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PAMELA BLAMEY

Speakers at meat industry conferences keep saying that the time is nigh for branding to transform the fresh meat case.

Maybe so, but to a lot of retailers it seems that a brand is a brand is a brand -- and by any name, the branding concept still means a lot of different things to different people.

Meat merchandisers across the country said that beyond the clear success of branding in poultry, the current status of brands is still a subjective matter -- and for now, at least -- tied to specific consumer preferences and retailers' own circumstances.

Indeed, the idea of what's in a brand is still amorphous enough at the retail level to encompass store branding, local or regional packers' labels and suppliers' name brands with a more national scope.

SN found retailers in all stages of development in branded programs, from those mating sophisticated category management principles with case-ready products to those who are just beginning to pursue the goal of carrying a meat line with their own store brand.

Many branded programs are still being hampered by skepticism at retail about moving the cutting or packaging operations outside, said merchandisers; or by a lack of marketing data required to set in motion some of the more innovative programs.

There are some standout efforts where branders have carved themselves a lucrative niche, particularly when the brand symbolizes a point of difference such as all natural or premium quality. But in large part, it's still a commodity game in the case, industry sources said.

"The majority of fresh meat is still sold as a supermarket brand," said Patricia Pines, a spokeswoman for the American Meat Institute, Arlington, Va. "Obviously, there are some very interesting projects going on, with certain retailers having packers produce case-ready or consumer-ready products; and a few fresh beef items such as Coleman's Natural and Certified Angus. And there are a couple of branded pork items that are being sold now -- so it's increasing. But it's still up for grabs whether store or brand labels will dominate."

Seaway Food Town, Maumee, Ohio, is one retail operator that is apparently betting on some form of exclusive, store-related brand as a shoo-in down the road.

"I think it's a sure thing for the future, because it seems to mean more to the consumer," said Wally Bilius, director of meat operations. Bilius said selling meat with some form of brand equity attached is a likely extension of branding's emergence in other parts of the store, including supermarket prepared foods.

"Though we haven't had that experience from the meat end of it, there are other indications, like a Chinese restaurant we put in the store, called China Express, which is an overwhelming success," Bilius said. "And there's a pharmacy we call the Farm Pharmacy in 23 deep-discount store formats that we call the Farm. So those are kind of like branded departments, and they've done well.

"For that reason we're looking for a brand for beef and pork. We are looking at having somebody do it and put our name on it, but we would probably still be cutting it at store level."

Naming the product is more important than it might immediately seem, according to Bilius. "We could call it Food Town's USDA Choice beef, but it might sound better as something like Blue Ribbon Choice."

Poultry is the one area of the meat department at Seaway Food Town, as indeed at most retailers, where name branding is ubiquitous, especially due to the growth of nationally known brands. Still, Seaway is finding a niche beyond the big names.

"We were a Tyson supermarket chain for a long time. And then we took on a branded item called Case Farms, an Amish-grown chicken; and we are seeing that what is on the label means a lot to people around here, who perceive an Amish product as being clean and wholesome.

"So now we carry both Tyson and Amish-grown chicken, and I guess that's the extent of the branding. There is nothing else branded in that meat case, and I'm working on that because we have seen success [with branding] in other areas."

Part of the problem, Bilius said, is the lack of notable branded products offered by the beef industry.

"IBP is the largest of beef suppliers, and it's kind of a shame they never marketed their name throughout the years, because case-ready products are coming, there's no question, and the Monforts of the country know that and have responded. But outside the industry, consumers don't know what IBP is."

One meat executive at a 250-store chain in the Midwest says there is little more to branding than meets the eye.

"It's like designer jeans: they have created a reason for you to believe that when you walk into a store and see a hundred manufacturers of jeans, that one is for you."

Such an emphasis, even in its current embryonic stage, is a marked shift for the meat case, the retailer said. "Because nobody would ever package [nonpoultry meats] that way in the past. But once we've gotten to this level in 1996, some of the customers are now saying that, 'I would buy the Wilson pork chops because they might be better.' "

Now, he said, supermarket operators are asking themselves, "Can we sell a pork chop with a packing house label on it and get more for it? It's just marketing. And then, from my point of view, the question is, can [packers] sell it to me cheaper than I could do it in-house? Can a packer do this better than I can do it, and create a reason for the customer to buy a packer-packaged product rather than a store-packaged product?"

