It’s the year 2020.

A consumer enters the gleaming market to purchase perishables and perhaps some sundry packaged items for some of their meals for the week. The shopper walks into the store, looking for the fresh meat department to pick up something for dinner, and what does she see?

What that buyer sees, exactly, is already on the mind of meat and poultry company executives and retailers. In addition to waging today’s battles in the competition for customers’ loyalty and food expenditures, industry leaders are planning for an even tighter, splintered marketplace in the short-term and long-term future.

It may not be something out of the old “Jetsons” cartoon or even the broad use of nutraceuticals that has been bandied about in recent years, but the way that people shop and eat continues to evolve. The lines between retail and foodservice channels are blurring, the technology and research behind meat processing, portioning and packaging is becoming more sophisticated and supermarkets are designed and stocked in increasingly innovative fashion.

But don’t just take our word for it. In this special report, “The Future of the Fresh Meat Case,” meat processing and merchandising experts lend their respective opinions and share predictions on where the fresh meat category is heading and in some ways, why it may be coming full circle.

H. Kenneth Johnson
Marketing Consultant
HK Johnson Associates
Winfield, Ill.

KJ: First of all, if you stand back and look at the whole picture, the retailers themselves are going to have to make the commitment to concentrate on perishables as a whole — 50 percent of store sales now are made up of perishables. Also, what I suggest that you do is to stand back and say, “Who are my customers?” Customers today are not the same as 20 years ago and expect more in the sense of freshness, health and a sense of variety. When we talk freshness, the product has to look fresh and be current. When we talk variety, when I worked in a store, we had three types of ground beef, whereas today you can get eight to 10 categories of ground beef and that s not counting gourmet ground meat products or ground turkey or bison that some retailers are offering as well. Another thing is that nutrition has not and will not go away and we’ll have to set up merchandising programs to provide healthful products to consumers. If you look at the current shift in categories of ground beef, for example, 90 percent (lean) is your fastest growing.

KJ: They are, and then of course you have to raise the question, “Is the service meat counter here to say?” It is here to stay and how it is compared to total meat sales depends on the store and where the store is. But to have someone behind the counter to pull something out and say, ‘Here, this is a...’ and offer suggestions on how to cook, it is extremely valuable.

KJ: One thing is to have the case laid out to be easy to read and understand. If you take a consumer, especially a soccer mom or someone who came home from work and has to head out again, they have about 20 seconds to decide what they’ll choose for dinner. The case will have to be laid out in a way that is labeled.

KJ: The basic cuts are going through an evolution. We used to put out a lot of bone-in cuts, like an 89-cent chuck roast or full round steak. Those things are extinct for a couple of reasons. It’s a big piece of meat and people are intimidated and think it takes too long to prepare. So one of the trends we are getting into is single muscle cuts.

Every muscle has its own characteristic. By isolating a muscle from the blade chuck steak, for example, we called it a flat-iron steak and I’ve never worked on something that changed things so dramatically like (the development of) that product. I think single muscle merchandising is a real trend and one that can take advantage of the individual characteristics of the muscle to get greater consistency and tenderness. You also get convenience. To my way of thinking, that will be one of the biggest changes.

KJ: I think probably the most dramatic is packaging, to have it look like the overwrap and to make it more consumer friendly. I think that’s eventually what you’ll see and I think it’s a good move.

Karen Boillot
Director of Retail Marketing
National Pork Board
Des Moines, Iowa

KB: One of the neat things happening is that retailers and suppliers are getting more sophisticated in their ways of approaching customers. They are seeking out better information on their customers’ shopping habits, needs and lifestyles. I think they will be doing a better job of taking that to the next step — saying, “What does this mean to our product?” Ultimately, it’s meeting the needs of that particular customer base. What works in Philadelphia may not work elsewhere in Pennsylvania.

Also, in the meat department — and I’m not sure exactly where it is being driven from — they are doing a better job of tying in resources from other parts of the store. Not just cross-merchandising, but using the Kraft Foods and General Mills’ of the world to access information on what may work best for their customers and looking at some of the Market Basket information. There is more of a sense of working outside the boundaries of “This is the meat department and this is the world I’m working in.” I think that is relaxing, and that means good things.

KB: We have four value cuts we’ve developed, two from the shoulder, two from the leg. They’ve been developed and rolled out to the packer audience and to the foodservice area, where we’ve been talking with chefs about utilizing the cuts and what applications and flavors they work with.

