Beyond benchmarks

by Joel Crews
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Three years removed from the previous survey designed to provide a snapshot of the typical retail meat case, results of the fourth study of its kind were recently released. The findings of the 2010 National Meat Case Study reflected, among other trends, the impact of the recession on consumer purchasing and merchandising trends in supermarket and club store meat departments. Increased usage of nutritional labeling continued while new information tracking, including
Country-of-Origin-Labeling data, was collected for the first time.

Jerry Kelly, National Retail Account Manager for Sealed Air’s Cryovac brand, led the recent discussion, beginning with some information about the data collection and the methodology. In this and previous studies, auditors conducted their research during the first quarter of the year, to avoid any skewed results related to holiday sales. The team audited the major supermarket chains representing 51 markets throughout 31 states. A total of 133 stores were audited, including nine club stores. The goal of this study and the previous ones (conducted in 2002, 2004 and 2007), is to provide a comprehensive look at the fresh-meat case and other products sharing the meat case used to cross-sell meat and poultry in both self-serve and full-service meat departments. Being the fourth installment of the study, researchers have now established trending information over an eight-year time period and during a wide range of economic conditions. As in years past, the audit team was comprised of graduate students from Texas Tech Univ.’s meat science and animal-science programs who collected the data, which was analyzed by First Stage Marketing. Partners on the project also included Sealed Air’s Cryovac Food Packaging, the Beef Checkoff Program and the National Pork Board.

While arguments can be made as to whether the US economy is in the midst of a recession or on its way out of one, Kelly says with certainty that when it comes to the meat case, “Things have changed” since the 2007 survey. A drastic shift away from national brands in the meat case was one telling indicator of the sputtering economy in the 2010 NMCS. Storebrand growth spiked since the 2004 study across all species. The percentage of packages in supermarkets that were store brands tripled from 12 percent in 2004 to 36 percent in 2010. The increase came at the expense of supplier brands, which shrunk from 50 percent to 37 percent during the same period. “Suppliers are producing a lot more store-level product for retailers and retailers are really investing in their own brands,” he says.

Club store watch
While the sample size of club stores (a total of nine) was much smaller than the supermarkets, Kelly points out the percentage of chicken packages showed the biggest increase (10 percent) in the meat cases of the warehouse-type stores, at 28 percent compared to 2007. Notably, the percentage of pork packages substantially dropped among the club stores, from 46 percent in 2007 to 23 percent in 2010. Part of the explanation for the marked decrease has been attributed to the lower pork production numbers and slightly higher prices during the quarter the survey was conducted.

However, John Green, the National Pork Board’s strategic marketing director, says sales reports among club store customers during the time when the survey was conducted were strong. “Our contacts at the club stores are very pleased with their pork sales so we aren’t yet concerned by this,” he says. It does indicate a possible opportunity for adding more varieties of cuts of pork, Green says.

Pound for pound
When it comes to percentage of pounds on display in the freshmeat case, beef, turkey, lamb and veal all remained relatively flat at both supermarkets and club stores. Likewise, at 36 percent of pounds, chicken at supermarkets remained unchanged in 2007 and 2010, but increased from 25 percent to 34 percent at club stores. Conversely, pork was relatively flat (21 percent) at supermarkets, but dropped from 37 percent in 2007 to 26 percent at the club stores surveyed in 2010. Green points out that the data substantiates a trend that sees more pork buyers purchasing larger packages of products. These are predominantly the consumers who “always serve meat and always want to have it on hand,” he says.

Measuring up
In terms of linear feet dedicated to fresh meat (including beef, pork, lamb, veal chicken, turkey and other), the amount of space declined from 66 percent in 2007 to 63 percent in 2010. This resulted in the linear feet of non-fresh meat (processed, sausage, ham, seafood, value-added and heat-and-serve) increasing from 34 percent to 37 percent in 2010.

Similar to 2007, the linear feet dedicated to the heat-and-serve category (excluding sausage) continues to be led by chicken (39 percent of packages), but pork gained ground from 19 percent in 2001 to 23 percent in 2010 as did beef (from 26 percent to 29 percent). These gains came at the expense of chicken, perhaps because of some SKU rationalization going on within chicken offerings or some fatigue in some of the chicken items available, according to the research leaders.

