Retailers can create a real niche with all-natural and organic meats, but it takes plenty of associate and consumer education before the effort pays off, industry sources told SN.
A flurry of scary meat stories in the consumer press, touching on mad cow disease, E. coli outbreaks, inhumane treatment and overuse of antibiotics in food animals, has set the stage for opportunity in the meat departments. Promoters of natural and organic meats are waiting in the wings.
"You have to dedicate a marketing strategy to them," said Bill Pizzico, president, Prizm Group, Blue Bell, Pa., a consulting and marketing group that works with supermarkets. "You can't treat them like just another red meat you're adding to your case. We've seen a real upsurge in branding of natural and organic meat, so there's support available from suppliers. You have to let customers know it's a different product in whatever way you can."
Pizzico said some retailers feel strongly that natural and organic meats should be separated, maybe displayed in an endcap case. They use good signs, case dividers and handouts that tell customers what's special about the products. The efforts are working, he said.
With consumers increasingly concerned about their health and their children's health, making such products available could set the retailer apart in a positive way.
Even between brands, there are differences in taste, possibly because of the geography where the animals are raised, the kinds of grass the animals eat, or particular practices in the raising of them. So a particular brand could be the best differentiator.
Dorothy Lane Market stores, Dayton, Ohio, has nurtured natural, antibiotic-free, hormone-free meat to such an extent that the category is paying dividends. Success didn't happen overnight, however. This three-unit, upscale retailer forged a partnership with Coleman Natural Meats of Golden, Colo., nearly 14 years ago.
"We took their beef and lamb," said Jack Gridley, meat/seafood director, Dorothy Lane. "Now, 95% of my meat case is made up of natural, antibiotic-free, hormone-free meat and poultry that's vegetarian-fed. We felt it was the right thing to do. We wanted to give people a better-tasting, safer, more traceable product, and most of the companies we deal with could qualify for Certified Humane status, as well."
Even paying premium prices, Dorothy Lane's customers thank the company for carrying the products, Gridley said.
"When there was all the talk about E. coli, and mad cow, our customers felt safe buying their meat here. And I'm sure if you asked any of the big suppliers like Coleman and Maverick, they'd tell you there was a big spike in business."
From the beginning, Gridley has relied on education to build consumer demand for the meats.
"Step No. 1 is that your own people have to buy into it," Gridley said. "When we started with the Coleman beef years ago, we put together two trips. We took 24 of our people, our full-time meat associates and store directors and managers, and we flew them out to Colorado. We toured feedlots and fabrication plants, and we saw how all-natural beef is raised. Since then, we've had ranchers visit us at the stores, and we show videos. We don't have much turnover, and our associates have educated our customers all along."
Gridley also said branding was absolutely essential, especially in the beginning.
"We needed the POS [point-of-sale] materials, the case dividers. And just as important, we needed the figurehead of Mel Coleman Sr. He was a rancher, actually a pioneer in the industry. People listened to him."
Now, Dorothy Lane also partners with a branded, all-natural pork company and poultry company. In addition, it has its own DLM brand, free-range, air-dried chicken.
"What all this does for us is give us some differentiation, and it keeps us out of the price competition. They're growing categories," Gridley said.
Another upscale retailer, Pennington Quality Markets, Pennington, N.J., has gradually grown its antibiotic-free, hormone-free meat and organic meat categories over the last five years.
"We have everything from tenderloin to ground sirloin in all-natural," said Don Rellstab, manager of Pennington Market. "Between natural and organic, they're about 20% of our meat sales now. There are definitely more people switching to natural and organic, and the price differentials are getting to be less. We tried organic beef about nine years ago, but the price was just too high. It was nearly double the cost of the same cut of Choice. Now, it's better. We have B3R organic beef. The differential is about 20%, and in poultry there isn't such a big difference. It's a doable premium."
Rellstab, like Gridley at Dorothy Lane, emphasized the necessity of educating associates and consumers.
