The past decade saw significant changes in modern retail meat departments. Case-ready programs became much more prevalent, private label came into its own and marketing claims proliferated.
Commodity meats are still easy to find, of course, but where shoppers once faced the choice between U.S. Department of Agriculture Choice or Select, or between a branded product and an unbranded product, they can now pick from items that are organic, grass-fed, “all-natural,” humanely raised, free-range and USDA-certified “Never Ever 3” — raised with no hormones, no antibiotics and no animal by-products in the feed. The list goes on.
But what do all these new claims mean to shoppers, and how much influence do they have on purchasing habits? Retailers appear to agree that shoppers are asking more questions about how their meat was raised and produced, and that these different marketing claims have helped them address those questions and respond to a variety of different customer concerns and requests.
“Many of our customers are looking for alternatives to conventional beef,” said Randy Ong, director of meat and foodservice for Sunflower Farmers Market, Boulder, Colo. “And, there's several choices — organic, all-natural and grass-fed. We do get questions regarding those, and we explain the different tiers of those to our customers. As consumers become more educated about the products that they put in their bodies, I think a lot of those questions will continue to come to the surface, and we'll continue to field those types of questions.”
Williamsville, N.Y.-based Tops Friendly Markets just launched a new private-label, all-natural, antibiotic-free chicken brand, and Jim Lane, director of meat and seafood, said it received “an almost instantaneous response” from customers.
“We think customers are really embracing this product. … Sales have been even better than we expected,” Lane said.
Noting that Tops operates about 130 stores in western New York and Pennsylvania, Lane said that the company serves a very diverse customer base. And to be successful, his meat departments must cater to the diverse demands of those customers.
“We're very conscious of what our customers are looking for. These claims like ‘all-natural’ and ‘antibiotic-free’ and ‘fresh’ and ‘USDA Choice,’ they are all very important. If you were only to offer a [single type] of meat, and didn't have any other varieties, you would only be appealing to one customer base. The more you offer the customer, and the more you teach the customer what you have to offer, you're attracting more clientele and more purchases.”
Lane said that he did not believe the importance of these different marketing claims had diminished during the recession, although customers had been trading down, and purchasing more ground meat than steak, for example. And, the company's meat departments have continued to focus on quality in their own marketing efforts.
“The claims that are really important to us are ‘fresh cut in-store.’ Things that we do, in our store, that may be unique to our marketing area,” Lane said. “‘USDA Choice, Grade A’ is also very important. We don't deviate from that, we only offer USDA Choice or better. And in addition to that, when you put that in combination with a claim of all-natural or antibiotic-free, you're really delivering a message of quality to the customer.”
These marketing claims can each imply very different things about product quality, animal treatment and other issues. But, if a customer does not understand those implications, they probably don't understand why products are priced differently, or whether a grocer is holding its meat departments to a high everyday standard.
Tops has also been emphasizing the expertise of its meat department staff for the past year with its “Real Meat, Real Butchers” campaign, a theme that spotlights the chain's trained butchers and fully staffed meat departments in radio and television ads, as well as on the company's website, and in store circulars.
As a result, Tops puts a lot of effort into regular training programs. For shoppers to understand what makes Tops' products special, meat department staff must be able to communicate those points of difference.
“I would like to believe that [USDA Choice, Grade A] means a lot to customers, and that they know exactly what it is, but I'm afraid that's not really the case,” he said. “I think customers recognize terms like Angus more so than Choice or Select. We educate our meat managers. We have seminars throughout the year, with guests who teach and train. We've had the National Cattlemen's Beef Association come, we've had the New York State Beef Industry Council, and suppliers come to train and teach our managers and assistant managers on the attributes of different grades and different products so that they can teach it to our customers.”
Tops has also put together an advisory council of meat managers and store managers that it uses to get feedback from shoppers, and to develop and introduce new products and new advertising tactics, Lane added.
“They're the voice,” he said. “They're hearing it from the customers and they relay it back to me. And we go to work and try to deliver that message that they're looking for.”
Retailers contacted for this report all agreed that the growth of labeling and marketing claims has been good for meat departments. They help differentiate premium meats from commodity products, and different claims often appeal to different shoppers.
“It's complicated our existence quite a bit, since we've got to have eight or nine varieties of beef to satisfy our retailers and consumers,” said Kelly Mortensen, corporate meat, deli and seafood director with Associated Food Stores in Salt Lake City.
In addition to its own retail stores, Associated provides wholesale distribution services to more than 600 supermarkets, ranging from small-town independents to gourmet grocers in high-end resort towns.
To help all of those retailers find the right assortment for their shoppers, Mortensen said Associated Food Stores offers a regular commodity beef program, as well as a “never-ever” Angus program. Although the USDA only requires meats to be minimally processed and contain no coloring, preservatives or additives to merit its official “natural” claim, Mortensen said that Associated Food Stores does not traditionally tout its commodity beef as natural, partly to keep it separate, in the shopper's mind, from the NE3 claim.
“We try and distinguish between the two,” he said.
They also offer three different Angus beef programs, ranging from a genetically verified program to a 50% black hide program. One of its resort-town members even offers an NE3 USDA Prime line of products.
The market for these various products continues to be defined mostly by demographics, Mortensen said. After all, many of these items can range from at least $1 to $1.50 more per pound, compared with conventional alternatives. Yet, during the recession, Mortensen said that categories such as “naturally raised” had sustained themselves. Not growing much, but not facing declining sales, either. He also said he had been recently surprised by an uptick in requests for organic beef and pork, considering the recession.
While the proliferation of claims does create challenges, “it's important to our industry. I think it's becoming more important to consumers as they become more educated,” Mortensen said.
And, retailers often find themselves helping out with the education process.
“There is a lot of confusion out there,” he said. “Our job is to help the consumer digest that information, although it's still difficult.”
Ong agreed, adding that he believes customers are becoming more concerned about what's being fed to animals or what's being given to them as they grow.
“Those issues are becoming more and more prevalent,” Ong said. One of the advantages he feels his meat departments have at Sunflower Farmers Market is that it is a smaller company, and as a result, it is able to partner with smaller farming operations, which can help offer a point of difference with competitors.
“In the future, smaller companies that are trying to offer natural upgrade their offer to natural, or become more involved with natural products will have an advantage,” he said.
Right now, he said, he does not see issues like the use of antibiotics in conventional meats as something that is affecting sales, but as meat marketing claims continue to become more prevalent, they are going to lead to more questions from shoppers.
“I don't think it has affected meat sales yet. I just think consumers are going to continue to ask questions. And, as these claims continue to come out on products, [customers are] going to become more concerned about antibiotics and hormones. There's scientific studies being done, and a lot of media coverage of those issues.”
