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Tyson Deli: 2013 Supplier Leadership Award Winner for Category Management
Tyson Deli has started integrating category management techniques into its marketing business review.
Jenna Telesca
October 14, 2013
5 Min Read
• Tyson Deli has started integrating category management techniques into its marketing business review.
• The supplier helped retailers work around squeezed margins for rotisserie chicken by introducing a new product and marketing campaign in the deli.
• Several Tyson Deli marketing members took coursework to become certified by the Category Management Association.
Tyson Deli has changed the way it does business. The marketing and category management departments have been taking a more integrated approach to working with retailers in the deli.
“Historically we acted more like a traditional marketing department, meaning our role was to take in all of the primary and secondary research that we gathered — whether that be promotional analysis or consumer analysis or various market analysis — and use that information to lead to our recommendations,” said Scott Moses, senior brand manager at Tyson Foods, of which Tyson Deli is a division.
“What we discovered was we were really missing a vital insight piece and that was what the category management discipline brings to the table.”
Tyson Deli now uses a five-step business review process that incorporates core category management principles.
First, Tyson identifies sales performance trends with tools like the Nielsen Perishables Group database, and then compares the retailer’s performance to the rest of the industry. From there, Tyson investigates why the retailer performance may differ from others; finds opportunities for growth; and then comes up with a strategic plan. For instance, Tyson Deli was recently confronted with the problem that the higher cost of rotisserie chicken production squeezed retailer margins. Moses said this left retailers with two options: Either sell a lot more rotisserie chicken to make up the smaller margins or introduce something new to make up the margins.
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Tyson’s solution? Add store-made tortilla chips to the deli.
“When people think of Tyson Foods they mainly think of chicken. They may think of beef and pork and other proteins that we sell, but we’re also a large prepared foods producer of everything from soups, sauces and side dishes, and in this case, tortillas and tortilla chips,” said Moses.
Turns out that fresh tortilla chips aren’t common in supermarket delis, but are popular with shoppers. Tyson helped retailers like Hy-Vee and Safeway create marketing campaigns and promote those high-margin chips around the store to drive traffic to deli.
“You get people into the deli, and they’re more apt to fill their basket with other things because all of a sudden they are seeing things they wouldn’t have seen if they hadn’t been drawn in, which in this case was with the chips.”
Tyson Deli’s approach melds facets of category management and traditional marketing.
“So it’s using traditional marketing information, using category management information through the analysis of that opportunity, and that leads to the recommendation of adding chips to increase your margins and then all of the tactics around that to grow their business,” said Moses.
All people holding customer-facing positions in the marketing group have taken classes through the Category Management Association to the Certified Professional Strategic Advisor level.
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In fact, at the Category Management Association’s conference, Moses gave a presentation with a colleague in the Tyson category management department about how the two groups work together.
While category managers have to remain neutral with customers, Moses said there are several ways the departments can cooperate.
“But I work with him [a colleague in the category management department] to provide him with the market conditions, the shopper information, the kind of things a category management doesn’t have, and he can share with me a deeper understanding analytically of what’s happening with that retailer, and together we have a deeper picture of that customer and what’s happening.”
This cooperation leads to a consistent message coming from Tyson, said Moses.
The Tyson Deli team has also found ways to help retailers reach customers who use aid from the Supplemental Nutritional Assistance Program (SNAP) to purchase groceries.
“As we saw the number of people participating in that grow to 45 million, we realized we were missing an opportunity in really targeting that group,” said Moses.
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But, Tyson Deli explained to retailers that small changes to prepared food offerings can better include these shoppers.
“The way it works in a grocery store is you can use SNAP money that you get from the government to purchase cold product; you can’t purchase hot product,” Moses said
He gave the example that shoppers using SNAP cannot purchase a hot rotisserie chicken, but are allowed to buy a chilled rotisserie chicken.
Tyson Deli prepared a brochure to educate retailers about the benefit of offering more chilled prepared food products and also educated consumers that these items are SNAP eligible.
As a result, Tyson Deli saw a lot of demand for cold product, Moses said, adding that expanding cold grab-and-go items allows retailers to both offer a prepared food product in a new place and target a different eating occasion.
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