Growing consumer interest in new flavors and cuisines is helping to propel sales of value-addedproducts, and retailers are responding with both greater selection and smart promotions to satisfy shopper demand.
Flavor exploration is one of the secondary drivers of the value-added meat category, after convenience and ease of preparation, Chris DuBois, senior VP at Chicago-based IRI, told SN.
“Some consumers don’t want to invest in the time to master a recipe, or own all those spices, but they are willing to let a retailer experiment for them, and they can try new things that way,” he said.
Value-added meat sales grew about 6.4% in 2015, to about $4 billion, according to IRI.
Recent IRI research on retailer performance has also found that value-added meats can play an important role in the overall performance of the meat department. The top quartile of retailers in terms of meat department sales growth recorded a 14% increase in value-added meat sales, while the bottom quartile of retailers saw value-added meat sales decrease by 7%.
“When retailers get value-added meat right, there’s a halo that forms over the meat department, and it just unlocks a huge amount of growth,” said DuBois. “It’s probably one of the most important parts of the meat case and the overall offering.”
Retailers have been driving growth through sampling and promotional strategies that emphasize the convenience and availability of the products. They also have been ramping up their value-added meat selections, adding new recipes and flavors to accommodate growing consumer demand for bold taste profiles.
At Salt Lake City-based cooperative wholesaler Associated Food Stores, retail members are encouraged to create their own value-added meat offerings in-house using the wholesaler’s seasoning and marinade program. Retailers can select from a range of 32 different marinades, glazes, rubs and other ingredients to turn traditional meat products into no-fuss appetizers and entrees for their customers.
Associated partners with a seasonings supplier to provide not only the glazes, marinades and other ingredients needed for these items, but also the appropriate nutrition labels, Kelly Mortensen, meat director at AFS, told SN.
“We have a sell sheet we put together that shows [retailers] how to make the product — how much protein to use, and which seasonings,” he explained.
In addition to the store-made value-added items using the spice blends, AFS stores are also carrying some branded value-added offerings from meat suppliers in order to maximize the variety of product available for customers.
AFS has been focusing on featuring one value-added item at a time in its ads for an entire month, which Mortensen said gives consumers an opportunity to return for the item on a future visit if they take an interest in it. Often, he said, one of the challenges with value-added items is that availability for some items tends to vary week to week.
“We try to introduce good-selling items that will be in there at least four weeks and can become a mainstay in the meat department,” said Mortensen.
IRI research found that placing value-added meats in feature ads drives a 145% lift in sales, vs. a 58% from price reduction only.
Expanding the offering
At Coborn’s, value-added meats have become a centerpiece of the meat case, said Mike Richter, senior director of meat/seafood and fresh at the St. Cloud, Minn.-based chain. Coborn’s is in the process of expanding its service meat cases and value-added offerings, which includes items such as pulled pork from a new in-store smoker program.
“We’re seeing a big swing from more traditional red meat offerings to value-added items that are easily prepared, oven- or microwave-ready,” said Richter, noting that about 80% of the meat items in the service meat case have some value-added elements, such as dry rubs or full marinades.
“We do a lot with marinated and breaded chicken, and all types of flavored chicken wings, different marinades of pork — every protein has multiple SKUs of some type of marinade or dry rub,” he explained.
Traditional favorite marinade flavors include teriyaki, ranch-peppercorn, cilantro-lime and honey BBQ, among others, while stuffed and crusted items also are popular, across the gamut of meat, poultry and seafood categories.
Many of the meat-case items are also adapted for Coborn’s “Ready. Chef. Go!” — microwave- and oven-ready meals that include protein and vegetables — which Richter described as a fast-growing segment of the business.
Coborn’s often seeks to make shopping simpler for its customers by offering value-added meat items by the each — two-for-$5, or $2 each, for example — which allows shoppers to easily “calculate in the mind what it’s going to cost to feed their family,” he said.
Product sampling is key to driving value-added sales, Richter explained, noting that individual store managers have the autonomy to choose which items they want to promote in that way.
“We’re seeing a huge lift in service meats, relative to self-service, and I think people love that kind of presentation and service that goes with it,” said Richter.
Article By: Supermarket News