website to sign up for a free seasoning packet. POS will also include a 75-cent coupon toward any Star Ranch Angus beef purchase. The campaign will be promoted on the brand website, Facebook and Twitter.

Further, Tyson has launched a consumer website for its Chairman's Reserve Premium Meats brand, made up of Prime and upper 2/3 Choice grades of beef, and all-natural, non-enhanced pork. The site offers product information, recipes and cooking tips for beef and pork.

Finally, Tyson has launched Backyard Flavors, a line of pre-seasoned beef products in convenient vacuumpacked, leak-proof, clear packaging. The line currently features ready-to-cook beef sirloin tri-tips that claim “just off the grill” taste in Steakhouse, Peppercorn and Santa Maria flavors. “The new line enables retailers to add variety to their meat case and meet the increasing consumer demand for simple meal solutions,” Harrison explains. “Backyard Flavors product packages include basic cooking instructions and a cutting guide to give consumers the best eating experience possible.”

More broadly, the National Cattlemen's Beef Association (NCBA), which coordinates the Beef Checkoff program, teams with companies that engage retailers to extend promotions at the store level, says Penny Nau, promotions director at Centennial, Colo.-based NCBA.

For example, as part of Sutter Home Wines' stalwart “Build a Better Burger” grilling promotion, two partners, NatureSweet tomatoes and King's Hawaiian, are offering money-off coupons through on-pack labels with Safeway, H-E-B and Supervalu. “We supply checkoff-funded point of sale like meat case signage, on-pack labels and other elements, which are easily implemented in stores,” Nau explains. “Our network of 45 state beef councils provides additional materials and support at the local level.”

Nationally, NCBA is joining with Sam's Club and the Kansas City Barbeque Society to help customers improve their grilling acumen. Eighteen Sam's Club locations across the country will host outdoor beef-cooking demos starting this month, highlighting four separate beef cuts and showcasing various techniques like rubs and marinades, at a variety of price points.

Prices Hikes Threaten Summer Sales contributed by the perishables group

How long will food prices keep rising? How high will they go? At what point will consumers walk away from the meat department? The industry is grappling with these questions, knowing that lost meat department sales can substantially impact the health of the entire store.

The meat department sustained the largest average retail price increases of all fresh departments in the 52 weeks ending March 26, 2011, rising 6.5 percent compared with the prior year, according to Perishables Group point-of-sale supermarket data. The price increases were more drastic in the four weeks ending March 26, with the average retail price up 9.4 percent. Promotional pricing is following suit, increasing at an even greater rate than everyday prices, resulting in an 11.5 percentage-point decrease in promotional discounts.

Looking at own-price elasticity across all cuts within beef, pork and chicken, strong patterns are visible.

Unfortunately, consumers appear to be responding negatively. FreshFacts Shopper Insights, which employs loyalty card data to measure the shopping behavior of 31 million households, reveals that the number of fresh meat purchase trips per buyer declined 1.7 percent during the 52-week period ending March 26, 2011, vs. the prior year. Further, the amount of fresh meat that the average consumer purchased grew 1 percent in dollars but declined 5.7 percent in volume.

To better understand consumers' purchase dynamics in relation to price changes in the fresh meat case across proteins and between cuts, the Perishables Group executed a price elasticity study for beef, chicken and pork. The study modeled both own-price elasticity and cross-price elasticity of cuts by protein to determine how price changes would affect respective volume. Through a more comprehensive understanding of price sensitivity and cross-price elasticities of beef, pork and chicken cuts, the industry can more effectively implement targeted pricing strategies to maximize department sales.

Looking at own-price elasticity across all cuts within beef, pork and chicken, strong patterns are visible.

Fresh pork was the most inelastic protein, indicating demand changes minimally if prices increased or decreased. Pork, which has a lower household penetration and trips per buyer than beef and chicken, overall is priced between chicken and beef. However, pork experienced the greatest price increases over the latest 52 weeks, 11.3 percent vs. 7.7 percent for beef, and 3 percent for chicken. Despite the price increases, pork declined only 0.5 percent trips per buyer, while beef declined 2.7 percent and chicken declined 3.2 percent, indicating a dedicated pork consumer base.

Picnic shoulder — the lowest-priced fresh pork cut, with an average retail price of $1.34 per pound — was the least affected by price changes vs. other fresh proteins in the United States. In the Central region, where fresh pork has the strongest dollar velocity, picnic shoulder was especially unresponsive to changes in pricing. While not much picnic shoulder is sold in the Central region, it has a loyal base in stores where it is sold.

Compared with the other regions, shoppers in the Central region were the least likely to change their buying behavior of pork ribs, offal pork, ground pork and side. However, pork loin and ham/leg were more sensitive to price changes in the Central region than any other region. Pork loin, which makes up almost 70 percent of fresh pork volume in the Central region, is consumed more regularly; consumers therefore have a better sense of everyday prices, and thus are more sensitive to price changes.

