by Bryan Salvage, editor
During the past several years, whenever the phrase "opportunities for the red meat industry" popped up, it was usually made in reference to export opportunities.
Industry has certainly made great strides in increasing its exports, and yes, predictions for future export successes are positive. The U.S. Meat Export Federation projects total exports for pork and variety meats in 1995 to be 249,161 metric tons-and 454,940 metric tons in 2001. Total exports of beef, veal and variety meats in 1995 are projected to be 3,264,738 metric tons-and will grow to 5.8 million metric tons in 2001.
Although exports show great promise, there is another major opportunity for increased sales domestically. The U.S. red meat and supermarket industries should join forces and maximize grocery store meat case sales potential by embracing category management.
While attending a session during the recent AMI convention, Joe Leathers, director of retail marketing/new product development for the National Pork Producers Council, discussed the importance of adopting category management. There are many components to this strategy. But in short, manufacturers and retailers must begin to look at categories and brands as strategy business units. Packers and processors must shift their focus from volume to profitable volume.
"First, we're going to have to find out what is going on [at the meat case] and that's coupled with [utilizing] value-based meat management," Leathers said. "We have to measure performance on category profitability and assets returned. Industry isn't used to this [concept]."
Industry also needs to focus on well-planned strategies vs. reactionary tactics.
"We're going to have to become better planners and thinkers and have a better vision for this industry [if] we want it to grow," he noted.
In discussing NPPC's views, Leathers said: "The foundation of category management [should include] a careful analysis of consumer behaviors translated into specific merchandising and case-setting recommendations."
Redefining the meat case
"It's time for us to get a better grasp on what's going on [at the retail level in the fresh meat cases] and better control our categories," Leathers pointed out.
"What's a [fresh meat] category? It's 62 feet of dead meat in a white tray that the consumer has no idea what to do with," he stressed. "We have poultry, beef, pork, lamb and veal fresh meat departments-those are our categories.
"We have to redefine the meat case and make it look different," he added. "Maybe arrange it by cooking technique, product shape, meal occasion or by holidays. The whole idea of selling and marketing is getting the consumer excited, getting people pumped."
In looking at operating profit for the top five food chains, Leathers pointed out the margins are only between 1.8 percent and 3 percent.
"We have to raise that," he added. "How do we accomplish this? By better understanding our costs [through the use of emerging scanning and other in-store technologies]."
Leathers told the audience that the days of "hunking, chunking and throwing the meat into a case and hoping it will sell" are gone.
"We have to start setting up our meat case by using Plan-O-Grams, store-specific research that identifies shopper demographics, product needs and wants. When a consumer walks in, we will know what he or she wants."
I strongly agree with Leathers that category management will become the way of selling meat in the late 1990s and beyond. But first, the meat industry must change in order to embrace it.
Now is the time to start.