“We are seeing more new beef items offered in this category (heat-andserve) than we have in the past,” says Jim Henger, the executive director of retail marketing with the NCBA. “It may be that [retailers] have exhausted a lot of the chicken offerings and are now looking to other proteins to keep that category vibrant.”

Part of the explanation for the fluctuations in the amount of space specific to the heat-and-serve category has more to do with merchandising and SKU rationalization than it does with demand. Kelly says it isn’t uncommon to see these products shifted around to various parts of the store, which tends to skew the results somewhat.

Full-service meat cases seem to be making a subtle comeback, based on the results of the 2010 survey and previous year’s data. Among the 124 supermarkets surveyed this year, 77 percent offered either a full-service meat case, seafood case or both. Significant changes in the full-service case include a continued decline in the amount of seafood offered at the full-service case. Meanwhile, ground beef, pork and chicken all increased in this category, at the expense of seafood.

Packages and pounds
Among supermarkets’ self-service meat cases, beef (ground and whole muscle combined) has the lion’s share of total packages, at 40 percent, which has been consistent through the years. Chicken ticked up 1 percent to 29 percent and represents the second-highest category of packages, while pork declined to 20 percent, which was a 2 percent decline since the 2007 study.

In terms of percent of total pounds represented in the self-service fresh meat case at supermarkets over the life of the survey, the divisions have remained fairly consistent since 2002 with the exception of the decline in pounds of beef in the 2004 survey compared to 2002. Kelly points out that it was in December, 2003 when BSE was discovered in the US and attributes that event to the decrease from 24 percent in 2002 to 21 percent in 2004.

The number of packages per foot since the 2002 survey has shown a significant drop from 6.6 feet to 5.8 feet in 2010. Kelly points out this is an average of about one less package per foot of display space, which might seem insignificant, “but when you start multiplying that times linear feet per store times the number of stores,” Kelly says, “that gets to be a pretty big number.”

Another notable trend is the incremental increase in the overall number of boneless packages seen in the meat case (57 percent in 2004; 59 percent in 2007; and 63 percent in 2010), led by chicken.

The percentage of enhanced products (either with moisture only added or with an added flavor) since the 2004 survey has remained around the 20 percent mark (see chart on Page 46). “Pork and chicken are the drivers in this category,” Kelly says. At 44 percent of pork packages, the leading species in this category is pork, with 26 percent of pork packages being “enhanced only.” Pork lends itself to popular flavors such as teriyaki, barbecue or mesquite, Kelly says.

Labeling matters
New to this year’s survey is the tracking of on-package information that addresses country of origin. Somewhat surprising to the research team was the number of supermarkets surveyed that had no origin information at all on the products, either on the package or on signage where the products were displayed. “So they are basically out of compliance,” with COOL regulations, Kelly says.

Other on-pack findings that are new to the 2010 survey track bilingual information. Ground beef (17 percent) and whole muscle beef packages (11 percent) were found to have bilingual information most often.

Another new category of data collection included production claims on packages of fresh meat. “Minimally Processed” and Hormone Free” were the two most common claims made across all species. Poultry products are the products that most often include claims of “Minimally Processed,” including 57 percent of poultry packages and 45 percent of turkey packages. “Hormone Free” was the next mostcommon claim, including about 43 percent of chicken packages.

Nutritional labeling
One of the more prominent trends is nutrition labeling information on packages. This category has grown every year, from 34 percent in 2002 to 61 percent in 2010. While pork remained flat at 53 percent of packages, every other category increased. Meanwhile, on-package cooking information, at 39 percent of packages, spiked to the highest rate since the 2002 survey.

Case-ready rolls on
The growth in case-ready products continued to march on. With the exception of chicken and turkey, which have likely already maxed out, every species showed growth in the percentage of case-ready packages (66 percent) represented in the fresh-meat case. Case-ready beef packages were at 31 percent; ground beef at 71 percent; and pork grew to 58 percent.

Kelly points out that the spread between the availability of caseready vs. store-wrapped products is growing and trending in favor of the former. “Case-ready products are more often in stock at five or more packages per SKU than storewrapped product. So you have a fuller case, more offerings for the customer and it provides a better presentation in the meat case.” Kelly says.

For more information on the 2010 National Meat Case Study, including more in-depth data about specific species, please send an e-mail to meatpoultry@sosland.com.
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