Consumers’ changing preferences at the meat case

Meghan Pusey, Director, Public Relations, Channel Marketing – NCBA

Introduction

The meat department leads sales of all fresh departments and is integral to the success of any supermarket. Yet the complexity of the fresh meat case makes it challenging to understand the consumer’s purchase decision process and its implications for retail strategies. Recent research shared at the 2012 Annual Meat Conference explored consumer perceptions, attitudes and behaviors regarding fresh meat and poultry. Sessions addressed what’s driving the consumer at the meat case, what variables influence the purchase decision and if, how and why consumers switch between proteins. Insights from this new research help the checkoff-funded retail marketing team increase their understanding of what drives purchasing decisions in a recessionary environment and develop the best marketing strategies for fresh beef products.

Discussion

Current economic uncertainty continues to affect how and where consumers shop for meat. It appears these past few years have created very savvy grocery shoppers who have mastered the implementation of a variety of money-saving measures ranging from sales specials and coupons to cooking different types of meals. Additionally, shoppers are able to rapidly dial up or down grocery and meat spending depending on how economic pressures are affecting them personally. For instance, in 2011 we saw rising gas prices very quickly affect the number of grocery trips and spending. Likewise, inflation in many food categories has resulted in educated switching between different kinds and cuts of meat and poultry — putting enormous emphasis on sales promotions, price per pound and package cost.

Here are the top 10 trends impacting today’s grocery meat case and relatively beef sales at retail in 2012:

1. Price takes on an ever-greater role in the meat purchasing decision process. In addition to price per pound solidfying its number-one ranking as the most important decision factor, total package cost is now the second most important decision factor, surpassing product appearance. When deciding what to buy, price has always dominated all other decision factors, but the 2012 Power of Meat report found a significant increase in the role of price, total package cost and sales promotions on the amount and kind of meat/poultry purchased. While pre-trip research remains important, the emphasis continues to shift to an in-store purchasing decision — making clear signage and effective operations all the more important. Price-related promotions are especially effective for steering people to a certain kind of meat or poultry and slightly less effective for the amount purchased. Shoppers’ reduced interest in volume-based discounts, such as bulk and buy-one-get one free, as measured last year, did not rebound any this year.
2. The two predominant trends in money-saving behaviors specific to meat and poultry are finding ways to purchase the product less expensively (on sale, using coupons, a cheaper cut, private brands, etc.) or by simply buying less. The latter led to a drop in volume sales across proteins.
3. Consumers’ focus on price and value is further underscored by the growing share of shoppers engaged in pre-trip research and planning meals around promotions. However, an even greater share compares prices while in the store. The end result is greater shopper flexibility to adjust purchases to spend less. Many shoppers are more willing to switch up their purchases based on promotions, have less discretionary income due to inflationary and economic pressures, and may want to avoid food waste that can occur when buying in large quantities. However, 9 in 10 shoppers report they can be persuaded to buy in larger quantities with substantial discounts and/or convenient packaging options that pre-portion the bulk purchase into meal-size portions.
   
4. Meat and poultry play an important role at the American dinner table, with chicken and beef making up the largest share of purchases. The fresh category continues to be much larger than the heat-and-eat and ready-to-eat categories, but the latter continue to show signs of strength for the convenience oriented shopper. Another area of growth is marinated meat and poultry, with an increasing share of shoppers preparing their own mixes or purchasing marinades or spice mixes along with the meat/poultry.
5. Natural and organic meat and poultry experienced an uptick in the number of buyers over the past year (24 percent of shoppers), despite economic pressures. Additionally, 90 percent of shoppers predict they will buy about the same (70 percent) or more (20 percent) next year. Full-service supermarkets are the dominant outlet for natural and organic meat/poultry sales, with 50 percent of purchasers identifying this channel as their primary source.
6. Full-service supermarkets continue to be a stronghold for fresh meat and poultry, with high retention rates and a pick-up of shoppers from other channels, especially supercenters. There continues to be a decline in the number of stores offering a full-service meat counter, and as a result the majority of purchases (71 %) are made from the self-service meat case. Research showed that perceptions of case-ready meat remain strong, with the vast majority of shoppers believing the place of preparation and packaging does not influence the quality either way.
7. Meat and poultry preparation techniques have changed quite a bit over the past five years. Frying (pan fry and deep fry) experienced a 22 percentage-point decline in use, whereas more people are using the oven and crock pot/slow cooker (up 12%).
8. Knowledge about meat and poultry, including preparation, nutritional values and meal planning, is marginal at best. When asking for advice on how to best prepare meat and poultry, family and friends are the predominant source of information, followed by digital resources, such as the internet and apps. Only 6 percent would turn to the butcher or meat department. Yet, interest in a “here’s-how-it’s-done” type service in the meat department is moderately high, providing suppliers and retailers with an excellent opportunity to connect with shoppers in new ways.
9. Shoppers are interested in a multitude of packaging innovations, from leak-proof packaging that reduces food waste to convenient cooking. Shopper preferences for packaging are highly related to purchasing habits, and in the case of environmentally-friendly packaging, interest is subject to price pressures. Opinions on the use of resealable or freezer-ready packaging differ depending on purchasing habits, with those who tend to buy in larger quantities to freeze and use over time showing greater interest.
10. Ways to grow meat sales include better prices, better quality and greater variety. Introduced by the beef checkoff, Beef Alternative Merchandising offers high-quality beef cuts at a lower price per-package and offers the variety consumers are looking for with the most popular cuts, like Sirloin, Top Loin and Ribeye. Further fabrication make these beef cuts available at a lower price per package and in the portion consumers are looking for.Selling beef in bulk provides shoppers a cost-effective option for creating many meal options. To capitalize on this trend, we established Slice ‘N Save – a DIY program which allows consumers to buy whole subprimals and cut their own steaks and roasts at home. By cutting their own Tenderloin steaks, consumers can save at least $2 per pound.

Conclusions

In 2011, grocery and meat shopping continued to be dominated by finding ways to save. The outlook for 2012 is very similar to that of 2011 with a large share of shoppers focused on curbing spending on grocery items, including meat and poultry. While expectations are that inflation will be more moderate, little economic and income growth is expected. Therefore, better quality and variety, sales promotions, coupons, and excellence in marketing and merchandising execution in the meat department will be crucial to growing volume sales along with dollar sales. Retailers and manufacturers alike will need to find ways to effectively address the “spending less by buying less” trend as traditional marketing and merchandising measures may not be effective.

Additional Resources

The Power of Meat 2012©

Understanding the Fresh Meat Consumer Decision Path, Perishables Group 2012