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The retail meat department is facing “a completely new value equation” based on the influence of younger consumers entering the category.
That was just one of the observations noted by Anne-Marie Roerink, principal of San Antonio-based 210 Analytics, in presenting the latest edition of "The Power of Meat," the annual consumer trends analysis of the food retail meat department from Food Marketing Institute and the North American Meat Institute.
Roerink presented this “in-depth look at meat through the shopper’s eyes,” sponsored by Sealed Air’s Food Care Division, Tuesday morning during the closing session of the NAMI/FMI Annual Meat Conference, held this week at the Hilton Anatole in Dallas.
After years of increasing prices in a volume-challenged marketplace, the study notes, deflation is profoundly changing the meat purchase yet again, with price relief driving a greater willingness for experimentation and premium product purchases among consumers.
In its 12th year, the study demonstrates how thoughtful curation of the meat case, tailored to shopper needs, trends and innovation, can influence incremental sales and provide the industry with opportunities to foster high levels of satisfaction and drive spending and loyalty.
Among its findings: Selling meat as part of a total meal solution in ready-to-prepare meal kits draws consumer interest and has the potential to yield increased sales. Meanwhile, Millennial consumers want more guidance on what cuts to buy and how to prepare them in interesting, flavorful ways.
“Make sure the recipes are hip and in tune with what Millennials are looking for,” Roerink advised.
FMI VP of Fresh Foods Rick Stein stressed, “It is important for food retailers to help their customers shop smarter, and no department is better positioned to do this in 2017 than the meat department. The research shows how consumers clearly understand the nutritional and flavor benefits of protein and are eating more proteins in various forms, with overall volume up.”
The study emphasizes how food retailers and suppliers should continue to help tell a story about the meat purchase, paying particular attention to the product’s attributes, including ingredient and production practices. These stories also translate to in-store execution of promotions, and digital, mobile and social media promotions.
“It is clear that consumers are seeking more information and transparency about their meat and poultry products, and the industry is hearing that message,” said NAMI President and CEO Barry Carpenter. “From our 'Glass Walls' videos showing how animals are handled in our plants to the new MyMeatUp app, which includes a full guide to beef, pork, lamb and veal cuts available at retail, consumers have more resources at their fingertips to help them purchase the meat and poultry products they seek.”
In addition, value-added meat and poultry saw robust volume increases, though Roerink noted that many consumers perceive the quality of such products to be lower, believing, for example, that older cuts are seasoned to move them out. Better communication by retailers about the grade, handling practices, prices and convenience of these products may help accelerate further growth, the study indicates.
While 62 percent of consumers still choose the supermarket to make a meat and poultry purchase, alternative channels are garnering momentum. In particular, among the 24 percent of shoppers who switch from traditional channels, consumers increasingly choose butcher stores (77 percent); farmers' markets (7 percent); and specialty/organic (8 percent).
Notably, for the first time in 12 years, shoppers who have bought natural/organic (48 percent) exceeded those who haven't (41 percent) – just a decade ago, that gap was 50 percentage points.
Meat Consumer Segmentation
A study by Chicago-based Midan Marketing identified six consumer segments with unique needs and demands from the meat department, each presenting different opportunities for retailers and suppliers.
“Voracious Carnivores” are confirmed meat eaters, predominantly Boomers and seniors, who have set shopping routines. Midan principals Danette Amstein and Michael Uetz advised a “maintain and defend” strategy to keep these consumers satisfied. They suggested a similar tack for “Wavering Budgeteers," who are a bit more selective and have an interest in sustainable agriculture.
Meanwhile, the Midan team advises a “meet needs and sell more” approach toward “Selective Foodies,” who are brand loyal and value quality over price; and ‘Aging Idealists,” who prize free-from products with eco-friendly pedigrees.
And the industry should “cultivate with innovation” the groups of “Premium Players,” who are into healthy eating and ethnic flavors, and are open to non-meat proteins, and “Urban Eclectics,” predominantly Millennials, who favor name brands and convenience but lack the cooking skills of older groups.
It’s these younger consumers that are driving the growth of organic and antibiotic-free meats that are the inevitable future of the industry, according to Larry Levin and Steve Ramsey, of Chicago-based IRI, who laid out their case in one of Tuesday’s concurrent workshops.
Ramsey disagreed with earlier conference speakers who argued that organics are a niche. “You need to move your business in line with this long-term trend,” he advised. “It’s more costly for the supply chain and the consumer, but it’s a trend that continues to have some legs.”
The IRI team presented data indicating that consumers purchasing organic and antibiotic-free meats generate significantly higher overall basket rings than buyers of conventional products. Additionally, the top retailers of organic and antibiotic-free products grew their overall fresh meat sales faster than other retailers did, and likewise grew their other perimeter categories faster as well, such as deli and fresh prepared.
“Chicken is leading the way” in antibiotic-free, Ramsey noted, “but the others will follow.”