MAKING CHICKEN FRY

KELLY GATES

The days of service counters filled with primal cuts of skin-on poultry are long gone. These days, retailers are focusing their attention on developing value-added chicken items that are both convenient and unique.

The demands of time-starved consumers are primarily driving this trend, but it also represents another way supermarkets are differentiating themselves from the competition, retail executives told SN. These creative, ready-to-cook chicken products are one of the best ways a meat department can cash in on the dynamics of the changing marketplace, using a category that's thriving and continues to grow steadily each year, they said.

While some supermarkets display marinated chicken breasts and pre-assembled chicken kabobs, others have found a way to upsell themselves over competitors by offering signature, center-of-the-plate items like stuffed chicken breasts and precooked rotisserie chicken.

According to the National Chicken Council, Washington, the category has enjoyed special growth in supermarkets. In a recent report comparing 1997 and 1999 data, the sell-through of chicken in supermarkets increased by 2.3 percentage points.

In 1997, the domestic-chicken industry produced 27.0 billion pounds of chicken for supermarkets, food service and exports. Of this, 42.3%, or 11.4 billion pounds, went to retailers.

In 1999, the amount of chicken produced in the United States jumped to 29.5 billion pounds, with 44.6% moving through supermarkets alone.

"Sales have been increasing for the past few years in the chicken category with consumers showing more of an interest in healthy eating, preparation convenience and low cost," said Thomas Moore, director of meat, poultry and seafood for Balls Food Stores, Kansas City, Kan. "Chicken sales are increasing because, while other meats like beef and pork have increased in cost, chicken has actually gone down, making it the prime choice for consumers wanting to save money."

But, in some cases, manufacturers have yet to take full advantage of the market to promote chicken products, especially newer items, and, as a result, the market still holds a significant amount of potential, he added.

Balls Food Stores currently carries pre-assembled chicken kabobs; and breaded, boneless breasts and marinated breasts in its service meat cases. The retailer also sells strips of spiced, marinated chicken for fajitas, an ethnic item that Moore says is growing in demand despite a lack of promotion.

One way retailers are differentiating themselves from their competitors -- while simultaneously building valuable customer loyalty -- is by producing one-of-a-kind chicken recipes for their service meat counters. Developing unique marinades, stuffed breasts and other poultry recipes, grocers like Strack & Van Til Supermarkets, Highland, Ind., have come up with a creative line of localized, ready-to-cook chicken items.

"To better connect with our customers, we've found a way to localize our stuffed chicken breasts by giving them names that have local ties," said Robert Stevens, the chain's meat director. "We are located near the Indiana and Illinois state lines, so we named a Canadian bacon and Swiss stuffed breast the State Line Griller. We also have a Crossroads griller that's stuffed with broccoli and cheddar cheese and wrapped in bacon."

The retailer's local stores also sell "Cowboy" and "Cowgirl" grillers, stuffed with hot pepper rings or jalepeno peppers. A choice of any two of the four stuffed products is $5. To encourage shoppers to purchase these unique creations, Strack & Van Til provides an abundant variety of cooked samples at the service counters, a low-cost effort that Stevens said is key to getting shoppers to convert to buyers.

Although many retailers delegate the creation of their store's value-added signature items to meat-department associates, Lunds Food Holdings, the Edina, Minn.-based operator of Lunds and Byerly's supermarkets, has taken a more aggressive approach in filling its service cases. Along with highly qualified service personnel working behind the counters, the retailer has hired a professional executive chef to oversee meat-department operations.

Lunds' executive chef, Dave Barber, also holds the responsibility of creating unique ready-to-prepare recipes for the company's upscale line of meat, seafood and poultry items. And, according to Larry Long, director of meat and seafood operations, sales in this category have been increasing steadily for the past few years, due in no small part to the introduction of specialized products under the retailer's proprietary Chef Market label.

"In the last two years, sales have been increasing in pork, beef, lamb, veal and poultry, but our chicken items are doing extremely well," said Long. "We have a line of Chef Market items at the service counters in all our stores and our executive chef has come up with a ton of different varieties for each category -- we now sell about 50 different poultry items alone. This has all evolved from changes in the marketplace and consumers showing more of an interest in upscale, ready-to-prepare items."

Long noted that the Chef Market line of poultry items is continuously growing and Barber is currently working on ready-to-prepare products made exclusively from organic poultry. The retailer is also considering offering its line of upscale chicken products precooked by the service departments and sold as prepared center-of-plate entrees.

Other value-added chicken items are also faring well in the marketplace, prompting some retailers to expand their departments to accommodate such top-selling items. Precooked, frozen products like breaded fillets, popcorn chicken and precooked strips are an answer to the pressing consumer demand for quick, convenient center-of-the-plate foods.

"Frozen, fully cooked chicken products have really come into their own recently and we have seen a nearly 50% increase in this category in a relatively short amount of time," said Scott Ruth, director of meat and specialty departments for Big Y Foods, an independent supermarket chain based in Springfield, Mass. "As the flavor profile of these items gets better and better, we are realizing how important it is to have them in our stores. Our biggest-selling frozen-chicken items are the skinless, boneless chicken breasts and buffalo wings."

Ruth added that these items seem to be favorites because consumers like the convenience of cooking as many as they want and putting the rest back into the freezer -- an option that has become more popular with improvements in packaging technology and the inclusion of zip-lock closures on packages.

Retailers are also realizing the intense consumer demand for more organic, natural products and, as a result, many are offering a larger variety of healthy chicken. And, adding yet another dimension to this category, manufacturers are also producing standard-weight packaging, a development that reduces the amount of time spent weighing and pricing individual packages.

In the midst of these product and packaging breakthroughs, many poultry manufacturers are taking advantage of the opportunity to brand their chicken creations. In a number of cases, manufacturers are giving national poultry brands a run for their money with the introduction of a regionally marketed line of chicken products.

"These brands have come out with a lot of marinated products and are now going into organics and naturals. But, one of the biggest innovations is the standard-weight packaging that eliminates the need to price each item separately," agreed John Story, president of John Story Consulting, Ocala, Fla. "The poultry business, especially broilers, has really become more of a branded commodity. And a lot of these brands are primarily regional -- like Gold'n Plump in the Midwest -- and they have proven that they can achieve extremely good distribution in their marketing area."

While many manufacturers are focusing their attention on regional penetration, retailers are also getting in on the action, promoting their own branded chicken items in cases next to top-selling national brands. This store-branding component of the retail strategy is becoming increasingly evident in supermarkets owned and run by European companies.

"Most of the chicken companies have had their names on products for a long time, but they are now placing more emphasis on prepackaging at the plant level to make it more visible," said Bill Roenigk, senior vice president of the National Chicken Council. "We also see more of a European approach toward branding, where retailers are getting more involved with their own chicken brands."