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Supermarket FRESH FOOD Business: Excellence in action

The pace of change and the level of competition may have grown increasingly fierce in recent years, but two highly significant constants remain: Quality-minded grocers continue to use their meat departments as an integral part of their images and brands, and most shoppers still buy their fresh meat products at their local supermarkets.

As is true of nearly every year in the past decade, the challenges confronting the fresh meat sector in the past 12-month period -- characterized largely by the inescapable and mounting influence of Wal-Mart -- have placed pressure on U.S. food retailers like never before. Even so, the turbulent climate has helped some of the best operators become even better with safer, friendlier, more innovative meat departments that have greatly improved the shopping experience with consistent quality, convenience, and variety.

This story takes a closer look at recent promotional and partnership efforts that have enabled three already strong retail organizations -- Holiday Quality Foods, Wakefern Food Corp., and Ukrop's -- to earn special designation as outstanding meat retailers.

Holiday Quality Foods, Cottonwood, Calif.

If you walk up to the meat counter of any Holiday Quality Foods store, you instantly spot a difference. Because they know they're providing the best meat in the marketplace, employees are knowledgeable, passionate, and confident about the meat that they recommend to customers. That knowledge, passion, and confidence rub off on consumers, allowing Holiday Quality Foods to develop a loyal customer base and carve out a niche in the northern California market.

Much of the credit for HQF's successful meat-marketing efforts can be traced to Dave Parrish, meat director for the Cottonwood, Calif.-based family-held chain that currently has two new stores slated to open next year. Says Parrish, who started as a meat apprentice with the 24-store company 27 years ago, "We pride ourselves on having a niche as a neighborhood grocery store, and we don't try to butt heads with the larger chains."

While a number of other independent competitors have gone by the wayside in HQF's marketing territories, according to Parrish, "We've been able to survive pretty much most anything that's been thrown at us over the years because of having a niche marketing plan and sticking to it."

With stores ranging in size from 12,000 square feet to 40,000 square feet, many of which are in recreational communities and near country clubs, HQF has had great success in developing a high-end position with its meat program, thanks largely to "a keen understanding and appreciation for what branded programs can do for us," Parrish says. "We really work hard to take care of our customers, and we take a lot of pride and put a lot of emphasis on our meat and other perishable departments," all of which, he adds, "are equally important to one another to make the total effort complete."

Another key factor in HQF's strong meat program, Parrish says, is "working with companies with which we can build excellent branded partnerships." HQF's Prairie Fresh pork program hails from Shawnee Mission, Kan.-based Seaboard Farms, which, in addition to its food safety commitment, has been recognized for its aggressive research and proactive environmental standards, Parrish notes.

For its poultry lines HQF offers Mrs. Mitchell Free Range Turkeys, raised locally in northern California, and Foster Farms' locally grown chicken, says Parrish, adding that the high point of its meat offerings is its exclusive line of Sterling Silver brand certified-Choice beef, produced by Wichita, Kan.-based Cargill Meat Solutions (formerly known as Excel Corp.).

Prior to switching to Sterling Silver two years ago, Parrish recalls: "We had another beef program we were on for roughly 15 years with a local West Coast company, but things started happening. Relationships were deteriorating, there was a high amount of turnover within the ranks of many of their longtime people, and on top of that we started hearing feedback from customers about quality concerns, so obviously something had changed."

After spending roughly a year evaluating options, Parrish says he was "intrigued by several things about the Sterling Silver line," especially Cargill's offer of exclusivity in the northern California market. "That was a big thing for us as niche marketer. From there, we were very impressed with how they presented the program, as well as their proposed marketing efforts."

In terms of flavor, visibility, and consistency, Sterling Silver is an excellent product, Parrish says. "You can go out and brand anything you want, but if the marketing and the quality don't stand behind it, it's not going to happen with regard to repeat sales," he adds.

Currently carrying "in the neighborhood of about 40 cuts," the HQF/Sterling Silver alliance began two years ago "with a small four-foot section in the counter, with about three items," according to Parrish. After testing the beef in all stores and receiving considerable positive feedback on the program, HQF made a full conversion to Sterling Silver and hasn't looked back since.

