Meat Marketing Trends

Curry A. Roberts
, PM Holdings, L.L.C., Richmond, Virginia


Meat Marketing Trends

  • Increased Competition for Limited Consumer Dollars
  • Enhanced Consumer Awareness and Increased Consumer Scrutiny and Skepticism
  • Heightened Consumer Expectations
  • Results in Industry Structural Changes
  • The Case-Ready Revolution
  • Convenience Items
  • The Race to Brand
  • Category Management
  • "Meat-ing Ethnic Needs"
  • Dot.Com’s
  • Forcing Production Standardization
  • Branding, USDA Certification and USDA Process Verification


Consumers Expectations Continue to Rise

"I think with 20/20 and some of these Dateline shows have made Americans much more conscious about what’s going on…People are interested, they may ask even more questions."


The Case Ready Revolution

Three key factors driving the change economics, competition and food safety

  • Supermarket chain consolidation- forcing retailers to cut costs to stay competitive
  • Labor constraints
  • Improved product consistency
  • Fewer product handlers


Case-Ready Strategies

Two production strategies

  • Satellite cutting
  • Centralized cutting

A few of the players

  • IBP- centralized concept with Wal-Mart
  • Excel- satellite concept with Kroger
  • Farmland (pork)- satellite
  • Hormel and Premium Standard (pork)-central
  • PM Holdings and Ukrop’s (satellite)
  • King Soopers (regional)
  • Heinen’s Fine Foods (regional)


Components of a Successful Consumer Ready Program

  • Long-term commitment
  • Baseline analysis of product and sales
  • Measurable merchandising plan development
  • Known incoming cost by product (currently estimated)
  • Pre-pricing impacts
  • Labor conversion strategy-reduce and control labor requirements
  • Transition of labor force from meat cutters to customer service representatives
  • Improve food safety through improved handling systems and eliminate cross contamination
  • Increased marketing opportunities


Is it Bigger Than Boxed Beef?

Source of supply will become increasingly more critical

  • Source and production practice verification
  • Product consistency and quality
  • Red meat yield
  • Ability to meet JIT Delivery demands

Drive increased branding


A Closer Look at Source and Production Practice Verification

Why do it? Is it important to the Consumer?

  • Our mission was to secure a consistent, palatable, predictable high quality product for our retail partners
  • Quality is affected prior to our plants
  • Source verification was the means to the end…not the end

We came to the realization that in order to monitor, standardize and measure those critical control points that affect product acceptance and palatability, source verification and production practice verification were imperative.


Central Cutting

We also realized through our experience with our central cutting/case ready packaging facility--the dramatic improvements in retail yields, and product performance to be gained when using a superior product

Brand Success: different, better, value, trust

(Mack Graves, Latigo Management and Consultants, Inc.)

Visually we can improve consistency through selection …palatability and continuous improvement must be managed

Quality Inputs Quality Output


USDA Process Verification provides the Mechanism

  • ISO 9002 quality system model
  • establish targets, standardize practices
  • verify compliance to standards
  • measure against the target
  • complete sharing of data with producers, feedlots and customers
  • benchmark performance
  • develop preventative methods
  • Audited by a third party improves credibility

Function of the Product, Process and People.


A Step in the Right Direction (Focus Group Results)

Consumers generally believe Process Verification was a step in the right direction

"I like this terminology more than Select and Choice..because to me it sounds at least like they’re taking it from start to finish."

"I think our country’s moving towards being healthier, and I think this is a step in the right direction. They’re probably seeing Americans moving away from red meat, and this is one way of ensuring quality"

"I think you assume a lot from that-you think, ‘okay, because they’re doing all these things, everything else must be…You get a better feeling about the whole process"

"You just feel better"


Briefly on the Other Trends


  • Cooked or heat and serve items
  • Adding value to a time-deprived consumer
  • "Meals for two"…dedication of case space by innovative upscale retailers

"I think Richmond itself is an epicenter for meal solutions. It’s the closest thing we have in this country to the UK system," said Brian Salus, president of Salus and Associates (March 15, 1999, Supermarket News)

"The successful introduction of more value-added products helped propel growth in the CAB Program, up 58% from the prior year" (April 3, 2000, Supermarket News)


Briefly on the Other Trends


Experience with Kosher, private label and Amana Beef

Category Management

A recent study by NCBA showed that category management in the meat department resulted in a $40 million increase in beef sales

Through consumer interviews they found that 32% of shoppers have "difficulty finding a specific cut of meat". Of that group, 40% will purchase another cut, 33% select a different meat and 12% will choose not to buy meat at all.

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