by Terrie Ellerbee/editor–Midwest and Southwest
The “Power of Meat 2017” report explores shoppers’ perceptions, attitudes and behaviors and comes complete with market insights. The report is now in its 12th year, and the largest crowd to date gathered to learn from it at the recent Annual Meat Conference in Dallas.
Presented by Anne-Marie Roerink, founder of 210 Analytics, the report is an “in-depth look at the meat department through the shoppers’ eyes.”
The Power of Meat includes not only survey data but also point-of-sale and panel data from IRI, Nielsen and MarketTrack. This year, results from a retailer survey were part of the report. Ten questions were sent to supermarket retailers about their meat programs, differentiation angles, their strengths and what they are trying to do in customer service. Fifty-five retailers representing more than 19,000 stores responded.
Roerink said 2016 wasn’t a bad year for the meat industry, but a mixed one.
“It certainly was an upside-down year compared to 2015,” she said. “One thing is for certain, we have to do better in 2017.”
In 2015, total volume had made a little bit of a comeback, increasing 0.7 percent after many down years. In 2016, volume climbed higher, up 2.2 percent, but total dollars fell 3.6 percent due to deflation. Household penetration slumped in 2016 as shopping trips fell 2.8 percent. To combat the declines, retailers have to put the shopper in the middle of their game plans, Roerink said.
Changes in the population are driving changes in the industry. Retailers now must cater to five generations. It isn’t just the range in age, but generational gaps around knowledge of meat and home cooking skills that are bringing challenges to the meat case.
Power of Meat 2017 finding: Price per pound has the greatest purchase influence, and price relief is driving increased volume and premiumization.
The Power of Meat tracks the consumer’s “decision tree,” which is made up of six factors ranked in order of importance: price per pound (No. 1, but down in this year’s report), appearance and quality (same), total package price (down), nutrition (same), preparation knowledge (up) and ease and time of preparation (up).
For the older shopper in the most recent survey, value is defined as price-per-pound plus appearance and quality; they also may take nutrition into consideration.
Millennials have a very different definition of value. They place more emphasis on the total package price. They don’t know a lot about quality, but they do care about how the animal was treated. Preparation knowledge also carries more weight with them. They buy what they know how to prepare. Time and ease also has become more important.
“We’re dealing with a completely new value equation, and that’s something that we have to reflect,” Roerink said. “We need to grow with the new world.”
Getting protein back on the plate
Household or plate penetration is at 96 percent, a drop of about a half percentage point vs. the prior year. One reason for the decline likely is competing products. Nielsen found that 39 percent more food items tout the inclusion of protein on their packages than four years ago.
In addition, 76 percent of shoppers said they include meat alternatives at least once each week in their dinner plans. They do it for variety and because they believe the alternative is healthier than meat.
Power of Meat finding: Meat/poultry are slowly returning to the dinner plate, but the quest for variety is driving regular use of protein alternatives.
As far as variety is concerned, it isn’t a matter of supermarkets having too little—a lot of in-store real estate is devoted to meat—but offering what the store audience wants. And what shoppers want can be altered through customer service, education and information.
For example, Millennials are much less likely to try new a meat product (31 percent) or shop at a new meat department (30 percent) than to try a new restaurant (52 percent) or recipe (56 percent), even if it is recommended by someone in their social network.
“We need to build up this world a little bit for them,” Roerink said. “Start with recipes with easy meats and get their cooking skills up to speed. From there on, we could say, ‘hey, if you know how to make this item, did you know that preparing that item is really just the same thing and just as easy?’ And start integrating more meat into their comfort zone.”
Getting store associates to engage with shoppers could help improve the health and wellness perception of meat. Educational tools include the MyMeatUp app and MyMeatUp.org, as well as resources provided by vendors and the various protein boards.
Driving trip frequency
Meat trips hit a high of 32 in 2012 and have now fallen to 27 trips annually. In 2016, meat trips fell 2.8 percent, driven largely by a 2.9 percent drop in meat trips to supermarkets. Millennials make 96 store trips vs. the 119-trip average.
“We have to start building relationships outside the store, and we have to find ways to get Millennials into our stores more frequently,” Roerink said.
Power of Meat finding: The paper circular is losing relevance to in-store and digital/social, but the concept of promotional activity remains crucial.
The location, not the relevance, of promotion is changing. Seventy-seven percent of shoppers look at promotional platforms before they go the store. The weekly circular is still on top as the vehicle of choice, but the numbers decline every year, and now only about 58 percent of shoppers use it. The growth is in digital circulars, store apps, email/websites, social media and smartphone research.
That shift is driven by Millennials, but there are differences among them. The younger ones, 18-26 years old, rely more heavily on digital platforms than their older (25- to 36-year- old) peers.
For a long time to come, the industry will have to stretch promotional dollars across all these platforms, Roerink said. The upside is that digital platforms afford the opportunity to build relationships with shoppers outside the store.
“With so many definitions of value, we need to make sure we’re relevant in our messaging and make sure we’re not driving our own deflation by putting items on sale for
people that don’t really care about that,” Roerink said. “We need to make sure we leverage all the right vehicles, and we need to make sure we do so beyond just the price message.”
Make sure meat is in their basket
Supermarkets are still the main destination for meat purchases, but the momentum is with alternative channels like club and organic stores, as well as butchers, farmers markets (there are now 9,200 of them) and online retailers.
Power of Meat finding: Thoughtful curation of the meat case tailored to shopper needs, trends and innovation can drive incremental sales.
Supermarkets shoppers who switch outlets tend to go to clubs, butcher shops and specialty/organic stores because they believe they have better product quality, lower prices in general, better selection and better service.
“Supermarkets have always had the highest ratings in quality and variety until this year,” Roerink said. “It was actually butcher shops and specialty/organic stores that took the highest credit in the quality and specialty attributes.”
To illustrate the impact of direct-to-consumer sales, Roerink shared two videos. The first was entitled “My Monthly Meat Haul,” in which a young woman showed off what she had purchased at a farm—ground pork, ground beef, pork butts, steak tips, bacon and sweet and spicy sausage. The video had more than 10,000 clicks.
“This is the power of social media that these alternative channels are leveraging, and we need to get in on that,” Roerink said.
The second video was about a drive-thru meat market called Zaycon Fresh. People sign up online and once there are enough customers to warrant a sale, an “event” is scheduled. The meat comes in 40-pound cases. The sale takes place in a local parking lot and it only takes two minutes to get through the line. Zaycon Fresh is available in 1,200 cities and has served a half-million customers.
Power of Meat finding: Trip trends and the growing popularity of alternative channels emphasize the importance of shopper relevance.
“Competition does not play fair, and if we want to make sure that people come to our stores, we need to make sure that we’re better than that, that we offer an experience that can truly help shoppers avoid these different types of channels because they’re finding in our stores what they need,” she said.
“Are you talking about the safeness of our supply chain? Are you actively going after conversion of your shoppers for your brands and for your stores and making sure that you are the meat destination because your curated assortment really matches the shoppers that are in your store?” Roerink said.
It boils down to getting the basics right: cleanliness, variety, quality and customer service. It also helps to be known for something. That might be a very upscale offering or handmade sausages, for example.
Driving up the basket size
Sixty-eight percent of shoppers bought the same kind and same amount of meat in 2016 vs. 2015; 18 percent bought the same kind, but a little more; and 14 percent purchased more premium cuts and kinds of meat.
Power of Meat finding: Brands are one of the strongest stories in both fresh and processed meat/poultry, particularly among Millennials.
One way to do that is with brands. Millennials attach themselves to certain brands that provide the eating experience that they’re looking for through innovation, through consistency and through clear communication. Four in 10 Millennials were looking for “something different.”
There is nearly equal shopper interest in national brands, smaller labels and private brands.
“That provides retailers with an excellent opportunity to create a story that is unique to you and to really differentiate based on brands,” she said. “Think about it as the candy aisle. We have to have Mars and Hershey, but if we were to only have those two big brands, why would they come to your store? We need to make sure we shake it up.”
