Successful Case-Ready Programs From Abroad Show What's Possible
by Bryan Salvage, editor
When it comes to successful case-ready programs for fresh meat, other countries are miles ahead of the United States, according to case-ready veterans.
Certain foreign case-ready programs can serve as bench marks for American packers considering-or already involved in-case-ready meats.
Great Britain's Tesco
Of all the case-ready success stories, it appears that the Tesco supermarket initiative in Great Britain is currently drawing the most global interest.
That's no surprise. The chain owns an estimated 15 percent market share of retail meats sold in Great Britain. This translates into hundreds of tons of beef, pork, lamb-and some veal-sold on a weekly basis under the Tesco brand name in about 400 supermarkets.
Several years ago, Tesco executives decided that by the end of 1996, 100 percent of the meats they sold would be in case-ready packages.
This move will eliminate all meatcutting areas from their supermarkets, and Tesco executives felt it would ensure that tender, high-quality meat would be available on a consistent basis. Precise specifications on quality, fat, color and weight were drawn up for suppliers.
In laying the groundwork to reach its goal, Tesco entered into partnerships with a small number of suppliers. The largest company supplying meat is St. Merryn Meat Ltd., which built a new production facility to support the project.
Tesco has been so successful that it is more than a full year ahead of its case-ready schedule. All but 30 of Tesco's stores, mainly in the outlying regions of Great Britain, will be totally converted to case-ready meat by the end of May, according to the managing director of one European-based company that is the sole distributor of the Ross Inpack pre-formed tray sealing machines used by St. Merryn.
"They use a barrier pre-formed tray," the managing director says of the Tesco project. "Each tray is gas flushed, sealed and put into special Tesco containers. They are shipped to a Tesco central warehouse and then trucked to individual stores."
Everything-including weight and price stamping-is done at the meat processing plant, which agrees on pricing with Tesco each week. Upon arrival at a Tesco store, product is placed in the meat case with a shelf life of five to nine days, depending on the product.
"This program has been successful for Tesco, our company and meat suppliers," the managing director notes. "It has brought consistency into the presentation and packaging. You're guaranteed that when meat is centrally prepared, each package is individually gas flushed [high oxygen] and sealed. It will have the same consistency day in and day out."
Companies worldwide are venturing to Great Britain to see what Tesco has done in case-ready meat. Will other retailers in Europe follow suit?
"Absolutely," the managing director insists.
Nutryte riding high in Argentina
Founded at the beginning of the 20th century, the Comega Group is one of Argentina's leading agricultural and livestock companies. It is a leader in bovine genetics and a pioneer in case-ready beef for Argentinean consumers.
Frustrated by the inability to receive full value for its genetically superior cattle, the Comega Group extended its expertise into the agri-industrial field by creating a packing company, Nutryte (Nutrici-n y Technologia S.A.), in 1986.
Soon thereafter, Nutryte introduced its Caba-a Las Lilas brand of case-ready beef to the Argentinean retail market.
"In 1986, branded, vacuum-packaged, deboned [case-ready] beef was a new idea in Argentina," points out Victor Tonelli, president of Nutryte.
Nutryte controls product quality from genetics through processing and packaging. In the early stages of product development, Nutryte consulted with Excel Corp.-a pioneer in vacuum-packaged meats.
Gaining acceptance of its case-ready product was a challenge since many supermarkets in Argentina raise their own cattle and sell their own branded beef products.
Nutryte began selling its new product exclusively through Carrefour, a French supermarket chain, in July 1986. Eighteen months later, Nutryte convinced Argentina's two most important supermarkets (Jumbo and Norte) to carry its product. Today, Nutryte reports it has an 85 percent share of the branded beef market in Argentina.
Argentineans are willing to pay a higher price for branded, vacuum-packaged beef because Nutryte has spent much time and money educating supermarket marketing managers and consumers on why vacuum-packaged meat is not a pink/red color, Tonelli says.
A Nutryte employee visits a store to discuss the product with the supermarket manager and consumers after it is introduced.
"We have done this 365 days a year for the last nine years, and it will continue," Tonelli says. "The in-store product sampling demonstration is our most important marketing strategy. Eighty percent to 90 percent of our marketing cost is targeted to in-store sampling and communication."
Canadian movement
"In general, case-ready meat in Canada is a growing market," says Clinton McCrank, marketing and business development manager for Cargill Foods Toronto.
Canadian retailers are showing interest, he adds, because of:
-- High-volume, low-cost U.S. retailers, such as Costco, Price Club and Wal-Mart, entering Canada.
-- High costs of skilled labor in Canadian cities and the unavailability of skilled labor in rural areas.
-- The more consistent quality of case-ready meat as compared to multi-unit retail operations.
Cargill Foods' Canadian meat division has produced case-ready meat for supermarkets, mainly in Ontario, for more than two years. It offers a complete line of case-ready beef, pork, poultry, ground meat and fresh sausage products in either a pre-priced or non-priced format.
"All products are packaged with an overwrap film in trays," McCrank says. "They are identical to conventional in-store production. In addition, beef has MAP [modified atmosphere packaging] to protect the color. We do not vacuum package.
"Most major retailers are participating in one form or another of case-ready, ranging from 20 percent to 100 percent of the [meat case]," he adds. "Our program has shown significant growth in the past two years. However, as an industry, it's still in its infancy and has yet to show its total potential."
Lucerne Foods, a division of Safeway Canada, had been supplying a line of case-ready beef products to Safeway Canada supermarkets on a test basis for nearly two years.
Although Lucerne executives did not respond to inquiries from Meat Marketing & Technology about their program's progress, the company is breaking out of the test mode and into fully commercializing its case-ready program, according to one source.
"[Lucerne] looked at the previous case-ready beef program that Kroger was running," the source notes. "It was purple meat and it was a failure. Lucerne is putting its case-ready beef products in peelable, laminated packages. When it arrives at the store, it's purple because it's in an oxygen-free environment.
"At the store level, retailers peel the oxygen barrier off and in about 15 to 30 minutes the meat blooms in the package," he adds.
Toronto-based Maple Leaf Meats currently offers fresh poultry and a line of fresh pork sausages-ranging from breakfast sausage to hot Italian sausage-in a case-ready format utilizing modified atmosphere packaging (low oxygen and high carbon dioxide).
The company was one of the first Canadian packers to develop case-ready pork and beef programs, but it has ceased the operation.
It was difficult for the company to achieve efficiencies because of required line changes and adhering to a variety of cutting specifications, says Paul Gittins, Maple Leaf Meats manager of marketing and product development.
"We learned there are certain fresh meat items that are ideally suited to central manufacturing in case-ready, such as sausages and ground beef," he notes. "We decided to concentrate on fresh pork sausage."
Will case-ready meat continue to grow in Canada?
"It's definitely the trend for the future," Gittins says.