Value-added poultry continues to grow as a profitable part of today's meat departments, as consumers respond to the convenience that oven-ready and ready-to-eat products deliver to their often busy lifestyles.
SN spoke to a number of retailers about their value-added poultry programs, including their selections, their decisions to prepare their products at store-level or purchase them from outside suppliers, and their thoughts on pricing.
Here's what they had to say:
meat and seafood buyer
Black Mountain, N.C.
Ready-to-cook, value-added poultry is definitely a profitable and growing area throughout our stores. We devote about 8% to 10% of our fresh-poultry space to value-added items, and they generate about 20% to 28% of the category's sales.
We've seen such sales increase tremendously over the past three years. I think it's because a lot of consumers live fast-paced lives and they just don't have time to buy a whole chicken, which needs to be cut up and prepared for cooking.
Our ready-to-cook, value-added poultry includes boneless, skinless chicken breasts in four choices of marinade, chicken breast tenders, and three breaded items -- patties, nuggets and chicken tenders.
Our two most popular marinades for the boneless, skinless chicken breasts are a lemon pepper marinade and a lemon butter marinade. Our next most popular is an Italian marinade that features an oil and vinegar base with herbs and spices, and then a teriyaki marinade. The chicken tenders are sold without a marinade or seasoning.
In addition to these oven-ready products, which constitute the greatest sales growth, and generate the sales growth I mentioned earlier, we also carry a number of fully cooked poultry products -- a whole chicken, bone-in split breasts, boneless split breasts and drumsticks.
We decided to use outside sources to supply all of our value-added poultry items, although we did consider in-store preparation. Labor was probably the biggest factor in our decision, since creating value-added poultry is a very labor-intensive endeavor and labor can be hard to find. Food safety was another factor. There was just no need to put ourselves in a situation where a food-safety issue could arise.
I feel like we've chosen the best way to provide value-added poultry to our customers, but nothing is carved in stone. Things can always change in the future.
As for merchandising, we mix our value-added, fresh-poultry items throughout our fresh-poultry section, rather than creating a separate area for it, and we sell our fully cooked items in a separate section. We also advertise our value-added poultry at least once a month in our newspaper insert and occasionally feature it in our television advertisements.
meat product manager
Supervalu, Pittsburgh division
New Stanton, Pa.
The supermarket industry is definitely moving toward a more value-added future in the meat case. I think it's just a given that in today's fast-paced world that such products are becoming a necessity. I believe that our grandchildren will be buying value-added products in the same way that our grandparents bought chuck roast.
Most of the stores we service are carrying value-added poultry -- some are buying it from outside suppliers, while others are adding the value at store level.
Those who are adding the value at store level are using vacuum tumblers to marinate boneless, skinless chicken breasts, which they typically offer in a variety of marinades.
The stores that are using the tumbling system, and supporting it with product demonstrations and the like, are very happy with customer response. Although it can increase profit margins, that's only a small piece of the puzzle. It's more of an image builder. It allows a retailer to say that he has something that his competition doesn't. It helps create an upscale image.
There are two schools of thought on how to price poultry that's been vacuum tumbled, and the retailers we service seem to be adhering to one or the other. Some are pricing the vacuum-tumbled product 20 cents to 30 cents higher per pound, because of the added value, while others are keeping the retail constant, because the marinade adds about 10% to the product's weight.
In addition to the vacuum-tumbled items, retailers are offering stuffed breasts, whole friers and roasting chickens -- usually in a choice of traditional or corn-bread stuffing.
The stores that are sourcing their product from suppliers are carrying such items as marinated boneless, skinless chicken breasts, as well as a number of fully cooked products, like whole chickens and breasts.
Labor and food safety are certainly concerns when considering whether or not to add value at store level, but both are manageable.
Pay Less Supermarkets
Sales of value-added poultry have been growing steadily over the past few years, as more and more consumers realize that it's a nice way to cook without sacrificing too much time.
We offer a number of value-added poultry items in several of our eight stores, but it's the vacuum-tumbled boneless, skinless chicken breasts that account for about 50% to 60% of our total value-added sales.
We started offering the product in 1992 and have since expanded it to three of our newest stores. We chose those locations mainly because they have self-service, value-added sections for merchandising the category.
We carry the boneless, skinless chicken breast in a choice of about six varieties, which are packaged in black trays with overwrap. We retail it for about $4.49 per pound, which is about 20 cents to 30 cents higher than our non-vacuum-tumbled product.