Power of Meat finding: Consumers are looking for the story of meat, and special attributes are seeing growing shopper uptake and sales.
Another big growth area is special attributes, also driven by younger shoppers. Sales of meat products with a production claim like free-range, antibiotic-free and grass-fed were up 7 percent in dollars and 9 percent in volume in 2016. Items with no claim grew 2 percent in volume, but dropped 4 percent in dollars.
She suggested integrated these marketing claims based on the store audience. Survey respondents were asked if they were interested in their primary meat department adding more of these items. Four in 10 said yes, and they were specifically interested in what the animal eats and how it is raised.
Twenty-six percent of retailers who are offering antibiotic-free products saw “great” success with these types of attributes, and 50 percent saw “some success.”
For the first time since the study began, more people said they had purchased natural and organic meat products than said they had not. “Free-from” continues to be the biggest reason to buy natural and organic, but animal welfare is becoming more important as well, again, driven by younger shoppers.
Power of Meat finding: Convenience meat/poultry is poised for growth, but it’s important to actively address quality and freshness perceptions.
The value-added segment is poised for growth, Roerink said. And for consumers who value time more than money, the price differential is not important. The main reason people don’t purchase value-added products is because they doubt their quality. Some of the comments in the report on this topic were “downright nasty,” she said.
“There are people saying, ‘oh, that’s just yesterday’s meat that they didn’t sell’ or ‘it’s a horrible quality of meat that they cover up in breading so you can’t see it.’ That’s what consumers believe,” she said.
Retailers and brands should aim to drive transparency and informed choice, tell the story of the special-attribute items and give them the chance to try them.
Power of Meat finding: Selling meat as part of a total meal solution prompts interest for everyday and seasonal meal occasions.
One of the problems with meat is that it isn’t the most “inspirational” product in the store, Roerink said. One idea to combat that is to group all the makings of a meal together with the meat. Cross-merchandising can help drive basket growth. Think about vegetable kits, wine or grilling supplies. Don’t sell meat as just meat; sell it as a meal.
There is always a spike in turkey sales around Thanksgiving, and leg of lamb around Easter. Roerink suggested looking for extra seasons. She said to look to the candy industry as an example. It has four big holidays: Valentine’s Day, Easter, Halloween and Christmas. To overcome the lag time between Easter and Halloween, the industry created a fifth season by putting in drop displays featuring marshmallows, graham crackers and chocolate.
“The question for you is what is your fifth season?” Roerink said. “There are many, many seasons to go after, and they might be secondary holidays that are really owned by the restaurant industry right now.”
Operational execution is crucial
Getting the basics right drives customer satisfaction. At the beginning of the day, stores tend to be cleaner, better stocked and offer better service. The shoppers that come in at 7 p.m.—the Millennials—tend to find less-than-optimal conditions at the meat counter, and they aren’t as satisfied as other shoppers. They need people in the store who can answer questions. Shoppers were asked how supermarkets could be the best in customer service. The No. 1 answer was by offering in-store, in-person expert advice. Supermarkets can solve problems for shoppers, and that will build loyalty.
In the retailer survey, 76 percent said they are allocating more labor to the sales floor, but 89 percent said that finding and keeping good people is a problem.
Power of Meat finding: Improved shopper outreach can help foster high levels of satisfaction and drive spending and loyalty.
Roerink suggested using signs in the store to tell shoppers that special requests and orders are welcome, that an associate will open a package for them or help figure out what to serve for dinner.
One of the biggest detractors from satisfaction was out-of-stocks. In the survey, retailers were asked whether they would be willing to be better stocked at the risk of shrink; 70 percent said they “absolutely” would.
“The thing about tomorrow—and really, today—is that the market is vastly different,” Roerink said. “Our market conditions are changing, our shoppers are changing, our competition is changing. If we want to win in 2017 and beyond, we have to understand all those changes and start making changes in our own meat department.”