Meat Category Managers Think Small

Meat Category Managers Think Small

Rising prices and changing demographics build demand for smaller packages in meat departments

When supermarkets began putting down roots in the budding U.S. suburbs after World War II, their target demographic was easy to spot — small families. The mom and dad with the white picket fence and 2.5 kids. For decades, the industry thrived by serving those families, but clearly the times are changing.

According to data from the U.S. Census and other sources, more than a quarter of Americans live alone, and the number of one- and two-person households in the U.S. continues to rise steadily. The Baby-Boom generation are becoming empty nesters, and young people are getting married later and delaying having kids of their own.

For meat departments, these and other trends mean that there is a growing segment of customers who might prefer smaller packages of meat.

“Lots of people in our focus groups [have said] ‘I’m single. I’m just cooking for me, and I don’t want to buy two or three steaks’,” noted Danette Amstein, managing principal of Midan Marketing. “And we’ve had single moms and single dads say the same thing. ‘I’m not going to make steaks for the kids, but I sure would like one for myself.’”

Research at Midan has indicated that a lack of variety in terms of package sizes and portions has become a key point of frustration for many of these shoppers from smaller households.

Rising meat prices and the lingering effects of a major recession are also forcing many shoppers to seek out packages with a lower unit price, regardless of household size.

“Consumers have changed considerably,” said Kelly Mortensen, corporate meat, deli and seafood director for Associated Food Stores [2], Salt Lake City. They’re not stocking up like they did before, he said, and changing household demographics could be a reason, in addition to rising prices.

Scott Nettles, meat and seafood director for Lubbock, Texas-based United Supermarkets [3], said that he had noticed the smaller household trend, but added that it has been mitigated in United’s market by the growth of Hispanic families in the area. Still, United’s meat departments have made some adjustments, largely because of rising prices.

“We have moved away from the really big roasts (3.5 pound plus) that we used to merchandise years ago to smaller 2 to 3 pound roasts,” he said. “We have also seen that our value packs of meat sell better when they are under $20 dollars. With the rising cost per pound, we have had to downsize the amount of meat that we put in a Super Value Pack.

“We have also had to start cutting our steaks thinner to keep the cost per package lower. This is even more effective at the end of the month, when people get low on cash for food.”

Of course, if a shopper wants a smaller portion, he or she can just ask for one at the service counter. The problem is, many shoppers appear to have become shy about approaching their local butcher for everyday purchases, something Amstein referred to as “the fear of the full-service case.”

United, along with its Market Street and Amigos banners, view their full-service meat counters as a differentiator for the company, as many of their competitors have moved away from full-service or have taken out meat cutters completely, Nettles said. However, he agreed that many shoppers can be intimidated by the full-service area, due to their unfamiliarity with different cuts and cooking techniques.

Ironically, that’s exactly the type of information that the staff behind the counter could help them with.

“We strive to get our team members to engage the guest as soon as possible when the guest enters the sales area,” Nettles said. “Being proactive in engaging guests is one way to keep them buying the service counter. … Having knowledgeable team members who are not afraid to speak and understand the different cooking methods makes a huge difference.”

Recent “Power of Meat” reports from the Food Marketing Institute indicate that most shoppers view the meat counter as a destination primarily for special occasions — parties and holidays when they want to serve the best, or they want something very specific. Simply encouraging shoppers to head to the meat counter whenever they want a small portion might be one way to help this group, Amstein said. Small signs that read “Need a different size? Use service case” might work.

Mortensen also said that use of the full-service case “isn’t mainstream,” but that the area can be used to attract customers who were interested in smaller portions. However, he also pointed out that the per-pound pricing signs might be discouraging shoppers.

“One of the reasons customers might be turned off a little by the service case is because you have pound pricing there,” he noted. “So it’s $10 per pound, and you see a steak there, but you don’t know how much it’s really going to be until they get it on a scale. ... But, if you’ve got the unit price there, like New York strip steak for $5, that makes it easier for customers to make that decision. If they want it thicker, they can always get a one-pound steak.”

Associated Food Stores has offered some “Pick Five” sales recently, where shoppers can choose five items from a group of products and pay a set price, and Mortensen said they have been gaining momentum.

“That seems to be working well, which would lead me to believe that people are looking at unit price rather than pound price,” he said.

Trevor Amen, manager of channel marketing for the National Cattlemen’s Beef Association, said that NCBA has been noticing divergent behaviors from shoppers who are focused on price and value. On one end of the spectrum, there are shoppers interested in bulk or bundled deals. “At other end of the spectrum, they’re buying [lower-priced items] more frequently,” he explained. “They may not have the cash flow to make that initial up-front purchase, but they’ve found ways to buy smaller package sizes at lower total package prices.”

NCBA has been urging meat departments to check out its Beef Alternative Merchandising program, which suggests a variety of new steak cuts, most resulting in smaller portions. The organization recently launched a series of training videos on its retail website www.beefretail.org.

Regardless, Nettles and Mortensen both agreed that shoppers remain intently focused on price.

“Our filet buyers may now buy ribeyes. The ribeye guest may choose a sirloin and the sirloin guest may be trading down to ground beef,” Nettles said. “The same is true in lunch meats and especially sausage. These categories are seeing growth.  I believe it is due to these meats being a more cost effective, center of the plate alternative to steaks or roasts.”