PHOENIX -- It is time for retail meat departments to abandon their outdated ways and make use of the tools available to them, according to Fleming Cos.' chairman and chief executive officer, Robert E. Stauth.
Adding his voice to the many advocates for change in this particular department, Stauth addressed his comments to attendees at the annual meat marketing conference here on April 14.
"At the risk of offending some in this audience, and that is clearly not my intention, I would challenge you to understand that the meat industry in general is running behind the change curve of the rest of the industry," he said. "I'm referring specifically to the mind-set of the retail operations aspect of our industry -- and our company is no exception. I believe we've done a less than adequate job training, developing and preparing our meat personnel for the massive changes ahead. In the future this is no longer going to be acceptable. Technology as well as creative adaptive thinking must take place in the modern world of the meat department in order to allow the supermarket industry to maintain its competitive advantage in feeding consumers."
One issue Stauth addressed is the changing role of meat executives, whom he said should seek additional culinary training.
"If I were a meat manager today, I would find a way to learn to become a chef as well," Stauth said. "That clearly is a trend of the future and a meat man without knowledge of food
preparation I believe will become obsolete. In fact, eventually that may be the single value-added component of his department's operation."
Meat departments should take their cue from the more innovative operators who have addressed a growing consumer need, he said. "The key challenge that each of our companies has is to stop thinking of ourselves as a supermarket, and begin thinking of ourselves as part of the meal solution with meat as the key ingredient. The meat man of the future will find that it is more critical to become a seller of finished goods as opposed to being the buyer of ingredients. "It's clearly time to get creative and change our mind-set, not only about what we do, but more importantly, about who we are and what our role is in the food chain.
"It is clearly time to move away from item, price and weekly ad specials as the thrust of the meat department."
He pointed to some successful strategies that are headed in the right direction. "Clearly some strides have been made -- oven ready meals, heat & serve, sandwich displays for customers on the run, and takeout centers."
But these are only baby steps, compared to the necessary task ahead of the industry. "If we don't find a way to protect our market share in the supermarket, this segment will simply disappear from our grasp."
Stauth then outlined what he sees as key factors that are driving the changes.
"[The information explosion] is here, it isn't going away, and it's time for everyone here to adapt not only to its use as a tool, but to see it as a key to managing your particular company or function well into the 21st century."
One reason it is so important for meat executives to play technological catch up is so that they can increase their use of the principles of Efficient Consumer Response (ECR), he said.
"We believe that ECR will become a differentiator among companies moving forward. One of the items I personally believe is one of the most important aspects of ECR applied to perishables, is the whole concept of performance management.
"Traditional functional measurements are especially inappropriate in areas of prepared foods where value is created by freshness and timeliness, rather than only by cost reduction."
Another vital issue is the rising awareness of health and safety issues, he continued.
"Consumer awareness of health issues has never been higher. Most of us today are realizing that what we eat and how we live will determine the quality of our lives," Stauth said.
"Everyone in this room has a tremendous responsibility, and we have seen through very adverse media coverage over the past several years exactly what happens when this trust that the consuming public has of our skills is broken. It seems that every other month there's a major negative article on the safety of the food supply, and those irresponsible people behind it -- that's us."
The industry needs an attitude adjustment in order for consumers to know that it is on their side, he said. "Whether you are for or against irradiation, it certainly is a subject worth further understanding. We simply cannot back off on our continued support of public education in the areas of food handling, both in supermarkets and in food-service establishments as well as in the home. Please take this responsibility as seriously as you possibly can, because the penalties going forward are going to be significant."
One major threat to meat department solvency is the food-service industry, and Stauth advised meat managers to take action in order to remain competitive. "1995 will go down in history as the year when the percentage of total food spending was greater through the food-service arena than through retail supermarketing.
"Food-service is the first threat to supermarkets that has not been driven by price. For the first time this means we are going to have to move from selling ingredients to selling meal solutions."
Quality and speed are the two guiding factors when it comes to food purchase decisions, he indicated, and retailers must turn those factors to their advantage. "The fastest growing meal category today is the category of meals that is prepared start to finish in less than five minutes. There is clearly no reason why this solution cannot be found in the modern supermarket."
Retailers must refocus their attention from the consumers who purchase a week's dinners in advance to the growing number who don't think that far ahead. "The newest term to describe the situation is 'the 4:30 dilemma', and it simply means, 'What's for dinner tonight?' This isn't a major thought for the person responsible for cooking that meal until 4:30 in the afternoon. But then in the next two-and-a-half to three hours, that meal is going to be consumed. The question is, who has the answer for that dilemma?"
Competition for the food dollar will only become more heated in the years ahead, Stauth warned.
"Although 70% of women today are working, the fact is that family income has declined in terms of disposable dollars over the last 20 years. And this has had a great deal to do with what has kept the competitive pressure on our industry, as more and more intelligent young people work diligently to save money on one of their highest monthly consumer expenditures -- and that is feeding themselves and/or their families."
Stauth added that an aging population, later marriages, a high divorce rate and "the complexity of our household makeup certainly has a dramatic impact on the way people will eat and live in the future.
"It's also important to understand that the growth in perishables and fresh prepared foods will require a significant increase in supermarket payrolls since these departments are labor intensive, unless retailer and manufacturing trademarkers can work together to create the systems necessary to handle very short shelf-life products."