We’ve been working to get nomenclature established for them, too. We did some focus groups with chefs and an online survey with consumers, giving them a picture of the product and some options for names and asking “What comes to mind for you?” We had some fanciful names, like “rosetta steak,” but what we came back to was that the teras major became the pork breast, for example. These cuts will definitely be part of the new cuts that come out to retail.

KB: First of all, there is the much-publicized aging of the population. There is potential out there to continue to have a strong meat consumer as they age. They will have disposable income and are used to having meat in their diet and familiar with having dinner at home. But there is also a segment of consumers out there who aren’t at that same point, and that makes it crucial for retailers and suppliers to get a handle on what their product means to these consumers. What are the strengths of the product I’m bringing to market? How should I position that product? Where should it be merchandised? Those things are becoming more important as the customer base becomes more fragmented. It makes it more important for suppliers and retailers to work together to determine who those customers are and how to approach them.

KB: That relationship is becoming more and more important. From a retailer perspective, they are very concerned with differentiating themselves and making sure they have a loyal customer base and as far as packers are concerned, they rely on packers to provide them with research, resources and information on new product potential. They also need to know what they’ve ordered, when they’ve ordered it, to make sure they are in a proper in-stock position. It’s all one lumpy-bumpy ball, but one that they all have to manage together.

Al Kober
Director of Retail
Certified Angus Beef
Wooster, Ohio

AK: There are more single households shopping for meat than ever before. The single male shopper’s needs must be considered, when setting up the merchandising plan-a-gram for the meat case. Smaller packages, more single serving per package, more kitchen-ready cuts, (marinated, seasoned, etc) as well as more fully cooked, high-quality meat offerings. Cooking instruction and recipes are always good things to have available.

These are all good, but none of these will replace a knowledgeable meat associate. The retailer who really understands their consumer will use all the merchandising tools that other retailers do. But those retailers who recognize that their people are their ultimate merchandising tool will beat their competition every time.

AK: The use of case-ready meats will continue to grow and occupy more of the retailer’s meat case. Also, kitchen-ready, seasoned, marinated, and fully cooked meats will become the dominant variety of fresh meat offered by most conventional retailers. For newer value cuts, Certified Angus Beef was ahead of the industry in supporting many of these new cuts. The teres major and the flat iron are just two new cuts that Certified Angus Beef has supported and promoted in both foodservice and retail at a pace that has far out- performed the industry. Also, Certified Angus Beef has produced new cutting brochures for the rib eye, strip and top butt, to assist our account partners to cut and merchandise these primals into new and more profitable cuts.  

For branding, retail store operators are looking to brand their meat and the meat department. Many use Certified Angus Beef as their own store brand while others develop their own store brand, tying in their brand with Certified Angus Beef. The current move is to establish a brand name for all the high-end quality merchandise across all departments. But remember, brands are only as good as the quality level that they represent and the perceived value that the brand has in the mind of the customer.

AK: Good, colorful, POS with catchy phases can be used to create a fresh new look to any store. But, all the good stuff that is said, and all the great claims made on the POS, will have very little lasting customer support if the merchandise offered doesn’t support the claims. This is almost the same as “Truth in Advertising.” POS must be accurate and truthful. And most of all, the product must perform to the level stated on the POS or the credibility of the store is in jeopardy.

AK: Yes, some consumers really do want to know more about how cattle are raised. When the truth is told, without bias, consumers will discover that the industry is doing an outstanding job. Animals are being cared for in the best ways. Conditions are consistently improving because producers want the highest prices for their cattle they can get and those high-quality cattle that are best cared for, bring the highest prices.

An example is the fact that the government departments responsible for the labeling of “natural,” are currently debating over the wording that will best explain the difference between those cattle who meet the current natural requirements for natural processing claims and the cattle who will meet the requirement for natural raised claims.

Randy Irion
Director, Retail Marketing
National Cattlemen’s Beef Association
Chicago, Ill., Office

RI: The introduction and growth of case ready is the first thing that comes to mind. The last National Meat Case Study we have is from 2004 and at that point in time we were at 66 percent case ready; the numbers for 2007 will be higher than that. Also, beef was 23 percent case ready then and we expect that to be higher as well.

In addition, I don’t think it will happen right away, but I think we’ll begin to see more exact-weight products out there for beef. The retailers are listening to consumers who are saying things like, “This recipe calls for a pound of ground beef, and you have 1.2 pounds or 0.9 pounds — why can’t I buy one pound of ground beef?”

