Supermarket operators are putting the destination status of the meat department to work as they leverage private-label items to build store loyalty. Most retailers are creating these signature brands within the meat case -- not only to create customer excitement, but also to present hallmark marketing opportunities.
Independents, in particular, are closely evaluating their image and developing brand strategies, fitting private label into the store's marketing mix as competition heats up.
"Private label has always been seen [by consumers] as a price brand," said Bob Bova, a Fayetteville, Ark.-based consultant. "Now retailers are turning that notion on its head and using store brands to represent quality."
In the wake of consolidation, some operators are viewing private label as a primary means to separate themselves from the competition and get a real distinction from the operator down the block, he added.
"Succeeding with a quality store-brand program takes a lot of homework," said Bova. "There are differing brand strategies to evaluate -- how the private label interacts with national brands. Then, you have to evaluate how to back the private label."
Execution of the private-label program is the last step, but just as important as those that come before, he noted. The strategy at store level has to focus on helping consumers understand that the items are as good, or better than, the national brand.
"You have to know your customer first, but any controlled, private or store label is best positioned as a method to build total-store image," said Bova.
John Pardington, owner, Holiday Market, Canton, Mich., agrees that store distinction has come to rely heavily on the differences in perishables.
"We like to be the only ones in our marketing area carrying different high-quality, signature items that customers are looking for," he said. "I always look for products that can enhance my store's image and offer something customers can't get at the chain stores."
The independent sources its meat from Spartan Stores, Grand Rapids, Mich., offering up their wholesaler's signature Chairman's Reserve premium beef program. Holiday Markets' meat department takes a total service approach in running 50 feet of case.
"I'm always looking for an edge," said Pardington. "High quality gives me an exclusive."
An additional 12 feet of self-service case offers family-size packages and precooked items that are ready-to-heat and eat.
Customers have responded well to the signature strategy. Sales have tripled over three years since the unit opened. Meat department sales represent 16% of total-store sales.
"You have to get out of the mentality that the only way to sell food is through low price," said Pardington. "I believe that by offering great service, great product and items at a fair price I will succeed. You have to be in the right area, however, and do your homework."
Minneapolis-based Nash Finch has strategically positioned its perishables offerings not as a simple premium tier tacked on to existing private-label lines, but as high-quality, stand-alone brands. The wholesaler has designed true signature labels with high-end connotations. Within the perishables departments, this has meant giving various selections differentiating names to complement the retail operator's Fresh Place format image.
Within the meat department, sales are captured in three key areas -- sausages, ground items and filets.
The presentation of sausages is dubbed Old World Smokehouse Sausage. This pre-packaged offering includes a variety of vendor-processed items ranging from cheddar brats to old-fashioned link wieners and rope sausages.
"This program has replaced the store-made items primarily for food safety and consistency reasons," said Mike Baker, vice president, perishables.
"What our signature programs do is allow the independent retailer a means to compete in the arena without duplicating the expense of setting up programs," said Baker. "Signature items take on a unique look and stand apart."
Nash Finch's Ground Central Station is another meat department private-label program driven by food safety concerns.
"Ground Central Station is more than a merchandising program," said Baker. "We have established standards for trim, freshness code dating, sanitation and complete chill-chain management standards. Source verification and lean content are also included in the standards. Ground meat is of top importance. It is a destination for shoppers. That is why we have chosen to put a signature on it and stress freshness."
Ground items are merchandised in service and self-service formats, depending upon the needs of the Nash Finch-supplied retailer. Along with ground beef and ground turkey, pork and sausage patties are offered under the Ground Central Station signature label.
Nash Finch also has taken a decidedly upmarket tack with sirloin filets. Under the signature Our Best Filet, shoppers can select beef and pork sirloin filets from either the service or self-service case. The beef offering is a four-ounce filet cut from the heart of the sirloin with a one-ounce strip of bacon wrapped around it. This item is sold per piece, at $1.59. Pork filets are seven ounces.
"The importance of these signature programs is that there are specifications and controls to ensure the consumer they are getting a quality standard item," said Baker. "We set standards and won't compromise with our own brands."
Indeed, launching and maintaining a store-brand program in perishables requires a multi-level approach encompassing a variety of issues, industry experts said. That is why it is critical for operators to set high standards and to source from a vendor who has the ability to meet those specifications.
"So much is going on in the supply side to help create signature brands," said Bruce Axtman, president, The Perishables Group, a Chicago-based consulting firm. "Traditional boxed meat suppliers are offering value-added and pre-cooked items. There is more ability and more options to offer distinguishable products. Retailers, however, have to move out of the production focus. If retailers would work with suppliers they could get some of the equipment and labor out of the stores."
Who's Buying Store Brands?
When it comes to store brands, minorities lead the pack in the desire to see their favorite supermarket carry additional fresh private-label products. Of 1,357 people responding, 81% were non-Hispanic white, and 19% were minorities. Of those: