VALUE ADDING

MATTHEW ENIS

When Midan Marketing and Shugoll Research set out recently to study how consumers perceive the many different brands available in supermarket meat cases, one of the first things they discovered was a surprising lack of brand awareness among shoppers.

“When we got into the research, we found that on a spontaneous recall basis, there are a lot of consumers out there who couldn't tell us any beef brands or pork brands,” said Michael Uetz, principal with Midan Marketing, Chicago.

In fact, out of 600 in-depth interviews with shoppers, half of all respondents were unable to name a single pork brand, and 46% couldn't name a single beef brand on an unaided basis.

Chicken fared better, with 71% of shoppers able to name a fresh chicken brand without being prompted. But, even after viewing a list of brand names, few consumers were able to list more than two pork brands that they recognized, and only about half were able to correctly pick five or more beef or chicken brands.

These results may be less a cause for concern than a snapshot of where the industry is right now in terms of branding. Branded, case-ready chicken programs have been prevalent for decades now. By contrast, beef and pork options at the average supermarket were largely unbranded until relatively recently, when private-label programs began to proliferate.

However, for retailers now working to give the case-ready portions of their meat cases an image of quality and consistency worthy of higher prices — during a time when price inflation is set to outpace paychecks for the foreseeable future — the question is, can brands still do the job alone?

“Seventy percent brand recall [for chicken] is still pretty good,” said Richard Lobb, communications director for the National Chicken Council, Washington. Lobb noted that Tyson is the only coast-to-coast chicken brand, and that brand names for fresh chicken, in general, are more dominant in metropolitan areas.

Similarly, while noting that supermarkets have to determine what is best for their shoppers on a market-to-market basis, Jarrod Sutton, retail marketing manager for the National Pork Board, said shoppers already pay close attention to products in the meat case, with or without branding.

“When people go to the cereal aisle, they know what they're going to get … they don't spend a lot of time looking for specific products. Contrast that with the meat case, where consumers are spending over four minutes on average picking up packages, looking at the prices, looking at cuts. There's not a lot of brand identity…. So, while they may not be able to recall a specific [pork] brand, it's OK as long as they know that it's ‘The Other White Meat’ and that they had a pleasant eating experience.”

But, ever since the late 1960s and early 1970s, when names like Perdue, Tyson and Holly Farms began emerging on retail shelves, brands have presented a distinct value proposition for suppliers and consumers in the meat case.

“The idea was that if consumers thought it was a high-quality product, they would buy on a repeat basis,” Lobb said. “They could also charge more for that, but then you also had to guarantee the quality and consistency that the customer was looking for.”

Uetz said that respondents to Midan Marketing's Power of Brands study did make distinctions between national brands, store brands and unbranded products. Fifty-six percent of respondents said these options varied greatly based on price; 48% said they differed by value; 45% said they differed by quality; and 42% said they differed by tenderness. Also, 38% said they varied in terms of freshness, 35% said consistency. An executive summary of the report's results is currently available at www.powerofbrands.com.

The numbers for quality and tenderness are promising, but if 56% of shoppers think that the biggest difference between branded, unbranded and private-label products is pricing, and only one-third think that brands offer the advantage of consistency, retailers and suppliers may need to reconsider their promotions and messaging behind those brands.

Lobb pointed out that in the chicken industry, branding had reached a point of diminishing returns as a few top suppliers began to dominate the market and introduce new efficiencies into production.

“We do have the historic problem that, if anything, over time, chicken prices have been falling [in inflation-adjusted terms],” said Lobb. “The price of skinless boneless breasts was falling even as production was rising.”

Value-added, precooked and heat-and-serve options have been the chicken industry's solution in recent years, Lobb said. And, according to the recently published National Meat Case Study 2007, sponsored by Cryovac, a division of Sealed Air Corp., along with the Beef Checkoff and Pork Checkoff programs, value-added options grew from 4% of total meat case packages in 2002 to 10% in 2007.

“It has been very difficult to seek higher prices for fresh raw chicken, and that's one reason that processors have been so interested in these value-added products, because they can charge more for that.”

Although value-added chicken only accounts for about 7% of chicken in the average meat department, many of these new chicken options are appearing in the frozen food aisles, as well as in delis. By contrast, value-added pork options have almost doubled their package share in the meat case in the past three years, from 12% of packages in 2004 to 23% in 2007. Turkey saw a notable 5% increase in the category, with 19% of packages now including an added flavor or ingredient, compared with 14% in 2004.

Retailers with full-service meat departments have also found that ready-to-cook options in the meat case are a great way to bolster loyalty by offering shoppers restaurant-quality options that are simple to prepare at home.

At Dorothy Lane Markets, shoppers can find a selection of 20 to 25 ready-to-cook options on a regular basis. Regularly featured items include Italian specialties such as Fagottini di Pollo, boneless chicken thighs seasoned with salt, pepper, fresh rosemary and garlic; Petto di Tacchino, boneless, skinless turkey breast stuffed with fresh garlic, basil and fennel; and Monastici, boneless eye-of-round thinly sliced and rolled with mozzarella cheese and Prosciutto — all recipes inspired by a week that meat and seafood director Jack Gridley spent working at a butcher shop in Italy.

“There's also a few local, independent restaurants that we play back and forth on,” Gridley told SN. “Items that are seen in the restaurant, we'll make available here, and vice versa — items that we carry, the restaurants will promote.”

He continued: “We believe that it's the wave of the future. People want to prepare great meals at home, but they want to spend less time in the prep department.”

Although value-added items currently account for only an average of 7% of beef products in the meat case, Randy Irion, director of retail marketing services for the National Cattlemen's Beef Association, said that several trends indicate that opportunities will continue to grow in the segment for all proteins.

“Perceived value is the operative word here,” he said. “There's a situation today where convenience is very important, for two reasons: People are time-starved, and they don't possess a lot of cooking skills.”

Consumers are also eating out a lot more today for those same reasons, Irion added, so they have had the opportunity to try items at restaurants that they don't know how to make.

“If your comparison for a precooked pot roast is buying that pot roast and preparing it yourself, there's quite a premium [in terms of price]. But, if your comparison is going out to dinner, it's very economical.”