By Steve Ramsey and Chris DuBois
Value-Added Meat (that is, fresh meat items in the service meat case or overwrapped meat case that have at least one step of further preparation) has been growing steadily in recent years. These meat products grew a hearty eight percent in 2014 and are now a $4 billion category in the $48 billion total Fresh Meat market. And, Value-Added Meat is outpacing all other Fresh Meat growth (+5.6 percent in 2014) as well as Perishables and Food & Beverage. In fact, in 2014 Value-Added Meat represented an impressive 11% of total Fresh Meat growth.
One key to success has been Value-Added Meat’s nearly two percent annual volume growth over the last five years – this is in stark contrast to the volume for All Other Fresh Meat, which has declined even though both categories have the same commodity pricing pressures. No doubt busy lifestyles and the need for convenience and easy meal preparation, along with a focus on adding protein to meals, especially among millennials and Boomers, is helping drive this growth.
While there are not many places in the store to drive new growth and gains in market share, getting Value-Added Meat right can not only accelerate a retailer’s sales but even help the Total Meat department.
Here’s how to unlock the potential of your value-added meat brand:
Help your customers make dinner – Helping people decide what to have for dinner is a huge opportunity for your brand. The majority (70%) of dinner meals is decided on the same day, and 64% of meat and poultry buyers can be influenced in store (even though 81% of them make a shopping list beforehand). Make sure that your shoppers can easily see how your product is a simple meal solution for them, and have a separate strategy for weekday and weekend shoppers.
Tailor your offerings by store – You have to go beyond demographics to find your shoppers. There have been huge advances in shopper marketing and predictive analytics over the last few years – it’s now possible to understand which specific households are likely to buy and at which stores. Once you know that, you can better tailor your products in the store to the people who actually shop there. Interestingly, higher-performing retailers give more space to value-added meat than lower-performing retailers, and they invest more in more optimal store conditions, including signage that reinforces the key drivers of value-added meat purchases: convenience, easy prep and flavor exploration.
Optimize your assortments and flavors – Most value-added meat (90%) is comprised of chicken, beef or pork. But creating the right assortment of each in the meat case can be tricky. Chicken’s concentration of cuts and flavors makes it a candidate to conserve space while pork has more room for flavor experimentation with loins dominating sales. On the other hand, beef flavors are highly fragmented and require more space to customize products for local preferences. Bottom line: You want to differentiate on fringe meat flavors and cuts. To do that, you need to understand what will appeal to the consumers you’re selling to and where they shop.
Strategically price your products – Optimizing price gaps is the key to maximizing your sales and profits. We did an analysis on value-added meat chicken breasts versus no prep chicken breasts to understand how price gaps influenced the share of value-added meat. We found that, while people always buy chicken despite price, they switch between value-added and no prep depending on the relative pricing relationship. And, when it comes to promotion, feature ads for value-added meat drive nearly three times the volume of straight price promotion.
Now that’s worth putting on your plate.
This information is taken from a larger presentation we did at the 2015 Annual Meat Conference. If you’d like a copy of the deck email us at Steve.Ramsey@IRIworldwide.com or Chris.Dubois@IRIworldwide.com.