On the other side of the own-price elasticity spectrum, value-added chicken was the most sensitive to price changes. A 10 percent increase in the price of value-added chicken will result in a 45 percent decline in volume. This finding suggests that value-added chicken is nice to have — but only if the price is right.

Even though consumers are sensitive to price changes in value-added chicken, sales are increasing as consumer interest in convenient meat products grows. Value-added chicken sales have increased total dollars and volume by 7.5 percent and 10.6 percent, respectively, over the latest 52 weeks.

Premium steak had the highest likelihood of shoppers switching proteins compared with the other fresh meat cuts.

In fresh beef, consumers appear to be paying more attention to the prices of beef cuts in their search for value. Demand for premium beef steak cuts, which include ribeye, porterhouse and tenderloin steaks, fluctuated based on price changes. For every 10 percent reduction in average retail price, volume of premium steaks sold increased 40 percent.

Premium steak was most responsive to price changes in the East region, followed by the South. The Central region, the only region where fresh beef exhibited positive compounded growth since 2006 and had the lowest average retail price, was the least sensitive to price variance in comparison with the other regions. This indicates the value perception of the cut is important; if consumers believe premium steak to be at a good price relative to other cuts, they will be less sensitive to price increases.

Premium steak had the highest likelihood of shoppers switching proteins compared with the other fresh meat cuts. When consumers declined to purchase premium steaks at higher prices, there wasn't a consistent substitute. Rather, a percentage of shoppers turned to other planned-occasion cuts such as whole chickens and beef roasts, and still others opted for versatile quick cuts such as ground beef or chicken drumsticks. Interestingly, ground beef was a substitute for a number of beef and chicken cuts, including everyday steaks and boneless, skinless chicken breasts.

As retail meat prices continue to rise in 2011, specific strategies centered on cuts rather than protein can help discourage consumers from automatically trading down within the protein or out of the department completely. For fresh meat cuts that are highly sensitive to price changes, it's important to recognize that discounts can generate strong lifts. Margin can be maximized on inelastic cuts, while generating volume with more elastic cuts.

For data on additional cuts of meat or other information, visit www.perishablesgroup.com.

Offering a total of $400,000 in prize money, the Inaugural Sam's Club National BBQ_Tour will feature 20 local qualifying events, five regional events, and one national championship in Walmart's hometown of Bentonville, Ark.

Further nationwide checkoff summer grilling promos include Anheuser-Busch, Major League Baseball, Mrs. Dash seasonings, the American Egg Board and New York Style Bagel Crisps. On the state level, the Northeast Beef Promotion is holding a sweepstakes to promote summer grilling in the Northeast, and the Kansas, California and Nevada beef councils are hosting Father's Day promotions.

“Beef commands 8 percent of total supermarket sales and 52 percent of meat department sales; therefore, these promotions are geared towards helping retailers leverage one of their most profitable items to boost sales and build shopper loyalty,” Nau says. “In fact, we hold ourselves accountable for ensuring that each promotion increases beef sales in targeted retailers by at least 7 percent during the promotional period.”

That said, NCBA is sensitive to the rising cost of beef. “Market research shows that beef is hands-down the protein of choice when it comes to grilling, and we expect beef to be the go-to choice for grilling this summer, as it's been in previous years,” Nau says. “While rising food and energy costs will weigh on consumers' purchasing behaviors, retailers can capitalize on featuring checkoff-funded promotions to offer purchase incentives and draw shoppers to their stores.”

In fact, Nau says, a checkoff poll of consumers showed that retailers that continue to feature beef in their weekly ads, even if it's not on sale, will drive meat case sales. Further, she notes: Consumer preference for steak is so strong that 43 percent said they will absolutely not give up grilling steaks, no matter the cost.

Oinks, Gobbles and Clucks

“But some expect an upswing in sales for other meats this grilling season. “The summer is an excellent time to feature both pork and poultry, which performs fantastically on the grill,” says Kelly Mortensen, meat director for Salt Lake City-based Associated Food Stores. “It may take some education to get consumers to start to heavily grill those items in place of beef. Pork costs have risen, but not to the extent of the beef category. … A thick-cut pork chop on the grill can rival any beef steak if it is not overcooked. Bratwurst, which is not a mainstay in our market, has a potential to gain ground because of the economics of the meat case. You will see us promoting brats a lot this summer.”

Patrick Fleming, director of retail marketing for the National Pork Board in Des Moines, says the grilling season is a great opportunity to promote items like pork back ribs and spare ribs. “Items like boneless pork chops and thick-cut chops are great products to keep front and center in featuring throughout the summer months, because they provide retailers with strong sales and give consumers more grilling options,” he says.

Fleming cites marketing data showing that pork ribs and chops historically are top sellers for the major grilling holidays: Memorial Day Father's Day, July 4th and Labor Day. In contrast, boneless chops consistently claimed the top-selling spot by volume for all of the non-holiday weeks from Father's Day through Labor Day. “Retailers can maximize sales by consistently featuring boneless loin chops throughout the summer,” he says.

