ATLANTA -- Ralphs Grocery Co., Compton, Calif., is one retailer that found out the best way to make branded beef work may be to do it yourself -- with a little help from your friends.
In a bid for better beef sales, the chain took the bull by the horns with Ralphs California Beef, a vertically structured store-brand program, that is squeezing hefty volume increases out of the troublesome Southern California market by offering consistently tender, flavorful product.
Charlie Bergh, group vice president of perishables with Ralphs, outlined the chain's strategy in a seminar on partnering at the Meat Marketing Conference held here earlier this month.
The strategy is getting results. Bergh told attendees that the program, launched April 1993, helped Ralphs units score average increases of 7% in beef sales year to year, as measured by pounds sold per 1,000 customers.
Bergh said such increases were nothing short of "phenomenally big" at a time when overall food sales are running flat to negative in Southern California.
The 174-store chain decided that beef sales were important enough for it to create an exclusive program, using nearby feed lot and packer partners so that from calf to case the product is controlled to render a branded point of difference.
Using pure-bred Holsteins, fed and slaughtered to Ralphs' specifications, Bergh said the chain is now offering beef that is consistently more flavorful and tender than traditional beef.
Beef is important to Ralphs; it represents 40% of fresh meat sales, he said. And while meat consumption has decreased, "When looking at total dollar sales in the store meat is still the largest single dollar producing category, nothing comes close in weekly sales, except soft drinks," he said.
"The key point is that meat customers drive total sales, because the meat buyer is also your primary shopper," he said. "And beef drives meat department sales."
Ralphs conducted extensive consumer research to find out just how important meat is to its consumers, and just how those consumers like their meat.
"Every time we do consumer research and ask what they want, we start to hear that they want fresh-looking, bright red meat, with little white flecks. We ask them about meat, and their responses are always about beef. To them, meat is beef, and beef is meat."
To find a way to play to that psychological attachment to good beef, Ralphs also researched the perceptions of what makes good beef quality. Bergh said Ralphs found consumers want consistently tender, flavorful, bright red meat with the fat trimmed.
While he said "color is the ultimate criteria used to judge freshness," quality expressed in tenderness is what gets them to come back. But Ralphs, consulting industry research from Texas A&M's meat science program, found something "that may come as a shock to many of you. Beef quality, particularly tenderness, is lacking.
The program's national beef tenderness study showed that while flavor levels were consistent, "tenderness levels were all over the board. The bottom line is a lot of tough beef in supermarkets," Bergh said.
Ralphs decided to make a break from the herd. Citing research that claimed pure-bred Holstein cattle produced more consistently tender meat than many of the "mongrel" strains of cross-bred cattle in feedlots across the country, Bergh said the chain found forged partnerships with a packer in Arizona and four cattle feeders in California's Imperial Valley.
While its partners got to work raising and producing tender beef, Ralphs got busy setting the stage to create demand for the product among Southern California consumers, who Bergh said lean toward the provincial in their preferences.
"The feeling was they would buy California beef, particularly if the tenderness and taste were guaranteed." Research confirmed that some consumers would even switch stores to buy local beef that guaranteed it would be more tender and flavorful. That clinched it for Ralphs; the chain created a marketing campaign built around the branded point of difference and a double-money back guarantee.
"With Ralphs California Beef, the marketing message was easy and clear, because we could say it was consistently better in terms of palatability than other beef, more flavorful and more tender that traditional beef," Bergh said.
The chain dropped that message into in-store communications to employees, through its Hot Sheet employee newsletter, and to consumers through shelf talkers, case signage, channel strips, shopping bags and distinctive branded logos on all beef packages.
That was buttressed by the use of full page newspaper ads reaching more than 3 million consumers, and electronic media including radio spots and television commercials focused exclusively on Ralph California Beef.
"We'd never done it better than this launch," Bergh said. "We knew after the first week he had a hit, but how big a hit?"
Bergh is now prepared to say it is a substantial hit, judging by what he claims is probably the most accurate measurement available for perishables categories: tonnage per 1,000 customers.
"Comparative measurements of perishables sales in different time periods is difficult at best," he said. "Pure sales is not good because of the impact of deflation and inflation of product form period to period. Pure tonnage is also not accurate because it is greatly influenced by promotional activity."
Ralphs settled on determining the program's success by taking weekly data on customer counts per store and meat tonnage shipped by store, and combining these two to arrive at an average figures of pounds sold per 1,000 customers.
"That figure increased on average 7% from 1993 to 1994, and for some periods was up 20%," Bergh said. "Needless to say, we are pleased with the California Beef program.
The positive impacts are extending beyond beef sales, he added. "The program allowed Ralphs to differentiate itself in an important category, If customers shops you for beef, you can be sure they will shop the rest of the store with you."
The Meat Marketing Conference was organized and run jointly by the Food Marketing Institute, American Meat Institute, National Grocers Association and National American Wholesale Grocers Association.
