The Meat of the Matter
By George Anderson
A new study released by the Food Marketing Institute (FMI) and American Meat Institute (AMI), The Power of Meat: An In-Depth Look at Meat Through the Shoppers’ Eyes, finds that traditional supermarkets have an opportunity to gain a competitive advantage by developing their departments to meet the needs of local consumers.
Michael Sansolo, senior vice president for FMI, echoed this sentiment in a released statement: “Effective meat marketing and merchandising strategies provide supermarkets with a prime opportunity to differentiate their stores from other venues and grow their customer base.”
Janet Riley, senior vice president for AMI, put it succinctly. “American consumers prefer meat with their meals,” she said.
When it comes to determining the meat products consumers purchase, the study says price is the primary factor. According to the research, 90 percent of meat shoppers compare prices within the store and 80 percent do price comparisons across multiple locations.
The good news for supermarkets is that the vast majority of their shoppers (86 percent) who do most of their shopping in traditional stores buy their meat there. Those who go outside the channel are most likely to seek out a warehouse club (4.7 percent) or butcher shop (also 4.7 percent).
Interestingly, more than one in four supercenter shoppers go outside that channel to buy their meat.
While price is the primary factor in determining meat purchases, consumers are increasingly interested in buying items they perceive to be more healthful and of superior quality. Case in point is organic meats where 17.4 percent of shoppers report having purchased an item from this category in the past three months. The greatest percentage of these consumers bought their organic meat in supermarkets (48 percent), followed by natural/organic food stores (29 percent), butcher shops (10 percent), supercenters (9.3 percent) and warehouse clubs (1.1 percent).
Moderator’s Comment: How can conventional supermarkets use their meat departments to gain a competitive advantage?
Are there specific operators that you can point to that have used their meat department as a way to establish a point of difference with competitors? –
George Anderson – Moderator
Ryan is absolutely right on! If the Industry is ever going to create a kitchen away from home for its shoppers, it better start with a different attitude and service level from store personnel; and stop feeding itself on the obvious information.
It is as simple as that. All the organic cuts and specialty meats mean nothing unless the shopper feels she/he can gain the attention and knowledge from the butchers, hopefully; but probably, meat sales associates of the departments.
When do we understand that we have to spend money in educating personnel and, importantly, using such ability to create a point-of-difference vs. competition.
Few have taken such a position, and it’s likely the price/recipe/sales events will remain. FMI’s is a mass market report of information. Retailers need to do their own micro marketing to determine what is the magic button that works. Hmmmmmm
I still remember the meat manager at one of my dad’s stores, Eddie Lake, and how he spent more time in front of the meat case than in the meat room. He knew as many of the customers as anyone in the store, with the possible exception of the gregarious produce manager. He would talk with shoppers all day, and when he wasn’t out there, his deputy Jack Arledge was. These were union butchers who understood the importance of having a strong meat department in the overall marketing of the store. I spent three years going through the apprenticeship with Eddie and Jack and learned an incredible amount, in addition to making ground beef and breaking down a lamb – from how to deal with irate customers to how to cook the perfect steak. (I’m not sure which of these skills has served me better!)
The point is that it is the people that are going to make the difference. People who know the cuts of beef, who understand the importance of not having a dry turkey on Thanksgiving, who are now helping shoppers pick out the best Easter ham or lamb to suit their needs and who appreciate the fact many of their newer customers aren’t as skilled in the kitchen as their mothers and can help them with the basics. High quality, fresh product is the base, and the people will create the point of differentiation.
As for the second question, ShopRite and King’s both do an excellent job with their meat department. King’s is especially good at cross marketing the case with high-margin products. (I know…most of the products at King’s are high margin!)
Once again, the meat department presents a BIG opportunity for incremental business from Hispanic shoppers in most supermarkets in high-density Hispanic areas. Many Hispanic consumers shop at carnicerias (meat markets) so that they can get the cuts of meat, the quantities of meat, and have a Spanish-speaking butcher who really understands what they are looking for. Hispanics are great meat consumers – they like traditional meats like beef and pork, they like all parts of animals like tripe and heads – and they like to cook and eat at home. Seems like a high-potential proposition to me!
For too long, and for good reasons, produce has been at the forefront of supermarkets’ battle with rival channels. In the fray, meat seems to have been forgotten as an effective merchandising plus that can distinguish supermarkets from the Johnny-come-latelys. FMI’s findings confirm this fact. Now it’s up to supermarket operators to put meat front and centre.
