A Valuable Category

According to Chris DuBois, principal with the protein practice of Chicago-based Information Resources Inc. (IRI), value-added meat is an “untold growth story in the meat case.” IRI’s data show that dollar sales of value-added meat have grown faster than all other meat in the last five years. For example, in 2014, sales of value-added meat grew 7.9 percent, while those for all other meat grew 5.6 percent.

Additionally, IRI is seeing incredible dollar sales growth for value-added meat in large markets. For example, during 2014, sales of value-added meat grew 20 percent (and 16.3 percent in pounds of meat sold) in Chicago, while in Los Angeles, dollar sales grew 16.2 percent (and 9.5 percent in pounds of meat sold).

But value-added meat isn’t just great on its own; it’s great for the meat department as a whole as well.

“[Value-added meat] can add a nice halo to the meat department,” DuBois states. “It can drive total sales for the whole meat department.”

When IRI measured value-added meat sales among retailers, it divided the retailers into quartiles. Retailers in the top quartile averaged $1.5 million more in annual sales from value-added meat than bottom-quartile retailers. Top-quartile retailers also grew total meat sales by 13.6 percent. Bottom quartile-performers, meanwhile, lost 3.5 percent in total meat sales, DuBois added. Retailers have a great opportunity to capitalize on the growth within the category with private brand options. To attract consumers’ attention, they will need to offer innovative flavors and informational and convenient packaging options while also keeping consumers informed through educational merchandising strategies.

Go beyond the basics

“Flavor innovation remains at the forefront of manufacturers’ strategy when launching processed meat, poultry and fish,” states global market research firm Mintel in its November 2014 report titled “Category Insight: Meat, Poultry and Fish.”

In particular, consumers seem to be interested in flavors that they cannot easily replicate at home or that emulate flavors they found in a restaurant, Mintel adds. It gives the examples of Bumble Bee Tilapia Fillets, which are marinated in a curry sauce, and Safeway’s Marcela Valladolid Ready to Heat Pork Carnitas.

“We are seeing a lot of experimentation now that [is] above and beyond the five to seven basic flavors, especially in pork and beef,” DuBois says. “Retailers that are really successful are tapped into their local customer needs and [are] customizing [value-added meat flavors] based on their local market knowledge.”

Asada, for example, is one flavor that has “taken over” in the last two to three years, DuBois adds. Asada rose from being “almost a fringe flavor” to being “one of the top flavors across the United States.” Similarly, many other Southwest flavors are becoming popular in the Northeast and upper Midwest.

With the rise of foodies, ethnic foods and flavor profiles are becoming more popular as well. For example, Aliya’s Foods Ltd., Edmonton, Alberta, has seen a rise in the popularity of Indian foods.

“People are more focused on flavors and spices; we’re finding that both Americans and Canadians are enjoying [spicier food],” says Hafiz Jiwani, director of sales, Aliya’s Foods.

Use packaging wisely

When it comes to packaging store brand value-added meat, retailers should ask themselves: “Is the packaging a means to hold product or a means to hold and sell product?” says Brett Black, chief operating officer, Devault Foods, Devault, Pa.

“There is a big difference,” he adds. “Serious sales and purchase considerations [by consumers] will continue to focus on the size of the package, servings per package, the nutritional information as it relates to product content, package reuse, and how both manufacturers and retailers view environmental considerations.”

And the way that consumers perceive the value of the packaging should be of key concern to retailers and manufacturers, Black says. Additional questions retailers should ask of their product packaging include: Does it deliver freshness? Does it provide preparation convenience? And does it reflect some degree of environmental responsibility?

Besides acting as the vehicle to deliver the product, value-added meat packaging is also an important tool for delivering information to consumers.

Consumer concerns regarding the amount of processing involved in value-added meats has led some companies to promote the simplicity of their formulations on the front of the package, Mintel states. The company gives the example of Target Corp.’s Archer Farms Savor Everyday Italian-Style Natural Ground Beef. The packaging includes claims stating that the fully cooked beef is minimally processed and contains no artificial ingredients. Another example Mintel offers is of The Kroger Co.’s Simple Truth Top Round Roast Beef. The packaging claims that the fully cooked roast beef is 95 percent fat-free and comes from animals fed a 100 percent vegetarian, grain-based diet that have never received antibiotics.

Millennials, in particular, are most likely to want to know what is in their food, Jiwani states. They are reading packaging labels and claims and want the truth from manufacturers and accurate information that is easily accessible.

But consumers are also looking for specific certifications for value-added meats. In particular, they are asking for halal certification, he contends. And retailers are starting to notice. At trade shows, Jiwani says that one of the most frequent questions he is asked is: “Are you halal certified?”

“Islam is one of the fastest growing religions in the United States,” he adds. “By not having halal certification, you’re cutting off a whole group of people that could be interested in buying your product.”

Influence the consumer

According to IRI’s research, two-thirds of consumers’ weekly purchase of meat is “up in the air,” DuBois says. This means that the consumer is easily influenced based on price, assortment, etc. Retailers that seem to be succeeding in the value-added meat category are “doing a fabulous job on signage” to help draw attention to the category. For example, these retailers are using overhead signage, signage on cases and even signage within the cases to draw attention to the product and communicate the ease of preparation, the time-saving benefits and the great taste.

However, not all retailers are interested in “cluttering up the store with sales materials,” Black states. Instead, retailers could use digital technology and its extensions such as smartphones, the Internet and social media to communicate in-store with customers in meaningful ways and even to get their attention before they arrive at the store.

“In-store commercials are very successful,” Black adds. “In-store radio messaging is also very successful.”