A revenue opportunity, but an operational challenge

Solid shopper demand for meat and poultry is providing private brand retailers with greater revenue opportunities — and operational challenges.

Grocers are in position to boost store brand activity by offering proteins with unique flavors, textures, portion sizes and health attributes. Yet, hampering efforts is limited meat case space and a large base of shoppers that remain loyal to national brands.

“Finding the balance between national and store brands isn’t easy when space is so hotly contested between different cuts, kinds and brands of meat and poultry,” says Anne-Marie Roerink, principal of 210 Analytics LLC, a San Antonio-based market research and marketing strategies firm and preparer of the “Power of Meat 2019” report. “Add plant-based items to the mix, and space becomes even more at a premium.”

Research for the “Power of Meat 2019” found that 64% of Generation Z meat buyers have a brand preference, as do 60% of young millennials, 57% of older millennials, 46% of Generation Xers and 42% of baby boomers. The “Power of Meat 2019” is published by the Arlington, Va.-based Food Marketing Institute, and the Washington D.C.-based Foundation for Meat and Poultry Research and Education.

“If consumers already have emotional connections with national or regional brands, it’s hard and not beneficial to change those attitudes” Roerink says. “Meat is less and less about the cheap, unbranded commodity and increasingly about immediate consumer recognition that translates into perceived quality and eating experience. It’s important to provide a different offering rather than a me-too product.”

Indeed, unlike the center store where private brands are often a lower-cost alternative, meat department operators should differentiate store brands with distinctive options and offer selections that target each location’s specific customer base, Roerink states.

“Private brands provide a chance to showcase a local supplier, regional flavor, the butcher’s favorite or simply something different,” she notes. “The biggest opportunity is to tie the private brands in meat to store brands in produce and the rest of the store. While national brands have very strong positioning and emotional connections, private brands provide an opportunity to drive store loyalty, story tell and innovate on flavors.”

CREATIVE MARKETING IS A MUST
Newer merchandising initiatives also can help spark store brand activity, says Jason Jerome, senior director of retail and foodservice engagement at the Centennial, Colo.-based National Cattlemen’s Beef Association (NCBA).

Some retailers, for instance, are taking cuts “that have been around for ages,” such as strip steak and cutting it into a strip filet, also known as a Manhattan cut, “which gives new life and variety into a very common cut,” he states.

Educating shoppers on private brand options also is crucial, Jerome says, noting that “private label has exploded over the last decade with more and more retailers offering different variations of beef.” 

“The consumer needs to know what sets the private label beef apart from the beef they have been buying for years,” he states. “Offering signage that explains the differences is very important. Multiple facings in the self-service case also can help drive customers to select those products over the conventional items on shelves.”

Offering multiple store brand beef choices, however, can cause consumer confusion, Jerome notes, adding that retailers should educate staffers on the various options so they can accurately explain the products to shoppers.

Retailers seeking to boost store brand sales also need to emphasize the wellness aspects of the proteins while overcoming the perception of many shoppers that meats are less healthy than other meal alternatives, analysts note.

Nearly 20% of red meat consumers, for instance, report lower consumption versus the previous year with more than half stating that red meat is too unhealthy for regular use, reports market researcher Mintel in its “March 2019 Packaged Red Meat US” report.

Yet, in a protein-centric landscape, “brands can celebrate the nutrition, satiety and taste virtues of red meats, but should steer clear of the pretense of all-around health to help engage more frequent consumption,” Mintel notes.

More consumers, meanwhile, are cutting back than are increasing consumption of red meat, Mintel states. Twenty-three percent of persons between ages 55 and 64, for instance, reported eating red meat less often over the past year while just 6% ate more, Mintel found in a January 2019 online survey of 1,860 adults who had consumed red meat in the previous six months.

In addition, 28% of individuals 65 and over indicated that they consumed less red meat, while just 1% admitted to an increase.

Among all age groups, 19% noted that they ate red meat less often, while 15% consumed the proteins more frequently.

Yet, Mintel states that consumers who are largely maintaining or increasing consumption “are providing a window of opportunity for brands to make solid and lasting connections.” 

HEALTH IS A HOT TOPIC
While seeking additional protein is the leading purchase driver for those eating more red meat, just 15% of such consumers are following a specific high protein diet, “indicating a more widespread appeal of protein as a nutritional powerhouse,” Mintel notes.

In addition, red meat shoppers are seeking freshness and cleaner ingredient labels, “particularly those that are recognized and proven, such as no additives and preservatives,” Mintel reports, though quality and ethical treatment claims, which may come with an inflated price, garner lower interest.

“Supplementing initiatives that convey a less-processed product from the farm to the retailer with secondary benefits, like protein or even minerals and vitamin content, can help balance some good with a less-than-healthy reputation,” Mintel notes.

Marketing private label meat and poultry in specific portion sizes also will enable retailers to better attract shoppers who are focusing on calories, convenience and wellness, says Maeve Webster, president of Menu Matters, an Arlington, Vt.-based food industry consulting firm.

“Consumers continue to have trouble understanding and identifying proper portion sizes for any ingredients, and this includes meat,” she notes. “Solutions-based innovations that assist consumers are going to continue to grow in importance, including for new and value-added cuts.” 

Packaging, meanwhile, also is a major red meat purchase driver, with consumers showing strong interest in vacuum-sealed packs and individual-sized options that can ensure freshness for households of all sizes, Mintel adds. 

Despite shopper health concerns, Mintel notes that the category “is holding its own. It all boils down to what consumers love about red meat — great taste and satiety."

Richard Mitchell is a contributing writer to Store Brands.