Evolving consumer buying habits and the growth of private label are changing the face of the meat case.
By Craig Levitt
Value. In the current economic climate, that, more than anything else, is what consumers are looking for when they visit the supermarket today. When shopping the meat case value can come in a multitude of ways.
For some it means finding the most inexpensive cuts available. For others it means paying for the assurance that the cut you are buying is of a specific quality. Some consumers don’t have an exact definition but they know it when they see it. Ultimately it is up to retailers to figure out what the proper value/price equation is and provide that to their customers. That includes figuring out the place for both private label and nationally branded products. As private label becomes a more trusted source for consumers that line can get a tad blurry.
According to The Power of Meat 2010: An In-Depth Look at Meat Through the Shoppers’ Eyes published jointly by the American Meat Institute and the Food Marketing Institute, 74% of consumers surveyed have no preference based on brand when purchasing fresh meat or poultry, up from 72% in 2007. The remaining 26% is split evenly between national brand and private label/store brand. Industry observers say that the continued decline in brand preference is likely more attributable to shopper’s greater interest in finding the best value, as opposed to an increased preference in private label.
Observers further believe that retailers may be taking advantage of information provided by the Power of Meat report suggesting that consumer spending at the meat case is not greatly influenced by either branded or private label items as store brand case presence continues to grow. According to the 2010 National Meat Case Study—funded by Sealed Air’s Cryovac brand, The Beef Checkoff Program and the National Pork Board—which includes information from 124 retail supermarkets and nine club stores in 51 metro markets across 31 states, the percentage of store brand packages available in the meat case has tripled from 12% in 2004 to 36% in 2010. During the same time period supplier brands are down 13% while “no brand” packaging is down 11%.
Specifically, store brand beef increased from 31% in 2007 to 51% in 2010 while store brand ground beef increased from 21% in 2007 to 37% in 2010.
Rise of private label
”We are starting to see consumers have more of an acceptance for private label,” says Shelley Bradway, marketing manager for the National Cattleman’s Beef Association, based in Centennial, Colo. “[Private label] really offers more options for shoppers while providing the ability to build loyalty for retailers. So it just makes it so there are more price options when shopping the meat aisle.”
Since 2007, store brand growth has been seen across the other proteins as well. For example, pork grew from 19% to 26% and chicken increased from 26% to 35%.
“Private label is not what it was years ago,” says Marty Carpenter, senior director, U.S. market development for Calgary, Alberta-based Beef Information Centre (BIC). “It has progressed to the point where in many cases it is just as good if not better than the national brands. It has really become credible, especially in consumers’ eyes.”
BIC now offers a private label Angus select program called High River Angus that Carpenter says meets the basic tenants of a brand yet isn’t at the high-end of the financial or quality spectrum. What it does do, says Carpenter, is provide the consistency in quality and price that consumers are seeking.
“Given the challenges consumers face now with the economy the way it is, they are still looking for that value proposition, yet looking for something that can fit their budget as well,” says Carpenter. “The realization of what a brand can provide a consumer is there, and a consumer is willing to invest in a brand, but they only have so much money to invest. So understanding how new brands can come on to the market and meet those niches further down the economic pipeline is important.”
Of course there are certain segments within the meat case that are better suited for national brands. One is natural and organic products. Reason being, say observers, consumers buying natural and organic products are generally much more conscious of where their meat is coming from, making branded options a bit more trustworthy.
Meyers Natural Foods has both ends of the spectrum covered, providing retailers with fully supported branded and private label natural beef programs. On the private label side, the Loveland, Colo.-based company has the ability to co-brand with retailers who want the benefits of a national program but would rather live under a store banner. According to Chris Boudinet, president of Meyer Natural Foods, each retailer has a unique need and Meyer has the flexibility to provide customized solutions.
Meyer’s branded products include Laura’s Lean Beef and Meyer Natural Angus, with each meeting a unique consumer segment while helping retailers attract loyal beef consumers to the meat case, according to Boudinet.
Striking a balance
“While private label programs are one path a retailer may choose, Meyer’s has seen great growth with its national branded programs as well,” says Boudinet. “We expect our Laura’s and Meyer Natural Angus brands to continue to grow due to their proven product quality, a loyal consumer following and the marketing efficiencies it provides retailers.”
Another trend within the meat case is the growing propensity of consumers treating themselves to higher-end, premium cuts. Brent Eichar, senior vice president for Certified Angus Beef (CAB) LLC, based in Wooster, Ohio, says many retailers have taken notice of this and are moving towards carrying more premium cuts. He says that even in these economically challenging times CAB has had success with its Prime Natural line—the most elite premium beef CAB offers—with three of their retail chains recently launching the line.
“Several national chains have recently approached us about moving from their private label program to the Certified Angus Beef brand,” says Eichar.
“In fact our brands retail sales this fiscal year are up 70 million pounds, averaging 19% growth across all divisions. And our top 10 fastest growing chains are up 41%.”
As the economy turns around and gets stronger David MacVane, director of business development for CAB, expects an even greater percentage of growth in the higher-end and middle meat cuts.