Home » Shoppers Are Spending Less – Meat, Poultry and Seafood Adapt
Feature National

Shoppers Are Spending Less – Meat, Poultry and Seafood Adapt

The Shelby Report Meat Poultry Seafood Feature

by Ashley Bates/staff writer

Whether it’s beef, pork, poultry or seafood, meats are one of the most important parts of most Americans’ diets. They have traditionally been the star of the breakfast, lunch and ­dinner plate, but today as the environment influences farming and manufacturing the industry must adapt and change with the market.

“The Power of Meat” study released in February by the American Meat Institute (AMI) and the Food Marketing Institute (FMI) reports that supermarkets maintained their market share as respondents’ primary store for meat and poultry purchases is 68 percent.

“Clearly, supermarkets are finding ways to maintain their customers’ business to a major extent in the midst of an extremely difficult business environment,” the report said.

The AMI/FM study, conducted by 210 Analytics, was sponsored by Sealed Air’s Cryovac Food Packaging Division.

The report found that shoppers are spending less per week on groceries, which includes meat.

“Spending less by buying less appears to be an effective measure,” the report stated. “Shoppers who say they are buying less spend nearly $14 less than the national weekly grocery bill average. For retailers, elimination of items rather than substitution is a dangerous development. Shoppers are also less interested in family packs and report that more ­substantial discounts are needed to prompt them to purchase in bulk.”

Other dominant factors for customers in meat and poultry selection is price per pound, influential marketing and merchandising measures, smartphone apps, a rise in heat-and-eat meats and growing interest in spicier and ethnic foods.

But, Tyson representatives say that “escalating feed costs, due to increased prices in corn and soy, are making it more difficult to compete in the poultry industry. Current projections for increased corn and soy costs are approaching $0.5 billion year over year. We have no choice but to pass along these costs to maintain profitability in the chicken segment of our business.”

So shoppers react in different ways, eating at home more, for example or buying less at the supermarket.

Because shoppers are cooking at home more often—an average of four times a week— more and more often customers are spending time in the seafood department and are ­looking for healthy and sustainable seafood.

Whole Foods Market recently launched a sustainability ratings program in their stores for wild caught seafood through a partnership with Blue Ocean Institute and the Monterey Bay Aquarium.

The poultry industry, specifically Tyson, has made sustainability a priority throughout the corporation.

“We can’t speak for the whole industry, but we believe there is a higher level of consciousness about sustainability and environmental quality. We participate in the Sustainability Consortium which is jointly administered with the University of Arkansas and Arizona State University, and composed of corporations worldwide, all focused on improving consumer product sustainability,” according to Tyson officials.

The Whole Foods initiative with the Monterey Bay Aquarium builds on sustainability ideals that are seen across many industries.

The initiative has been in place since 1999, and it complements Whole Foods’ existing farmed seafood standards, among the highest in the industry.

According to the Monterey Bay Aquarium, seafood to “avoid” are overfished and/or fished or farmed in ways that harm other marine life or the environment.

James Magee, sales manager for Ruggiero Seafood Inc., based in Newark, N.J., says that seafood sales are being affected by the new sustainability question but also by the economy.

“A lot of people are eating at home now and trying to eat out less. I think it has helped seafood on the retail end, especially with prepared foods,” said Magee.

Magee said that each year the seafood industry is seeing less supply and this year is no different.

“We do mostly calamari but we are starting to diversify as well and add other products, some value-added items, salad, farm-raised fish,” said Magee, who added that squid has gone up 30 percent in cost recently. “The reason we are doing that is because we are seeing less and less supply each year on the squid, and I think in general in the seafood business from what I hear. I’ve talked to different guys about shrimp and all these other (seafoods), and for some reason there is a shortage on the raw material—items that are farm raised like tilapia or species of shrimp, and most of the stuff that is wild caught.

“Salmon, shrimp out of Mexico, octopus—there’s very little supply available right now and prices are extremely high. The seafood market in general in the U.S. is starting to see ­increased prices and a lot of that has to do with availability of product,” Magee said.

In the turkey industry, there is a true shortage of feed, which was addressed in the U. S. Senate recently.

Rick Sietsema, partner and CFO of Sietsema Farms in Allendale, Mich., told the Senate Committee on Agriculture, Nutrition and Forestry that the current run-up in feed prices is due to short corn supply caused by the federal ethanol mandate and has created significant ­uncertainty on the turkey industry, the National Turkey Federation reports.

