Promotional Drop: Meat Trends Today

Last year posed a lot of challenges for supermarket meat departments. In 2011, drought, rising feed costs and strong export demand crimped domestic supplies of beef, pork and poultry, pushing prices up across the board. Pork and beef were hit particularly hard, with fresh pork prices up 10.6% and fresh beef up 11.5% compared with 2010, according to FreshLook Marketing/VM Meat Solutions.

According to recent forecasts from the U.S. Department of Agriculture, red meat and poultry production is expected to continue falling in 2012 and 2013 before flocks and herds are rebuilt. The agency doesn’t expect price inflation to be as steep this year, but prices certainly aren’t expected to ease, either. Currently, USDA is expecting meat and poultry price increases in the 4% range for 2012.

With consumers still struggling through a sluggish economic recovery, supermarkets are finding themselves between a rock and a hard place. Margins are getting squeezed and promotions are losing their power. However, industry analysts are pointing to several new trends and ideas that could help retailers weather this difficult climate.

“The overall impact of promotions has weakened because of the increase in prices,” noted Sherry Frey, vice president of account services for the Perishables Group, a division of Nielsen. “One of the biggest things that we’re seeing in terms of consumers is overall, they’re purchasing less volume per trip. And, overall for fresh meat we’ve seen the trips down, so there’s less trips to the meat case. In general, the meat case is being affected by consumers buying less, less often.”

In fact, the percent of fresh meat and poultry products sold on promotion during 2011 decreased across the board. According to Perishables Group FreshFacts data, turkey sold on promotion was down 8.6%, beef was down 4.6%, pork was down 3.1% and chicken was down less than 1%.

Frey added that some retailers seem to be having success promoting across proteins. If customers are making fewer trips to the meat case, then the most successful meat departments are going to find ways to encourage those shoppers to walk away with more items after each trip.

“One of the areas of opportunity that we think retailers have is utilizing cuts on sale to get additional products and proteins in the basket,” she said. “Buy a pound of chicken breasts — an item that has high household penetration — and get a dollar off of a pork rib. Use products to get additional products into the basket. Rather than that consumer coming in for that one hot deal on one product and only purchasing that, encourage the purchase of two products for two different uses in that same shopping trip.”

Shoppers also continue to express interest in meal ideas and serving suggestions, Frey said. Advertisements and promotions that feature recipes and recommendations for the consumer “always do better than just images of raw meat.”