Retail Meat Case Audit Illustrates Trends, Opportunities

MATTHEW ENIS

Fresh meats have gained 3% of linear feet case share since 2004, partly at the expense of processed meat and seafood, according to the National Meat Case Study 2007, a major national audit of supermarket and club store meat departments sponsored by Cryovac/Sealed Air Corp., the National Pork Board and the National Cattlemen's Beef Association. Conducted by auditors from Texas Tech University, Cryovac and the National Pork Board, the study took a physical count of all beef, pork, chicken, turkey, lamb and veal products in more than 130 supermarkets and club stores in 48 major U.S. markets during the first quarter of 2007.

Other topline data from the study indicate that private-label meats are up 11 percentage points, and now represent almost a quarter of meat case share, reflecting the large number of retailers that have launched private-label meat programs since the 2004 study, noted Randy Irion, director of retail marketing services for NCBA.

The expansion of private-label product came primarily at the expense of unbranded meats, which declined 9 percentage points, from 38% of total packages in 2004 to 29% currently. Beef and ground beef posted the strongest gains, with 31% of beef packages now bearing a private label, up from 15% in 2004, and 21% of ground beef packages now featuring a house brand, up from 7% in 2004. Retailers also expanded private-label pork and chicken programs, with 19% of pork packages now private label, compared with 11% in 2004, and 26% of chicken now private label, compared with 15% in 2004. Turkey also experienced more modest private-label growth, with 7% of packages now private label, compared with 4% in 2004.

Another trend illustrated by the audit is the rapid growth of “all natural” claims. Twenty-nine percent of all meat packages now bear some type of natural claim, up 7 percentage points since 2004. Chicken continued to show the most claims, with 67% of product featuring natural labeling on the package. Ground beef experienced the most significant jump in natural claims, with the claims now included on 25% of ground beef packages, up from 7% in 2004. For all other beef products, only 4% currently feature natural claims, up from 2% in 2004.

Currently, the U.S. Department of Agriculture allows producers to make “all natural” claims on any meat product that was minimally processed and contains no artificial ingredients. For now, many producers that use the “all natural” claim have supplemented it with other claims, such as “antibiotic-free” and “hormone-free.”

USDA Organic certified meats, which must be raised and processed according to a much stricter set of standards, continue to demonstrate rapid growth, but remain a tiny percentage of overall fresh meat sales.

Organic chicken is the largest single species category, with 1.8% of total chicken packages now featuring a USDA Organic seal, up from 0.5% in 2004. Organic ground beef grew as well, from having virtually no presence in the average meat case in 2004 to representing 0.7% of total packages today. The fastest-growing organic meat category, however, was “other,” which primarily includes alternative meats such as buffalo and bison. Organics now claim more than 2% of these alternative meat sales.

Nutritional labeling has also continued to become a more popular feature, with 57% of packages now including nutritional information, up 13 percentage points since 2004. The expansion of this information occurred with every major species. Twenty-four percent of beef packages now feature nutritional labeling, up from 16% in 2004; 77% of ground beef packages now feature nutritional information, compared with 68% in 2004; and 53% of pork packages now have nutritional labels, compared with 41% in 2004.

Chicken, in particular, experienced a sharp increase in on-pack nutritional labeling, with 74% of packages now highlighting the information, compared with 58% in 2004. Turkey also posted a 10-percentage-point increase in these labels to reach 88% of total packages, up from 78% in 2004.

By contrast, on-pack cooking information appears to have peaked, declining 2% during the past three years to stand at 32% of total packages. The sharpest declines during the past five years have been on beef and ground beef packages. For example, in 2002, 43% of beef packages included cooking information, but in this year's study, only 32% did. Similarly, in 2002, 34% of ground beef packages offered cooking advice, but now only 18% do.

Although that decline would seem to be at odds with broader trends toward offering shoppers more information about cooking and preparing meals at home, anecdotally, more retailers are offering this information via recipe cards and recipe kiosks. Also, cooking information has remained more consistent on pork, chicken and turkey packages since 2002. One explanation for the sharp decline of this information on beef packages could be that labels are simply getting more crowded with branding, special claims and other information, noted Jerry Kelly, national coordinator, retail task force, for Cryovac.

The trend toward enhanced, or “moisture-added,” products appears to be cooling as well. Moisture-added products declined from 16% of total meat packages in 2004 to 12% in 2007. However, those losses were partially offset by gains in products categorized as both enhanced and flavor-added, which grew from 5% of total packages to 7%. All major species shared these gains, although pork and turkey products demonstrated the strongest growth in the flavor-added category.

Finally, another broad trend illustrated by the audit was the ongoing growth of case-ready meats. The share of linear feet devoted to full-service meat and seafood counters remained consistent, and the audit indicates that more retailers are installing full-service counters in new stores — 79% of retailers represented in the survey had full-service cases in 2007, compared with 67% in 2002.

However, case-ready product has steadily posted gains in the total fresh meat case, indicating that retailers may be cutting back on the number of items that are wrapped in-store for self-service areas.

Sixty-four percent of packages were case-ready in this most recent audit, compared with 60% in 2004 and 49% in 2002. The gains were most pronounced in the beef and pork categories, with 27% of beef packages now case-ready, compared with 23% in 2004, and 56% of pork packages now case-ready, compared with 50% in 2004. Case-ready ground beef also posted a small increase, up one percentage point to 67%. Chicken and turkey, which have long been categories dominated by case-ready product, stayed flat, with 94% of total chicken packages case-ready and 97% of turkey packages case-ready this year.

Overall, in-stock position has been consistent for each of the retail meat case studies since 2002, with case-ready products having at least five packages per stockkeeping unit present 71% of the time, and store-wrapped products having at least five packages per SKU present 50% of the time.

However, there were many minor variations on this trend from species to species. Case-ready beef products, for example, were in stock only 59% of the time, down from 62% in 2004, while store-wrapped beef was in stock 47% of the time, compared with 48% in 2004. Chicken experienced similar, minor slumps in in-stock position, slipping from 81% of case-ready product in stock during 2004 to 79% now. Meanwhile, both ground beef and pork improved their positions, with case-ready ground beef in stock 87% of the time, compared with 84% in 2004, and store-wrapped in stock 70% of the time, compared with 69% in 2004. Case-ready pork was in stock 68% of the time, compared with 63% in 2004.