Building a Case for Pork
Marketshare growth calls for developing a sophisticated platform of programs in these grueling and competitive times. MO-based Premium Standard Farms has a purposeful plan.
By Barbara Young, Editor-In-Chief
Meat is on the menu big time these days. Triggering its position is a laundry list of factors, not the least of which being the introduction of an array of new products with mass taste appeal coupled with sophisticated and targeted marketing and promotional campaigns. Of the total red-meat category, however, pork is a frontrunner managing to gain converts at a steady pace. Meanwhile, processors continue to deliver new and exciting taste sensations to faithfuls already hooked on pork. The net effect is a growing marketshare for individual companies, to be sure, but the entire industry also reaps the rewards of capitalizing on favorable market forces.
This report focuses on successful business strategies designed for developing and marketing pork products in the domestic and international arenas, featuring Kansas City, MO-based Premium Standard Farms (PSF) as the processor case study.
When the National Pork Board (NPB) invested a substantial share of checkoff funds to finance its “Other White Meat®” campaign in the late ‘80s, the love affair between consumers and pork had cooled considerably. Over the ensuing years, however, the courtship to win back consumer affection paid off to the point that recognition of pork as a white meat increased to 58 percent by 2002, from 9 percent in the early days. It takes more work than building a better mousetrap, as it were, to earn marketshare and consumer devotion, which is not lost on modern meat processors. Competition isn’t what it used to be, either. These days, as one processor put it, competitors operate in an arena saturated with all manner of proteins, meat and otherwise.
The cream does rise to the top, however, despite such challenges. Throughout its dynamic history, PSF remained dedicated to controlled vertical integration as the model and foundation of its marketshare growth. “The main reason for our success is based on the notion that our product is not a pig but a food product,” John Meyer, chief executive officer, explains. “It is a pleasure to watch the vision come together.”
PSF is a company managed by savvy business leaders with product marketing insight. With more than 60 years of combined experience, its marketing and product development team shares responsibility for developing and launching products.
“Our dedicated team is devoted to producing the finest, highest quality products,” notes Richard Morris, vice president of sales and marketing. “We hold our products to a higher standard. We continually evaluate consumer trends, prioritize projects, and assess products currently in the market.”
PSF’s product portfolio includes branded selections such as its Natural Excellence line designed to deliver an all-natural product with no antibiotics or growth hormones — ever. The result is a healthy, tender, flavorful, and juicy product appealing to discriminating consumers.
“Producing quality pork products begins long before the animal is born,” Morris notes. “Due to our fully integrated model, we control all phases of production from our farms through our processing facilities to our customers’ warehouses. We do everything possible to provide the premium quality for our customers and what their consumers are looking for.”
A critical aspect of quality relates to food-safety assurances, to be sure. PSF’s food-safety tools include a sophisticated traceability and process verification system. We were the first pork company to quality for the USDA Process Verified Program Program (PVP) certification in 1998, reports Collette Kaster, vice president, food safety and tech services. “This voluntary, third-party assessment program assures our customers and their consumers that every cut of Premium Farms and Lundy’s [PSF subsidiary] products meet exacting criteria and meat quality, food safety, farm-to-table traceability, and other measures day in and day out,” Kaster explains. It does not end there, Kaster continues, noting that the company’s internal teams also work closely with customers to provide the best program for their meat case. “We evaluate every step of our process to provide an increasing level of taste, palatability, and customer satisfaction,” Kaster concludes.
PSF product distribution flows through four business channels: retail, export, further processors, and foodservice. Its business success in part comes from non-traditional techniques, reflected in its distribution alliances with targeted customers. “We are committed to building, with our customers, solid and long-lasting relationships,” Morris says. “Each program is tailored to our customer needs and is built from our collection of point-of-purchase materials, case dividers, program literature, and recipes to ensure merchandising success. We also work with our customers on advertisement development. We value our customer relationships within all business channels.”
Thanks to a joint marketing program between PSF and PM Beef Group (PMB), both PVP certified operations, beef and pork remain on the shelves of Cleveland, OH-based Heinen’s Find Foods, a joint supermarket customer. PMB is a division of Richmond, VA-based PM Beef Holdings LLC. The Ukrop’s chain of stores, also based in Richmond, is another joint customer of both processors The PSF and PMB business relationship with Heinen’s dates back to when both firms began supplying traditionally processed boxed beef and pork to be cut and packaged by Heinen’s own meat cutters. Heinen’s operates a chain of 14 stores sprinkled throughout communities in the greater Cleveland area.
Product development and marketing tactics
Current marketing goals necessitate reaching for a point of difference to remain competitive. At times, opportunities simply present themselves, and those ready to exploit such potential nearly always come out ahead. It’s all about being prepared. To that end, PSF’s team conducts extensive consumer research to understand and identify consumer expectation before launching new products. “We know it is important to provide flavorful value-added and convenient foods that allow shoppers the opportunity to prepare healthy meals for their families,” Morris says. “As consumers eat out, they experiment with different flavors and cuisines. One of our goals is to develop products for our customers that will bring their consumers back to repeat business.” As Morris notes, Italian and Mexican dishes maintain their popularity while other exotic flavors encroach to win converts. “Many of today’s consumers see food as an adventure and they are willing to experiment with different cuisines, spices, and marinade, he says. “Examples include Thai, Greek and Middle Eastern fare, Japanese, Spanish, Cajun, and Chinese cuisines. Popular trends also include cooking with fruit sauces and spicier or bolder flavors with pork.”
Challenges — such as recent threats from an American case of bovine spongiform encephalopathy (BSE) and the current focus on low-carb diets — force processors to reshape their product development and marketing plans. On the flip side, diet trends cleared the way for new product initiatives. “As a result of sweeping popularity of low-carb and protein-friendly diets in the United States, we have seen the inclusion of Premium Farms products in many carb-counting diets,” Morris says. PSF’s product portfolio includes a line produced at its Clinton, NC, division, newly acquired in 2001. Lundy’s hams and bacon products, popular on the East Coast, enjoy a 50-year life. New product launches this year include Premium Farms© bacon available in L-boards and fully cooked varieties and a line of fully cooked hams. Target markets comprise “discriminating customers” who prefer high-quality flavorful products.
The pork industry may have come full circle in its quest for marketshare and consumer loyalty. NPB recently announced the hiring of a new ad agency to develop a $10-million marketing campaign to “repurpose” its long-running “Pork. The other white meat” tagline.
That’s all well and good, but PSF already knows its marketing program. “Our long-term goal is to remain customer focused and to build both our customers’ brands as well as our Premium Farms brand,” Morris conveys. NP