The Midwest meat merchandiser acknowledged that labeling is indeed an essential part of poultry sales. "Now it is widely recognized that chicken sells better with a Tyson label, rather than a store label on it, and the same is beginning to be true for other meats. Now we think, 'if I'm buying pork loin, will it sell better with a Wilson label on it?' "

But, like Bilius, this retailer said he sees a lack of major progress in branding outside the poultry category.

"There's nothing happening [in nonpoultry segments] because nobody's doing it. We don't have any good fresh meat suppliers packaging beef or pork. We have a few who've tried to package lamb, and one who's trying it with veal," he said.

"Everybody packages poultry, and I choose two or three different brands, I'll have Perdue, Tyson and a local brand; there are 200 other beautiful labels out there.

"But I don't have those same choices in pork. I have some people who will sell it to me, but they have more [production] problems than I do and I'm not going to sell my customers product that costs more and isn't as good as what I do here. And the customer prefers to buy my pork over the brand names."

He added that what he sees as a dearth of viable fresh beef or pork branding is in sharp contrast with processed meat categories.

"I've got probably 80 different packages of wieners and bologna," he explained. No product is significantly better than the others in his eyes, but often consumer demand just comes down to successful marketing programs. And whatever consumers want, they get.

"Branding is about identifying what the customer prefers. The customer creates the definition for what the merchandiser buys. They walk into the meat department and there's this cute kid from the hot dog commercials, so they buy Oscar Mayer wieners. But is it better than the competitor's? No, Oscar Mayer just does a better job of promoting."

Branding is a hit also with smoked hams, he added. "I've got 50 smoked hams, they're labels consumers have confidence in. I mean, they stand in line at the HoneyBaked Ham store, because they believe it's worth $5 a pound as opposed to my ham at 99 cents a pound," the retailer said, referring to a branded premium ham marketed by a supplier with its own stores, as well as a few branded outlets within supermarkets.

"In pork, that's not happened. I do not have a retail-ready product in pork, and I don't have a retail-ready packaged beef program. I keep putting them in, but customers don't buy it. There are no programs for those meats that reach that kind of customer satisfaction."

Some retailers simply are not structured, or inclined, to accommodate branding programs yet.

"We've never considered it or looked at any of it and we probably don't plan to," said one meat department executive at Stater Bros. Markets, a 109-store chain based in Colton, Calif.

"We have a service meat case that's not set up for that; and we don't have much self-service space, so we're quite a way from considering anything like that."

On the other hand, some chains are beginning to take a serious look at branding, in anticipation that the movement to brand fresh meat will become dominant in the future.

"[A branded program] has been presented to us, and we're going to maybe do some test markets on our own," said Mirl Hull, director of meat operations at Harp's Food Stores, Springdale, Ark.

"We have experimented on some branded pork; at the time, it didn't work too well for us, because there were problems with the way it was cut and packaged," Hull said. "But I think [branding] is probably something we're going to phase in in the next three to five years. You're probably going to see nothing but that in the industry.

"We're not into any labeling on fresh meats at the moment, except with chickens; and any further branding we do will be similar to the fresh chicken programs," he noted.

However, Hull told SN, he is convinced the beef industry will be catching up to poultry on branding in the near future, and that the end-user will provide the impetus. "I think you're probably going to see labels from packers, like the Sterling Silver program from Monfort, and the Certified Black Angus. I really think the customer perceives it as better."

And other protein sources besides beef will not be far behind. "Right now, our operations are in-house; but we do have prepacked chicken, and we're looking very seriously into veal and lamb. Those have to be handled very closely and this is a good way to do that.

"We're not currently doing anything right now with pork or beef, but pork is right around the corner; we're looking at a program right now.

"I was presented a lamb program last week, so I think you're going to see that coming up as well. Basically, I think you're going to see that the whole fresh meat industry is going to be looking at that."

Case-ready programs and other options for externally cut and packaged products can make branding more attractive, he said. The key to what will change the way retailers look at branding is controlling in-store labor, Hull said.

"I think everybody in the industry is looking at labor as one major item, and if they're not already, they're going to be faced with it. I'm not seeing that many trained meatcutters out there, so this is going to be a big decision for everybody -- to make the switch from in-house operations.

"Modified atmosphere packaging is going to come into play; they're going to try to get the products to look close to what the meatcutter has done traditionally."

At Clemens Markets in Kulpsville, Pa., branding, and the attendant concept of category management in the meat case, is fairly well along in some segments, according to Al Kober, meat merchandiser.