With most of HQF's fresh meat volume done in the beef category, Parrish says the chain didn't make the conversion without due deliberation. "We went in knowing we would have to put a lot of effort into convincing our customers this was the right move. But the single thing that helped the most was the excellent training they gave all of our meat managers to educate them on all the products and brand attributes. Training was a huge part of the success," he notes.

Sterling Silver brand manager John Niemann says Holiday Quality Foods "is not just a retailer that happens to sell our product. We have a unique relationship -- they share our values and are committed to making the meat counter a destination for shoppers. Our brand philosophy has always been to provide a product that can deliver a high-quality eating experience every time and to team with retailers that are committed to providing high-quality customer service day in and day out."

Looking ahead, Niemann says the tremendous growth in sales bodes well for both parties. "We believe that through our continued commitment to providing the highest-quality product and their commitment to providing the highest-quality customer service, the sales increases we've seen in the last year will continue to grow and thrive."

Wakefern Food Corp./ ShopRite Supermarkets, Elizabeth, N.J.

"Meat continues to be the No. 1 focal point for customers in their meal-building decisions," according to Mark Greenberg, v.p. of the meat division at Wakefern Food Corp., the wholesale, marketing, and distribution arm of the 200-plus ShopRite stores located throughout New Jersey, New York, Connecticut, Pennsylvania, and Delaware.

For that reason, Greenberg says, the big emphasis Wakefern places on its meat program underscores the retailer's commitment to improving the shopping experience in that all-important department with consistent, high-quality offerings emphasizing quality, convenience, value, and variety.

Further, since most consumers take their meat purchasing very seriously, Greenberg says Wakefern is in the process of rolling out a new program to build loyalty and improve customer confidence by inviting shoppers to "Ask the Butcher."

Corporate spokeswoman Karen Meleta says the newly created program "encourages customers to seek out meat department staff for assistance in determining portion sizes, selection, preparation, storage and handling tips, and any other general recommendations they may need." Since ShopRite's "meat experts have the experience and knowledge to answer consumers' toughest questions, we want to make our customers aware that they can rely on them for information on a regular basis," she notes.

Another important way to help consumers better navigate the department is to have recipe centers available in all of ShopRite's meat departments, says Meleta, adding that as the rollout of "Ask the Butcher" continues, "our goal is to make ShopRite the destination of choice for customers."

In tandem with ShopRite's commitment to maintaining "consistent levels of quality to ensure what the customer's eating experience will be," Meleta says ShopRite enjoyed particularly strong meat sales this past summer when it embarked on a revised merchandising strategy for its Certified Angus Beef (CAB) line.

The process began by reorganizing meat cases and expanding self-service displays by merchandising the weekly Certified Angus Beef feature next to the same USDA Choice cut, Meleta says, with case dividers, black trays, and labels providing clear brand identification.

"The brand has loosened its guidelines from earlier days. After we had the freedom to integrate the brand, it gave us the exposure and the opportunity to take sales to another level," observes Meleta, adding that the revised strategy has also improved the stores' competitive position.

"It's made our company different in the eyes of consumers -- we have better quality than the competitors," she says, adding that she expects this year's round of customer surveys to show improvement in stores' overall quality image.

"Putting the Certified Angus Beef cuts right next to other beef products lets customers decide. We're doing more business and trading customers up to a more profitable item," Meleta says. "It's been a plus in all our stores."

ShopRite also took the brand beyond the service case in many stores for the first time. Other stores expanded their self-service cases up to 40 additional linear feet, which gave the stores flexibility to merchandise the entire subprimal as well as forequarters, Meleta explains.

To tie the package together, ShopRite placed a stronger emphasis on ads and POS. "We did a better job displaying it on the front page and in stores," she says. "We wanted consumers to know there's a difference in brands and we carry the best." The chain worked with CAB's marketing team to develop supplemental POS, while stores used Friday and Saturday demonstrations and in-store announcements to bolster the efforts.

Additional reinforcement came with staff training, says Meleta, pointing to a sales contest that rewarded the entire team in each winning meat department. The grand prize was dinner for the top team and its special guests in New York City. Certificates and brand merchandise were awarded to four finalist teams.

