What’s In a Number? Leveraging Scanner Data to Understand the Retail Beef Consumer
by Alison L. Krebs, Director, Market Intelligence, National Cattlemen's Beef Association, a contractor to the Beef Checkoff
That Constant Beeping
You’re in the grocery store checkout line and as each item passes over an electronic scanner, you hear that omnipresent beep, beep, beep. Originally adopted in the mid-1970’s to speed up pricing and checkout, the scanner, with its ubiquitous bar code, facilitates retailer inventory management, loyalty cards and couponing, as well.
One additional opportunity, however, has been to consolidate this actual consumer purchase data beyond the store or chain level, and regroup it by product type – to understand that bigger picture market view. The National Cattlemen’s Beef Association, on behalf of the Beef Checkoff, purchases this data to gain important insight into retail beef sales.
Two companies aggregate and sell retail scanner data, and NCBA purchases retail meat department data on a monthly basis from Information Resources, Inc. (IRI, formerly Freshlook). This data is then cleansed, categorized and formatted via Meat Solutions’ VMMeat System so the checkoff can understand what’s happening with beef and competing proteins in the retail meat case.
When the scanner and bar code first became the norm, the vast majority of retail food purchases were made at the traditional grocery store. Today, food is frequently purchased from other retailer segments, such as club stores (BJs and Sam’s Club), mass merchandisers (Target and WalMart), drug, dollar and convenience stores, as well. So having just supermarket data in today’s world is not enough.
So, what is MULO? It’s all of these retailer types grouped together: MULO – or Multi-Outlet – in the IRI data world. As some store segments lack traditional meat departments, however, (despite selling some fresh meat products such as ground beef), MULO for the meat case does not include sales from drug, dollar or convenience stores. The data set also excludes small grocery stores (total annual sales less than $2 million), butcher shops, online retailers and military commissaries. Finally, while the vast majority of retailers have chosen to share their sales data, a handful of retailers – most notably Costco and Whole Foods – currently do not share.
As consumers have a long-standing fondness for fresh beef, the majority of retail beef sales (70-75 percent) move through the meat case. As a result, NCBA currently only purchases meat department data, so beef sales through other departments such as refrigerated meats (e.g. hot dogs), packaged lunch meats, dried snacks (e.g. jerky), deli/prepared foods (supermarket foodservice), etc. are not included. Retail sales data for all other animal proteins, with the exception of fish and seafood, is purchased as well.
Finally, as mergers occur, new stores open and others go out of business, the complete data set is “restated” each year to reflect the current list of participating retail chains and stores. For example, when Wal-Mart sales were added a few ago, the previous five years’ data was updated to include Wal-Mart. This restatement allows for accurate comparison over time, but limits the comparison to the past five years.
While the data has some limitations, it’s extremely informative. It provides the beef checkoff with excellent insight into how consumers are spending their meat department dollars.
Slice and Dice
Sales data, like the beef that is being measured, is amazingly versatile. It can be mixed, matched, studied and summarized in many ways to understand trends and changes in the marketplace. The three primary measures are price per pound, dollars and pounds. Add this to a whole host of other characteristics that are captured by that beep, and the insights that can be gained from the sales data are nearly endless.
Here are just a few examples of how the available data can be viewed: cut, primal, package size (range), grade, category (e.g. ground), form (e.g. bulk or chub for ground beef, steak or roast for whole muscle), timeframe (weekly, monthly, quarterly or annual), region (Figure 1) and production claim. Sales of additions, such as beef preparations with vegetables or cheese, or those that are marinated or seasoned are captured, as well. In all, the data enables the checkoff to answer numerous questions and gain important insight into what consumers are buying.
Making Numbers Count
In and of itself, the retail scanner data is just a bunch of numbers. What matters at the end of the day, is turning this information into meaningful insight to drive beef demand. Key to this is getting quality information to the right audience in a timely manner.
Select data summaries, for example, are available to retailers and other industry partners under the Sales Data tab of www.BeefRetail.org. For example, Figure 2 shows July 2016 versus year ago pound sales of selected proteins and the meat case overall, as well as the most recent 52-week period compared to the prior year. Note that due to the complexity of collecting, organizing and summarizing, data is typically available five weeks following the end of the month. Here are some additional frequently-accessed resources:
- Monthly pound and dollar sales, price per pound and USDA feature data tables, along with a written summary: http://beefretail.com/monthlysalesandfeaturingsummaryreports.aspx
- Quarterly top 10 cut lists (e.g. steaks, lean cuts, pot roasts): http://www.beefretail.org/top10cutlists.aspx
- Quarterly category reports (e.g. ground beef, middle meats, select production claims): http://www.beefretail.org/categoryreports.aspx
Beyond this website publication, NCBA actively leverages scanner data to support numerous checkoff programs, including: communications, culinary, product development, innovation, issues management, trust, market research, strategy, planning and marketing. One recent example confirms 2016 retail beef pound sales are increasing in line with supply. Figure 3 shows that despite weaker ground beef sales through May (see Ground Beef Challenges article in this same issue), many consumers have been trading over to roasts and up to higher value steaks as prices have moderated in 2016.
Other data users include strategic account managers, who frequently share information with key accounts to help them evaluate their performance against national norms and look for incremental merchandising opportunities to improve their beef sales and profits. State beef councils regularly request data to support their efforts, as do other checkoff contractors and the Cattlemen’s Beef Board for ongoing demand measurement work.
Connecting the Dots
With an eye on making the most from this checkoff investment, NCBA continues to seek ways to learn from, leverage and apply this valuable resource. Combined with market research insights that bring consumer rationale to light along with other informative data sets and tools, retail meat case scanner data enables the beef checkoff to track and understand the retail purchase behavior of today’s consumer.
Tags: Beef Issues Quarterly, Fall 2016, Trends Analyses
October 13, 2016