Born Free
by Ken Krizner, senior editor
Meat processors will likely remember 1995 as the year they rediscovered the word "free"-as in "fat free."
The number of red meat product introductions in 1995 is expected to reach 168. Through the first 40 weeks of the year, there were 132 new product introductions, more than were introduced in 1993 and nearly as many as were introduced in 1992. (See chart below.)
"It is going to be a very good year for red meat," notes Tom Vierhile, general manager of Naples, N.Y.-based Marketing Intelligence Service. "The numbers should show it is the biggest year for product introductions since 1991 [when there were 175 new product introductions]."
Marketing Intelligence Service tracks new product introduction across the food industry. Marketing Intelligence supplies information to Meat Marketing & Technology for its "What's New in Review" page.
And after a period of sluggish growth, new meat items featuring "low fat" and "fat free" claims have made a comeback this year," Vierhile points out.
Nearly half of new products introduced this year contained one of the three fat claims, compared with 12.3 percent in 1994. Vierhile says that reduced fat claims peaked in 1992, then saw a sharp decline in 1993 and last year.
He believes the advent of the Nutrition Labeling and Education Act (mandating nutrition labels on food products) is the reason why products with reduced fat claims have made a comeback. Labels became mandatory for meat and poultry products last year.
"Processors laid off reduced fat claims in the early 1990s because they wanted to see how nutrition labeling would shake out and they did not want to jump the gun," Vierhile says. "But now that there are clear definitions for these claims, companies have jumped back on the bandwagon."
One executive for a processor producing fat-free products agrees that nutrition labeling has played a role, but not with the industry.
"Consumers are more comfortable with nutrition labeling," stresses Margaret Riley, vice president of marketing for Detroit-based Hygrade Food Products Inc.
The company's Ball Park Fat Free Classic frank debuted in April. "Consumers now feel a tremendous amount of confidence that they understand what the nutrition aspect of each product is because there is consistency in the way that nutritional information is communicated," Riley notes. "It is an opportunity for us to take advantage of that situation."
Leader of the 'Free' pack
Leading the fat-free bandwagon is Oscar Mayer Foods Corp., whose Free line of hot dogs and bologna-0 grams of fat and saturated fat-has become the industry measuring stick. The line was introduced in February, and was soon followed by the Hygrade fat-free franks, as well as fat-free franks from Swift-Eckrich Inc.
"Until 1995, there were no fat-free meats," Vierhile says. "But the big launch from Oscar Mayer changed that. Companies immediately began coming out with competing fat-free products."
Consumers seem to be coming back for more.
Oscar Mayer estimates that its Free line will exceed retail sales of $100 million by the end of 1995. The company has spent between $10 million and $15 million on advertisements.
"It has exceeded expectations for us," stresses Steve Shanesy, vice president of marketing for the Madison, Wis.-based processor.
Independent research by Marketing Intelligence supports Oscar Mayer's claims.
In a taste test with a consumer panel comprised of head-of-household women, Oscar Mayer Free hot dogs, composed of beef and turkey, scored A-, which Vierhile described as "outstanding."
Products are written up by Marketing Intelligence and submitted, along with an accompanying photograph, to AcuPoll Research of Cincinnati. Using a 10-point scale, the consumer panel rates the product based on purchase probability, how new and different the product is, and how the price fares against the competition. The total points are then converted into a letter grade.
"The taste test is a good indication that there is a market for fat-free hot dogs," Vierhile points out.
Shanesy says: "The response from consumers has been excellent."
So enthralled with the line, Oscar Mayer recently unveiled fat-free ham with 40 calories in a one-serving size (three slices). "Fat-free ham is a natural extension for us," Shanesy advises.
A fat-free ham could prove to be a financial boon for Oscar Mayer or any other company that can produce it. Ham has been the No. 1 sandwich meat consumed at home during the past 15 years, according to National Eating Trends, a group that tracks consumers' eating habits. Last year, consumers ate more than 210 million pounds of pre-packaged ham.
"I would anticipate that anybody who is anybody in the industry will soon come up with its own fat-free line," Vierhile stresses. "Oscar Mayer is setting that trend."
Two companies have already lined up. Hygrade's Ball Park Fat Free Classic, which features basketball superstar Michael Jordan in advertisements, is a refrigerated vacuum packed product. The frank contains 40 calories, 150 milligrams of cholesterol and 560 milligrams of sodium.
While not revealing specific figures, Riley says sales of the franks have "exceeded expectations," which were 4 percent to 5 percent of Hygrade's core volume business.
"The consumer's nutritional concern over the past few years has focused on fat," she notes. "This product gives [Hygrade] an opportunity to tap into this market."
Eckrich's Fat Free Franks, which debuted in September, are made "with turkey, pork, beef-natural smoke flavoring added," according to the label. The 14-ounce package, which is actually two vacuum packs tied together by a sleeve, contains four links.
Other notable production introductions in 1995 that feature reduced fat claims include:
-- ConAgra Inc.'s Healthy Choice added seven new items to its line in the sandwich, breakfast sausage, smoked sausage, deli and frozen entree categories.
-- Nestle Food Co.'s Lean Cuisine added Hearty Portions, frozen entrees featuring sirloin beef tips, and rigatoni and meatballs to its line.
-- Bryan Foods Inc. introduced a 97 percent fat-free lunch meat line, featuring Southern-style baked ham and barbecue ham, Texas brand barbecue beef, and brown sugar glazed ham.
-- Along with its Free line, Oscar Mayer also introduced a lunch combination fun pack to its Lunchable line featuring 96 percent fat-free ham slices. The fun pack contains 10 grams of fat and 4.5 grams of saturated fat.
Over the horizon
It is no longer just enough to put "low fat" or "no fat" on a label anymore, according to Vierhile. "I don't sense that it will be enough because there are too many 'me toos' in the marketplace," he adds. "Everyone, it seems, is making a low-fat claim."
Riley adds: "It looks like, not only for us, but for many of our competitors as well, that [fat free] can represent a significant incremental volume opportunity."
As any processor will testify: Taste continues to be the most important aspect of a product.
"If the taste isn't there, there won't be any sales," Vierhile notes. "A company will have trial purchases, then it will have nothing."
To that point, he foresees the trend for the rest of the decade as improving taste, adding that the trend has already begun.
"Processors have spent [the past decade] taking out salt, taking out fat," Vierhile points out. "But they still have to have taste. Where do they find it? In different flavors. That will be the story for 1996 and beyond."
Marketing Intelligence has registered an upturn in flavored meat products. Nearly 16 percent of new products introduced during the first 40 weeks of 1995 included either honey, teriyaki, Italian or maple flavor. In 1992, only 5.2 percent of new products contained one of these four flavors.
"I sense that companies have mastered taking out fat and salt, but consumers are going toward flavor," Vierhile says. "To compensate, I think we will see these types of flavors."
In fact, research tells Vierhile that the marketplace might be ready for a spicy-type bologna. He says "it is just a matter of one company taking a risk for that type of product."