Once again a troubled industry responds to changes in consumer preference with research designed to yield a blinding flash of the obvious! Be serious. Supermarket shoppers buy their meat in the supermarket. Stop the presses! With price indexing so high with the majority of shoppers, the big opportunity would seem to be to reduce margins in the meat department. This is exactly the kind of thinking that keeps the channel held back. One of these days Wal-Mart is going to figure out that it should quit loading up its meat with saline solution and the roof will really fall in. The big opportunity in meat is in niches — organics, ethnic cuts like offal cuts, chicken feet, etc. BUT, in aggregate, these pale in comparison with the tonnage of ground beef sold. It won’t make much difference how well you handle the niches if you lose the majority of the category, and reinforcing the importance of price will just make it easier for Wal-Mart when/if it ever gets its perishable act together.
Avian flu and mad cow proliferation are health issues driving quality demands. Retailers who position their assortments to meet health/quality issues may retain a competitive edge as long as the competition remains price-driven.
Get that meat manager back out in front of the counter and get rid of the bright red vacuum packed products. For a carnivore, the sight of fresh meat is tantalising and can be irresistibly tempting. If they’re not sure what to do with it, knowledgeable staff can make all the difference. Being able to answer questions about where and how the animal was reared would also be extremely useful. Much as I sympathise with the vast numbers of people on tight budgets who are probably desperate for a new way to cook ground beef, there is much evidence that people are increasingly prepared to pay more for quality. I’m certainly not suggesting that this is an excuse to raise prices but I think that quality and service will be paid for if people believe that they are getting value for money.
We have gathered some interesting data over the years:
– The biggest drivers of meat sales: the family’s meat-eating preferences; having easy and delicious meat recipes.
– The biggest obstacles in selling meat to those who want to purchase it: the cut isn’t available or the purchaser doesn’t know if it is (non-standard labeling), the quality is not what is desired (variations within USDA grades), the cut or item costs too much, the purchaser’s recipe is not as good as desired, the meat counter is unappealing (smell, appearance, etc) or seems unhealthy, there is no counter help or the counter help is unknowledgeable, there is no way to get the exact cut or trim-level you want (kryo-pack vs. having a butcher available).
Within this data is a treasure trove of simple things the industry can do to improve sales; but note that many of these things go against traditional practice. It seems likely to me that only a handful of stores will make meaningful changes; I suspect the rest will have a difficult time doing so.
Definitely an area that can create differentiation. Carrying Prime or Choice where the warehouses carry Select; carrying niche cuts; a knowledgeable butcher than can rattle off a few great, easy ways to prepare any given cut;, and a selection of pre-marinated beef, chicken, lamb, etc. is a great way to create loyal customers.
Ron Margulis’ story above is an excellent example of what is taking place every day at many independent stores that have survived Wal-Mart and watched the large plain vanilla chain stores drop one by one. I hear it all the time from independents who see store sales drop when Wal-Mart opens but their meat sales distribution rise 2-3 percentage points. In other words, meat sales are not impacted compared to the total store. I really don’t care who I buy non perishable items from. Even produce, I’m not too concerned about as long as the quality is there. But when I buy meat, I don’t want to see it pre-wrapped coming out of a box from some plant 1,000 miles away being stocked by a teenager in tennis shoes. I want to see a real meat-cutter, who looks like a meat-cutter and talks like a meat-cutter.
Stores that have been watching the POS data already know this and are using the knowledge. The stores that are relying on the general findings of the FMI study still don’t know what “their” consumers want so following the findings of the study won’t help them meet their customers’ needs.
Supermarkets can differentiate themselves by getting back to basics – in short, by selling real meat. No more beef and pork injected with a *solution”. No more hamburger ground in 1000 pound lots, prepackaged in a distant factory that has the consistency of stucco. And a real butcher instead of a brain dead stock clerk who unpacks packaged meat from a shipping case and loads it onto the shelf.
This will cost more than the current situation but consumers who drive to distant points to try to obtain better quality and service would welcome the opportunity.
I agree and can understand that price is the primary concern for many or most working families on a tight budget. But with the growing lack of trust in our government’s handling of the Mad Cow situation, the local meat retailer is the only solution in trying to find a safe supply. While this concern is a niche at present, it will only take one news story to put it back in the headlines. And heaven forbid the death of the first person in the this country that can be directly attributed to a U.S. cow and it is now longer a niche.
Providing a good selection of safe meat products seems like a much better supermarket strategy to me than price.