Bold Flavors in Store for Summer Grilling

What's influencing popular flavors on the grill this summer? Big spice profiles, regional American twists, adventurous global inspirations and new tart-sweet combinations will all play a part in summer cuisine, according to the new McCormick Grill Mates and Lawry's “Flavor Forecast 2011: Grilling Edition.”

“We see the growing obsession with bolder and more exciting tastes reach a fever pitch during grilling season,” says Mary Beth Harrington of Hunt Valley, Md.-based McCormick. “There's a real willingness to try new flavors and preparations. For example, now that grillers are confident in a basic grilled steak, they're adding big flavor with a zesty balsamic marinade and serving it sliced over a colorful salad, with a sweet and tangy blueberry dressing.”

Four trends are firing up flavor this season:

■ The New Tart 'n Sweet: Sour ingredients that pair well with fruits and naturally sweet flavors.

■ Regional American Fire: Unique local ingredients and regional techniques.

■ Hot, Hotter, Hottest: From earthy ancho to smoky chipotle to red-hot cayenne, grillers are mixing and matching heat and flavors.

■ Flames of Adventure: Backyard chefs of all skill levels are more willing than ever to try daring flavor combinations.

The report also suggests these trends will come to life in five ways:

■ Smoke and Craft Brews: Regional American beers cleverly infused through a range of smoky ingredients and techniques.

■ Mustard and Sweet Onion: Mustard is a lip-smacking counterpoint to the higher sugar content in mild sweet onions.

■ Fiery Peppers and Grilled Corn: Sweet and smoky grilled corn delivers the right contrast to offset the heat of peppers.

■ Paprika and Orange: Colorful sweet paprika meets the citrusy pop of orange in Latin, North African, Spanish and other recipes.

■ Balsamic and Blueberry: The berry joins tangy balsamic vinegar for sauces, marinades and salsas, as well as summertime sweets and beverages.

Meanwhile, McCormick is enhancing its focus on the Latino market with the launch of a major new marketing campaign that kicked off at the start of the grilling season. The campaign started with the 26-city Asando Sabroso (Grilling with Flavor) tour, beginning in San Antonio on May 5. A McCormick-branded food truck offered product samples, flavor ideas and two tacos — a carne asada taco seasoned with Grill Mates Montreal Steak Seasoning, and a chipotle chicken taco, showcasing other McCormick spices — for a minimum $1 donation to a scholarship fund to help Latino students attend the Culinary Institute of America.

“Latinos share McCormick's passion for flavor, and the grilling season is a perfect time to showcase new flavors and recipes,” says Valentin Ramirez, McCormick VP/managing director of Hispanic consumer markets. The multimillion-dollar campaign includes national and regional television advertising with spots appearing on top Hispanic networks, as well as regional radio advertising. Additional campaign elements include in-store support with displays, recipes and special pricing, and a Spanish-language website that encourages exploration of new flavors and the sharing of kitchen-tested recipes. Social media engagement will be active during all tour stops.

How America Grills

Earlier this year, the Beef Checkoff conducted a study and, based on the data, compiled a grilling profile of U.S. consumers. Results included the following (edited for space):

■ The most popular holidays for grilling are July 4th, Labor Day and Memorial Day, but millennials are significantly less likely to grill on Labor Day and Memorial Day.

■ 69 percent of grillers say beef is the meat they most often cook on the grill, with men (73 percent) citing it slightly more than women (65 percent).

■ Men (77 percent) are much more likely than women (23 percent) to be a household's primary griller.

■ When it comes to cooking ground beef, 48 percent of consumers choose lean, 30 percent prefer regular and 22 percent grill extra-lean ground beef.

■ When asked what kind of steak they prefer to grill, 18 percent of millennials, compared with 12 percent of older consumers, said “Whatever is on sale.”

■ Steak (54 percent) wins over burgers (42 percent) as the type of beef cut most often grilled.

■ Four steaks — ribeye (22 percent), sirloin (12 percent), T-bone (11 percent) and tenderloin (11 percent) — account for more than half of Americans' “favorite steak cut for the grill.”

■ A third of consumers say there are certain foods they won't sacrifice at their backyard barbeques regardless of the cost. Of that group, 63 percent say they won't give up beef, with 43 percent specifically citing steak.

■ Consumers in the Northeast are the most frequent summer grillers, with more than half (53 percent) firing up the barbeque at least twice a week compared with all respondents (31 percent). Southerners are the least active summer grillers, with only 28 percent saying they grill at least twice a week.

Fleming suggests retailers “summerize” their meat departments with pork-centric signage, cross-merchandise with barbecue sauces and fresh herbs, and offer simple recipe cards with quick-fix menu ideas for easy summertime grilling.

Poultry is also poised for growth this summer, Mortensen says. “Whole turkey breasts can be great on the grill if some finesse is used and not rushed. Our ground turkey category is off the charts currently, which could play an increasing role on the grill this summer,” he says. “Chicken is popular already on the grill, but I seeing it becoming most popular this year due to the economics of the meat case. I expect we will sell record amounts of chicken breasts this year as well as parts.”

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