"We just partnered with Kraft for bacon, lunch meats and Lunchables," Kober said.

"We give them all the details of what we sold over the last year, for each individual stockkeeping unit; then they decipher it and get back to us and tell us what it all means."

Kober said he thinks category management will change the way branding works throughout the meat case -- that it will help retailers sift through a deluge of brands that may not be immediately distinguishable from each other.

"Branding is going to be more important, but the brand has to stand for something. When the customer sees that name, they're going to need to know everything with that brand on it is going to meet the same criteria of quality and taste."

One problem with branding is that often, manufacturers do not adequately use it as a tool to differentiate between different quality levels of products, Kober told SN.

"Too many times I think manufacturers try to find the middle of the road, so they can appeal to a higher income grouping without excluding the low end. I think category management is going to help us not try to be all things to all people," he said.

It is better for the consumer to have two distinct products to choose from, which satisfy requirements that are really irreconcilable. "If [suppliers] are going to be in the arena of competing for price, then maybe they need a brand name that will identify the higher-standard products.

"I think they have to identify them as being made by the same company, but I think they have to show the difference," Kober said. "Manufacturers have to be careful that they don't put their brand on too big a spectrum of products."

He used poultry as an example. "When Perdue first came out with turkey breast, they had one-, two-, three- and four-star grades, each a different quality but with the brand name on all of them; and I said that's not going to work, because the customer isn't seeing the stars, they're looking at the Perdue name."

Perdue has since put its brand name only on the three-star product, he added.

"Ford makes the Escort and also the Continental, but they've established the difference by the name -- with a Lincoln Town Car, you know what you're getting, and the same with an Escort. But they're all Fords."

Kober said he is apprehensive about the idea of branding taking the meat case by storm, mostly because of the threat it poses to a retailer's ability to compete and stand out.

"I'm not too enthusiastic for it to take over the whole meat case. I'd rather keep some identity for our own cut and packaged products, separate from other items in area. When you get into fresh meat with the trim, it sets you apart from your competition; you can do something to it that identifies it as your product. But once it comes in case-ready, it's all the same."

Another obstacle to branding is that a name with excellent recognition in some areas may not work elsewhere.

"Just because it's the best selling item in Philly, does not mean it's going to meet the needs of our customers," said Kober, whose stores are mainly situated in the suburban and rural areas around Philadelphia. "The beginning and ending must be with the customer, not what's best for Clemens or the warehouse, and not what somebody tells you is the greatest thing since sliced bread."

Clemens is a bit further ahead than some retailers in information gathering, Kober said, so he has been able to build up a fairly accurate profile of who the chain's primary customers are, what they want and how they shop. This helps him to weed out the name brands in meat that are not consistent performers.

"Category management helps us identify our best items, to decide, maybe we can eliminate half of our SKUs and not affect more than 5% of our customer base. It's going to make my buying job so easy.

This would mean that the mix of brands in the case will be more dependent on customer satisfaction, and less on the quality of the brand's marketing program.

"There are going to be some companies who are going to lose. We all have more products than we have shelf space for, so to reduce SKUs by 50% and not lose any of your sales or customers -- that's what we all want to do, we've just never had the means to do it before."

Another thing Kober sees happening is an increase in private-label or store-branding programs.

"That's still a viable way to go if you want to get into a case-ready program, and it's a way to eliminate the possibility of the competition down the street having the same item."

That's a strategy that Spartan Stores, Grand Rapids, Mich., apparently understands well. Through a partnership developed with Hoekstra Meats in Kalamazoo, Mich., the wholesaler is carefully developing a line of private-label, case-ready products called Farm to Table. (SN first reported on this project in the May 5, 1995 issue.)

According to Spartan's retail meat merchandising supervisor, Gary Sherman, a private-label approach is the best way for Spartan to satisfy its retail customers and their consumers. However, Sherman also had praise for some brands that are not tied only to one wholesaler or store group.

"We really see a bright future for branded beef," Sherman told SN. "Certified Angus has done a lot for the category, and we have one large group of stores on Sterling Silver that is doing very well.

"Our product is going to have the right kind of beef, what we call 'beef like it used to be.' There are these studies coming out that say consumers don't like the taste and texture of beef, so we're getting into our own program, where we can control the taste and quality."

The program debuted with ground meats, and now Spartan is adding other meat products. "Beef and pork have already moved into a few stores, then we're going to do veal and lamb down the line as well."