In addition to the boneless, skinless chicken breasts, we also offer shish kabobs, a bone-in chicken breast in a lemon-herb marinade, and hot-and-spicy buffalo wings marinated in the vacuum tumbler.
Although we've been creating the value-added product at store level, we may be switching to a manufacturer-supplied program within the next few months.
Food safety is probably one of the biggest advantages to using an outside supplier. Although we have high standards in our current facility, a manufactured product adheres to an even more rigid criterion.
Additional advantages include product consistency, reduced labor needs and reduced shrink. Labor has definitely become an issue throughout the industry. Supermarkets are competing against restaurants for the more qualified people, and they're feeling the brunt of a tendency to discourage training at a time when prepackaged goods were expected to reduce labor needs.
Although there's a better profit margin when product is created at store level, we feel that the additional savings in such areas as shrink and labor really even things out.
We advertise our value-added products about once a month through our local newspapers.
meat and seafood merchandising manager
We carry a number of value-added poultry products, including cutlets, nuggets, a seasoned roasting chicken, and such marinated items as a whole chicken, chicken breasts and chicken thighs.
Value-added poultry comprises about 15% to 20% of our category space and generates about 10% of category sales.
Although we make some items at store level we're moving toward a complete case-ready program, due mostly to food-safety and labor concerns. Indeed, within the next three to five years, our goal is to offer only case-ready products throughout our entire meat and seafood departments.
In the meat department, chicken probably offers the biggest potential problem in the area of food safety, due to the possibility of salmonella poisoning. Until all chicken is irradiated, we feel that it's best to deal with case-ready products, which have been subjected to stringent Hazard Analysis Critical Control Point standards.
Labor is definitely another concern in this area. We recognize that there's a major mentality difference between a supermarket and food-service operator. We have full-time employees trained in food service who travel from store to store to help ensure that proper procedures are being followed, but it's still very difficult to take a person with a supermarket background and make them responsible for food service.
manager, meat and seafood
West Linn Thriftway
West Linn, Ore.
Sales of value-added poultry have definitely grown in the past four years. Consumers are looking for leaner, low-fat products, and that's what chicken provides. In addition, the value-added element makes such items more convenient for those short on time.
We carry a number of value-added poultry items, including such ready-to-cook items as marinated fajita strips; chicken kabobs, which come with tomatoes and mushrooms; marinated chicken sticks; chicken stir-fry; and four varieties of stuffed boneless chicken breast.
The stuffings available for the boneless chicken breast are a cottage-cheese, sour-cream and provolone combination; a cordon bleu; an old-fashioned bread-crumb stuffing; and a sun-dried tomatoes and cheese stuffing.
A lot of meat departments are offering value-added poultry, but they're concentrating on the number of items offered, rather than on the quality of what's being offered. We're trying to concentrate on the quality by making items from scratch and using only the best ingredients.
Value-added products do cost a little more, but I think consumers are willing to pay the price if they're getting a quality product.
I don't think there's that much difference in the profit margins attainable from buying value-added product from a supplier or making it at store level. The product I've seen from suppliers tended to carry high prices and offer slim margins. On the other hand, I try not to build too much margin into our value-added products made at store level. I prefer to keep the product moving.
West Point Market
There's certainly a future for value-added poultry. Poultry, in general, is becoming more of a mainstream item, as consumers move away from traditional red meats as their everyday dietary staples and look toward chicken for their dinner and lunch menus.
Indeed, in our entree case, which holds precooked items, about 65% to 70% of the offering is comprised of chicken dishes, and sales have increased about 10% to 15% during the past year and we expect a similar growth next year. Our precooked value-added chicken items include chicken stir fry; bone-in, baked chicken breasts; marinated grilled chicken breasts; chicken kabobs; Parmesan chicken; and chicken meat loaves.
Most of our value-added poultry items are precooked, since we service a professional clientele that's very busy and often lacks the time to cook.
We do, however, offer a ready-to-cook poultry item that's turned out to be very popular. It's called flat chicken, which we introduced earlier this summer in our deli cases. It's a whole chicken that's been completely deboned, flattened for grilling and marinated in a teriyaki, mustard or barbecue sauce.
It's a very unique item and has the type of name that customers really get a kick out of hearing. It's our own creation, so customers can't find it down the street at another store. It retails for about $8.99 per pound.
We've been promoting it with sampling, recipe cards and signage.
Suppliers are introducing a growing number of value-added products, but we prefer to make things at store level. We have eight highly trained chefs in our kitchen, several of whom are graduates of the Culinary Institute of America in Hyde Park, N.Y.