"It was a small price to pay for the gains we've made," Meleta says. "We had to be fair to all, whether large- or small-volume." Stores were evaluated on the highest CAB retail sales as a percent of total retail meat sales, highest percent increase in CAB sales, pictures of displays, and use of black trays and package labels.

Because the chain is a co-op, changes can't be dictated and are not the same in every store, according to Meleta, who adds that regional merchandisers also worked with each department to identify opportunities for improving service. Some stores added family packs, while those with ethnic customers began carrying more round and chuck cuts to satisfy their preferences.

Ukrop's Super Markets, Richmond, Va.

Although the commodity meat business was seen by many as a fact of life, some retail pioneers, like Ukrop's Super Markets, Inc., saw it as an opportunity. To be sure, long before the recent concerns surrounding mad cow disease surfaced late last year, Ukrop's has been at the forefront of emphasizing food safety, as well as top-quality products and high-end merchandising, in its meat departments.

Since 1993 Ukrop's has used a ranch-to-retail program that continues to evolve and prosper. In 1997 the Richmond, Va.-based chain, which operates 28 supermarkets and one Joe's Market, as well as central bakery and prepared foods facilities and a distribution center, has built its fresh beef program around a "Ukrop's Own" private label program in conjunction with PM Beef Group of Kansas City, Mo.

Using the quality assurance provided by PM Beef as a key to its marketing and the advantages of central packaging to improve in-store merchandising, reduce shrink, and optimize the product mix, the process-verified program has become a highly visible part of the chain's quality message in its meat departments, says Alan Warren, Ukrop's director of meat and seafood.

"We've been telling customers for the past nine years about our source verification, but all of a sudden we now have their ear," observes Warren, who notes that since the inception of Ukrop's Own Beef (UOB), "we have always considered the safety of our beef as important as its flavor and tenderness."

On Jan. 2, Warren says the company called on all of its meat managers to attend a meeting in which "an intense training session was conducted to ensure that our meat staff was fully prepared to respond to any BSE-related consumer inquiries." During the meeting Ukrop's senior meat officials reviewed the many pertinent attributes of the process-verified program with its store management personnel, in addition to distributing new pocket cards, brochures, and posters for all stores as part of its consumer education efforts.

Interestingly, in the week following the news about the first reported U.S. incidence of mad cow, "there was a 5 percent drop-off in fresh beef sales, but after that it came right back," Warren says. "To date, we've received only three phone calls and two e-mails from customers concerned about beef safety."

In addition to the various components of its in-store educational efforts, Ukrop's also took to the airwaves to reinforce its safe-meat message during its previously booked radio spots, says Warren, who was also the featured guest during an hour-long local talk-radio segment devoted entirely to BSE. The program, which aired at midday, "was both informative and valuable for the audience, and we were told by the station that the points we covered came across very well in helping to clear up confusion and keep things in perspective."

Among the highlights of what the chain re-emphasized about its beef program, according to Warren, were how all cattle have been monitored for quality virtually from birth under the industry's only process verification system; the stringent standards its producers and processors adhere to for feeding, ancestry, health, record-keeping, and processing to become UOB; and the tender, great-tasting attributes of the cornfed beef that's raised and processed under the best conditions.

The family-held chain also has a companion line of process-verified Ukrop's Own Pork, produced and processed by Premium Standard Farms under the same strict guidelines as UOB. Further, the retailer has also offered a top-quality, chemical-free signature shrimp program since 1991.

Richmond's leading grocer also launched a "Better Beef, Better Choices" campaign created to highlight its newly added Certified Angus Beef, Coleman All Natural Beef and Pork, Amish Select All Natural Chicken, and Hans Sausage lines, Warren says.

The company's outstanding fresh meat program also plays a leading role in its in-store cafe operations, which feature a broad menu of items made from the same products it sells in its stores. "Our meat departments face strong -- but very friendly -- competition with the foodservice end of our business at store level. But our fresh meat and seafood offerings still command a very respectable percent of the business overall," says Warren, noting that the fresh meat department netted a full 1 percent sales gain over the past year.
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