"We do a lot of demos and cook up meals of the day [with the organic and natural products], and everybody gets to taste them. We also display the products in a separate island case with signs.
"This part of our business will continue to grow," he continued. "More people are adopting the lifestyle. We've had 10%-15% increases in the last couple of years. It's amazing how the whole organic category is growing."
In fact, the Organic Trade Association projected a 30.7% increase in organic sales overall each year between now and 2008. Furthermore, the food-service industry's increasing use of organics will most likely propel their popularity further, an OTA spokeswoman said. While organic meat is a miniscule part of organic production, the category grew nearly 78% from 2002 to 2003.
It's not lack of demand, but limited supply that has kept the presence of organic meat on the periphery, industry sources told SN.
"There's just not enough organic grain available for feed at this time," a source said. "That limits the supply of organic meat and makes it costly."
Starting out slowly with a deliberate marketing plan is essential for a retailer that's getting into natural and organic products, said Scott Silverman, organic program manager, New Hope Natural Media, Boulder, Colo.
"Partnering with a supplier and starting out slowly are important. You could take your three most popular cuts of meat in the beginning, and bring them in in natural or organic and set them apart well in the case. The signage and even the price labels should be a different color," Silverman said.
What the National Cattlemen's Beef Association, Centennial, Colo., learned in a nutrition labeling study could be applied to a natural/organic meat program.
In its research carried out at two Harris Teeter stores and one Fry's, NCBA learned that consumers preferred finding information on the scale label on a package of beef and that having information there influenced their buying decision.
"Even the tray color is important in catching the consumer's attention. But it takes a whole point-of-sale program, with signs and case dividers," said Randy Irion, NCBA's director of retail marketing. He pointed out that multiple visuals are necessary to attract consumers.
In Cryovac's 2004 Meat Case Study, which was co-sponsored by NCBA and the National Pork Board, Des Moines, Iowa, researchers found that 22% of meat packages made a claim of natural, antibiotic-free, hormone-free.
"In general, more retailers are looking at carrying an all-natural product," said Karen Boillot, NPB's retail director. "That's from my observations in the field and what I see the supplier community doing or looking into. A lot of retailers are looking for a point of differentiation, and they'll reach out to the consumer looking for these products. Natural and organic awareness is being driven by other parts of the store."
Boillot, like others SN talked to, said good posters, signs and banners are key to the success of a natural/organic meat program.
"The retailer's paying more for the product," she said. " He shouldn't just let it sit in the case. Signs need to call out what it is."
Defining Moment
When applied to meat, the label "natural" means different things.
Any meat can be labeled "natural" if it contains no artificial ingredients, such as coloring or preservatives, and is "minimally processed after slaughter," according to the U.S. Department of Agriculture's guidelines. However, that doesn't mean the animal was not given supplemental hormones and/or sub-therapeutic antibiotics to promote growth or for preventative treatment.
With consumers showing greater concern about the use of hormones and overuse of antibiotics in the raising of food animals, those producers who do not use hormones or sub-therapeutic antibiotics make separate "no hormones, no antibiotics" claims on their labels to distinguish their products from those that are simply defined as "natural." Retailers carrying the products also pointed out the difference.
"Our branded, natural meat -- the beef, lamb, pork and poultry -- is antibiotic- and hormone-free, and has been fed vegetarian feed," said Jack Gridley, meat/seafood director at three-unit Dorothy Lane Markets, Dayton, Ohio. "Our customers know that, and they thank us for having it."
When it comes to organic, there's not so much confusion. Anything labeled Certified Organic is federally regulated in accordance with strict guidelines that took effect with the launch of the National Organic Program in October 2002. Certified organic food animals are raised on pesticide-free pastures and fed organic grain. No supplemental hormones or antibiotics may be administered to the animal in any form. The animals, too, must be kept segregated from non-organic animals.
