CATEGORY MANAGEMENT DRIVEN BY DATA CALLED ROAD FOR MEAT

STEPHEN DOWDELL

ATLANTA -- Mike Bettencourt of Stop & Shop Cos., Boston, has seen the promised land for meat departments. It's in the grocery aisle.

Bettencourt, director of meat and seafood for the 128-store chain, was preaching data-based category management to an audience that included a lot of old-school meat men at the industry's jointly sponsored Meat Marketing Conference here last month.

At some chains, of course, category management is working little miracles for dry grocery by turning the water of raw scanning data into the wine of shrewd merchandising strategies.

However, Bettencourt's testimonial before this audience was a little like citing the Koran to a roomful of Baptists: They were politely nodding and saying Amen, but it was not clear that they've yet seen the light.

Nonetheless, Bettencourt, a recent convert to fresh meat after many years in the dry grocery and nonfood hierarchy, urged the meat retailers, wholesalers and suppliers in attendance to get ready for the coming of category management.

"A lot of my time has been spent in grocery, and I have seen that promised land, and it is great," he said, speaking of his chain's progress in using accurate scanning data as a powerful management and merchandising tool.

Bettencourt admitted that, at Stop & Shop and elsewhere, the packaged goods side of the store has for years gotten the lion's share of sophisticated category management technology, while "perishables have suffered," left to continue operating in a manner based mostly on the hunches and gut feelings of its old-line buyers, who are more comfortable making buying decisions than they are creating sales strategies.

That situation is changing, Bettencourt said, and he is seeing it happen under his nose at Stop & Shop. The chain is a participant in an ongoing series of field tests for the Value-Based Meat Management System, a fledgling project to convince supermarket chains to indoctrinate their meat directors and buyers into modern category management, following their grocery counterparts.

The key is making use of the latest technology to capture accurate sales and promotion data and analyze it efficiently. Bettencourt has been intimately involved in the chain's own efforts to transfer high-technology category management to the meat case.

The fledgling VBMM system was developed by the National Livestock and Meat Board in conjunction with advisers from the retail, packer and management information systems communities. Stop & Shop is among those advising bodies.

The motivation is simple, according to Bettencourt. "At Stop & Shop, we are fighting for our share of stomach." The meat department's competitors these days are legion, and include not only rival meat shops in other supermarkets, but also food service components in supermarkets and elsewhere, he explained.

In focus groups, Stop & Shop has heard this again and again: about one-third of a customers' meals are being eaten away from home, at a growing choice of eatery alternatives. "Boston Chicken is one of our worst nightmares," he said.

"Food courts have been getting a lot of mixed reviews over the last few days," he continued, referring to the ribbing to which that segment of supermarket food service was being subjected during the conference. "They may not be hitting home runs, but of lot of their singles are driving us crazy."

Stop & Shop's Northeast marketing area is also offering the chain heavy competition for meat sales by way of warehouse clubs, he said. "Some of those departments are doing $100,000 a week and not really giving it a lot of effort."

All this convinced the chain it was time to get serious about defending its meat business with modern weapons. As far as category management is concerned, Bettencourt advised retailers to "keep it simple, and make it an open process" that perhaps will appear less intimidating and more attractive to the pool of existing meat people.

Still, the cultural changes are enormous in bringing meat operations around to category management, he said. "A lot of meat buyers spend 99% of their time on the buy side, not the sell side. If they are truly going to be category managers, you have to split up their time more evenly. Conceptually, it sounds great, but it takes a lot of time to do."

Bettencourt said the most important piece in the puzzle is technology -- and upper management's willingness to commit to outfitting its meat infrastructure with the tools.

He talked at length about the different components becoming available through the Meat Board's Value Based Meat Management program and how they fit in the category management puzzle.

URMIS, or Uniform Retail Meat Identity Standards, which Bettencourt simplified to "Capturing market data. Talk to a grocery buyer about how his product line is doing,

line is doing, and he can tell you how his product line is doing against the market average, by comparison with national, or by competitor A, B or C. How would you feel about having that information on meat sales, broken down by beef, pork, lamb?"

Scale management, which can offer retailers greater control over shelf life, plus add tools such as recipes or logos. "Capturing information by Uniform Product Code for random weight items is really the key," he said.

CARDS, which is the Meat Board's computer program to aid retailers in more accurately determining the true costs of their meat cuts and learn to set smarter retail prices, including working in everyday low pricing, said Bettencourt.