RI: Case ready itself hasn’t changed a great deal recently but what has changed is what is in that case. The heat and eat category continues to grow – we recently received information that shows the refrigerated beef entrée category grew 10 percent in 2006. It’s definitely a positive for the beef industry, and heat and serve competes with a lot of things, including non-meat items, other proteins and cheese pizza, for example. Also, many of those refrigerated heat-and-serve entrées utilize the chuck and the round and that helps because they are figuring out ways to add value there.

For other cuts, we are exploring some new cuts now from the chuck roll. It will take them a while to be rolled out.

RI: Value cuts are still growing. We have packers today making value cuts available case ready and that just allows some of the large national chains to take them, without any massive re-training of work staff.

As far as value-added products, I think that is one of the ways that some of the older-line retailers are distinguishing themselves from retailers who are able to sell at a lower cost per pound due to volume buying. There is plenty of opportunity in our convenience-oriented society for someone to come in and say, “I will take one more step away from the consumer.”

Also, we are such a melting pot in this country and we are always getting in new populations with new ways of cooking. That is great fodder for creating more interest at the case.

RI: There are so many great operators out there today who are really focused on delivering the very freshest, best tasting product to the consumer. There are great examples of merchandising out there, where you can run in and grab a whole meal right there at the meat case, with all of the ingredients.

And it’s not just the physical package, but the ways that stores are presenting them. At Publix, for example, every day they are cooking up something. They have the ingredients all there and can tell shoppers how to make it — “Here’s what you need to buy to make this at home.” They are sampling the item, too.

Also, although most of the product today is still sold in the self-service case, we are up to 74 percent of supermarkets or better that have a full-service case. Some of them are open when the store is open and others have limited hours, but most stores have service cases and they are definitely a way that stores can distinguish themselves.

RI: Absolutely. Branding is one of those things that was talked about for a long time, but it has really taken off. For one thing, there is an increase in the number of packer brands out there, like Maverick Ranch or Laura's Lean. Those brands have really good distribution around the country. Then you have brands like Ranchers Reserve that Cargill sells exclusively to Safeway, and Albertsons, that launched Blue Ribbon Beef and Steakhouse Choice (store) brands. With branding, Albertsons went to having a defined Select program and a defined Choice program.

Branding is a way to form yet another tight link with the consumer.

Pat Huebner
Senior vice president, of business development, and R&D
Swift & Co.
Greeley, Co.

PH: We’ve made some great strides on how to inform consumers how to cook the product and provide a better description of what the products are. That’s important for the future, because if you take a look at a 17-year-old in your house, they’ll say, “What’s a pot roast?” For the kids playing their Xbox and listening to their iPods, you have to think about what they’ll want in a few years.

Also, in terms of visual appearance, I think consumers are becoming more accustomed to vacuum-packaged fresh meat. It failed pretty badly about 10 to 15 years ago, but with the advent of retailers selling more vacuum packages, I think it will come, because it helps maintain freshness and provides a shelf life to consumers.

As for the fresh meat case, it’s very sanitary and well-lit now, and some of the higher-end stores are trying to give you that old-fashioned market look.

PH: Various degrees of “natural” continue to gain popularity in purchases and in interest in the media. Consumers today are more in tune to the products they buy, where they come from, nutritionals and food safety, and it’s not just the Whole Foods or Wild Oats type of consumers. Also, there is interest in smaller portions, cooked portions and exact-weight portions — whatever makes it easier to prepare. And flavors — people love to watch the Food Network and other cooking shows and are willing to experiment with raspberry chipotle or mango salsa. That fits into our seasoned, marinated line of pork and beef.

PH: We have a good amount of customers that like to buy product pre-sliced. That can come in any size thickness, from 3-4 millimeter slices to a 2-inch thick roast. Those cuts of meat are sliced here, put into a bag, vacuum-sealed and shipped to a retailer who then opens the bag and lays or shingles out slices of meat on a tray. You get consistent thickness on thinner cuts, and they lend themselves to stovetop cookery for today’s consumer who wants a sauté-ready type of meal. Another innovation is tenderness — beef and pork tenderness continues to be a buzzword for today’s consumers, and we are investing major resources, time, energy and people into all aspects of ways to get a tender product, from sourcing of raw material to putting product into packages and boxes. There are many steps involved in that and many details to follow to get the best possible eating experience.

PH: Today’s consumer is more adventurous and educated in food preparation, thanks largely to the plethora of cooking shows on TV. Also, without a doubt people will continue to purchase meals away from home that are prepared, but I think people will experiment with cooking at home because they will feel confident about quick meals that can be prepared easily. And I think convenience stores will continue to step up and offer items where a person can run in, pick up a piece of fresh meat and take it home and cook it.