Pre-seasoned, pre-marinated and other value-added fresh meats are still showing plenty of potential, despite minor setbacks during the recession
During the past two years, many retailers, analysts and reporters have taken for granted that consumers are weathering the recession partly by dining out less and eating at home more often. And, it's been accepted wisdom that shoppers need help cooking, and they're always looking for new ideas to keep dinner at home fresh and exciting. These trends are often credited for the growth of prepared-food departments during the economic downturn, and the popularity of programs like bundled meal deals.
But, surprisingly, one category where these trends do not appear to have taken hold is value-added meats. According to data from the Perishables Group, West Dundee, Ill, during the 52 weeks ending April 24, 2010, total average per-store dollar sales of value-added meats were down 3.5%, and volume was down 2.2% compared to the same period a year earlier. They may need help in the kitchen, but are shoppers less willing to pay a little extra for pre-seasoned, pre-marinated or other value-added products when they're closely watching their budgets?
According to Sherry Frey, the Perishable Group's vice president of account services, this may not be the case. Despite the slump in total category sales, there were still several bright spots that indicate that value-added meats remain popular for many shoppers seeking something new for their home kitchen.
“It's not the greatest story with value-added fresh meats, but there were some interesting areas where there was growth,” she said. “We saw growth in value-added chicken wings and value-added whole chickens — things like stuffed, seasoned and barbecued chicken. … The biggest declines were in value-added steaks. But, we did see some interesting growth in value-added ground beef products like burger patties. Some of the top-growing items were things like bacon burgers, jalapeno cheddar burgers, blue cheese burgers. There was a 4.9% growth in dollar sales and an 8.4% growth in volume for value-added ground beef.”
Data from Hoffman Estates, Ill.-based Fresh Look Marketing Group corroborated these findings, according to Shelley Bradway, marketing manager for the National Cattlemen's Beef Association. Volume sales of pre-formed burger patties was on the rise last year, and other inexpensive items, such as kebabs, demonstrated a 4.6% increase as well, she said.
“Especially during the summer months, people are busy or on vacation, and they're looking for quick meal solutions, and these types of products offer those types of solutions,” Bradway said. “They're affordable and appealing [to customers] and offer a variety of choices.”
So, during the worst part of the recession, sales of value-added fresh meats were down only slightly. Premium products such as marinated and seasoned steaks faced the steepest decline, with a 16% drop in sales, but less expensive products, such as chicken wings and pre-made gourmet burger patties, continued to enjoy noticeable growth.
“Overall, value added isn't down that much,” Frey said. “The one area where consumers were probably saying they didn't have as much money to spend was in the steaks. It's a higher price-point. The consumer may have opted out.”
And, the category continues to reward departments that make it a priority, noted Tony Torres, market supervisor for Lubbock, Texas-based United Supermarkets.
“The category seems to be doing really well for us, and Scott Nettles, our meat director, has really challenged us as field support and supervisors to think outside the box and create some items that make it easy for our guests to cook at home,” Torres said.
During the past year, United's stores have shown growth in sales of both total fresh meat and value-added products including hot wings, seasoned burger patties, seasoned chicken, seasoned steaks and items like seasoned beef, pork and chicken fajitas with vegetables.
“They've been really successful,” Torres said. “It's something our customers can just throw in a pan or on the grill, and it's ready in minutes.”
All of United's stores have a section of the meat case set aside for value-added products, so shoppers can find these specialties every day. But, Torres said that associates really work to move these items through suggestive selling on weekends. The value-added meats help differentiate the stores' offering from competitors such as Wal-Mart, and suggestive selling gives associates an opportunity to interact with customers.
“Everybody is looking for meal ideas,” Torres said. “They come into the store, they're hungry but they don't know what they want, and this is something that gives us an opportunity to visit with our guests.”
Summer grilling season has always given a boost to the category's performance, but Torres said that at United, value-added products have lately enjoyed year-round popularity, especially since the company designed a few products for football season, such as tailgate packs and combo packs of pre-seasoned pork chops, pre-seasoned ribs and pre-seasoned chicken.
“Folks can pick these up for $10 and take them to a cookout or a tailgate party or just take home,” Torres said. Cross-merchandising the department with charcoal, specialty seasonings and marinades, or even sides such as seafood items or jalapeno poppers can help shoppers with ideas as well.
“In the past year, we're showing increases in [value added meats],” he said. “We're trying to come up with items that offer easier, quicker ways for busy families to cook their meals. It seems to be working.”
Frey agreed that the category still has plenty of promise, despite its recent, uneven performance at many supermarkets. According to Perishables Group data, fully cooked items in the meat department grew last year — 7.5% in volume and 4.2% in dollar sales.
Deli-prepared foods were up 3.1% in dollar sales and 4% in volume. In produce departments, fresh cut fruits and vegetables grew 1.2% in dollar sales and 2.3% in volume. And sales of items such as dips, spreads, chicken wings, sliders and other bite-sized items have continued to grow. So, clearly shoppers are still looking for new ideas and new ways to conveniently prepare meals and entertain at home.
“I think consumers were changing up what they were purchasing, and with some of the [value-added fresh meat] items that showed growth, like the bacon cheddar burgers and blue cheese burgers, shoppers may have been looking for something interesting and new,” Frey said.
“That presents an opportunity for retailers and manufacturers to continue to innovate and push the envelope. It's not that expensive, so there isn't a high cost of entry for the customer, and also there's a convenience factor.”