Feed accounts for 70 percent of the cost of raising a turkey, and corn is 70 percent of the feed ration. Corn and other feed prices have risen to new levels, corn going from $4 per bushel to more than $7 in barely a year.

“The turkey industry is looking for reform of the existing ethanol policy, a safety net that ensures corn prices and availability will be less volatile in the future,” Sietsema said.

Sietsema told committee members that another challenge facing the industry is USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) new proposed marketing rule.

The injury provision in the proposed rule would make it easier to sue or bring action against livestock and poultry processors. Sietsema explained that studies found that the proposed rule would have a negative impact of more than $360 million annually in the turkey industry.

The chicken industry is striving to keep its place in the meat case. With the help of a social marketing firm and a revamped marketing strategy, the National Chicken Council (NCC) now has a more dominant presence.

Tyson had already implemented marketing tactics in the past to keep pace with other ­poultry leaders.

“Tyson Foods has tremendous brand recognition both with consumers, and our retail and foodservice customers. We continue to use traditional business-to-consumer and business-to-business marketing, but we have also made effective use of social media channels a priority,” Tyson officials said.

The NCC, which Tyson is a member, represents the companies that produce and market chicken and chicken products. Like many companies in the quickly-changing media environment, the NCC had lost its voice in the traditional media space, according to Social Fulcrum.

Social Fulcrum identified that the NCC’s exposure had declined because of a variety of factors. For one, food sections in newspapers declined across the country, and there was no Facebook page, Twitter account or an online public relations strategy.

Within one year, Social Fulcrum targeted food bloggers to promote the organization, promoted the NCC through a video contest and engaged consumers through social media outlets.

The “I Love Chicken Video Contest” was designed to engage consumers and create ­valuable content that promoted the NCC brand.

“By creating a strategic plan that leveraged targeted media, our engagement with fans/ followers, strategic partnerships with two national brands and constant conversations found through intensive research, we were able to create high-quality video content, blog posts and more, distribute that content to a large audience and dramatically increase the NCC ­audience size and brand awareness,” the recent Social Fulcrum case study report stated.

The campaign precisely targeted more than 32 million directly-tracked impressions. The NCC audience increased to 41,000 people (a 107 percent increase from 2009) and website traffic increased by more than 20 percent vs. 2009, according to Social Fulcrum.

To find ways to create more excitement in the meat department at grocery stores, Midan Marketing and Shugoll Research came together in April to present “The Economy and its Impact on Meat and Poultry Purchases—Insights from New Consumer Research” at the 2011 AMI Expo conference.

“Once Upon a Protein: The Story of the Meat Case” delivered a research-based blueprint of solutions meat departments can implement to create long-term customer loyalty.

Problems in the meat department, according to the Midan and Shugoll’s research, include lack of visual/color excitement, difficulty finding a store associate for help, customers don’t like the messy packaging, messy and disorganized, expensive, hard to find new and different meats/cuts and messy.

Short-term solutions to meat department customer perception is cooking something that is seasonal and smells delicious in the department along with providing cooking tips and recipes. Offer free samples of easy-to-prepare dishes and cooking demonstrations, offer a variety of portion sizes in the meat case, and one of the most interesting, is using different packaging color, size and type to make proteins easier to recognize.

According to Tyson officials, the economy will be an ongoing struggle for both producers, distributors, retailers and consumers but Tyson has adapted by encouraging other poultry products in stores.

“The economy continues to be a challenge for our retail and foodservice customers as well as consumers. One offering change that’s been impactful to our business is in dark meat,” they said. “We’re making dark bone-in, boneless and value-added items, which are traditionally breast meat only, more available to U.S. consumers than they have been in the past because domestic demand is higher. Consumers watching their pocketbooks are quickly recognizing the value in these products, so we expect to see growth there.”

Can retailers and suppliers defend against the supply chain catastrophe?

Advantage Group USA provides enlightening answers to questions regarding how the supply chain crisis should be approached.

Learn More From Advantage

Featured Photos

Featured Photo 'Pipeline To A Cure' Cystic Fibrosis Fundraiser
Hyatt Regency Resort
Huntington Beach, California
Share via
Copy link
Powered by Social Snap