Case-Ready Penetration
By Bryan Salvage, Editorial Director
Although not at the volume proponents predicted years ago, case-ready red meat continues growth, expansion.
Case-ready proponents take heart. Although predictions made a decade or more ago by enthusiastic fans of this technology that most supermarket meat cases would be 100-percent case-ready by now hasn’t panned out, its progress nonetheless has been still very impressive.
“In 2004, the case-ready market was about 2.6 billion packages, reflecting a growth of 19 percent annually since 2001,” says Huston Keith, principal of Keymark Associates, a market research and business development firm based in Marietta, GA. “I expect it to grow more slowly over the next five years — about ten to fifteen percent annually.”
Red meat is in some form of case-ready format in most stores, says David Fiedler, vice president of Oak Brook, IL-based Vector Packaging Inc. And more case-ready products continue to enter the meat case, points out Jerry Kelly, national coordinator, retail task force, for the Cryovac Food Packaging division of Sealed Air Corp.
“The most recent research we [participated in], the 2004 National Meat Case Study, indicates an eleven percent point gain in case-ready products in the fresh category,” he adds. “This includes beef, ground beef, pork, chicken, turkey, lamb, and veal.  It went from forty-nine percent of the packages up to sixty percent [from the 2002 to 2004 study].”
The list of retailers and processors leading the case-ready charge is equally impressive. Tyson Foods, Smithfield Foods, and Cargill Meat Solutions are the largest suppliers of case-ready product, Keith says. And other processors such as Swift, American Home Foods, Farmland Foods, and Shapiro offer significant programs.
“Besides Wal-Mart, the leading retailers offering case-ready meat are Kroger [including King Soopers, Ralphs, etc.,] Albertsons, Safeway, Ahold USA, Pathmark, Cub Foods, Tops Markets, Miracle Mart, Loblaw’s, Wakefern, Super Target, and Ukrop’s,” Keith says.
Case-ready red meat was initially driven by labor shortages, Keith contends.
“In many markets, there were simply not enough meat cutters to keep cases stocked,” he adds. “Then Wal-Mart adopted [case ready] as part of a business model for its Supercenters causing a huge surge in growth. Now the market is being driven by Wal-Mart sales growth and the gradual transition by other retailers. It’s possible, even likely, that another retailer will decide to make an accelerated changeover within the next five years, which would give the market a huge boost.”
Case-ready pioneer
After several years of selling case-ready ground beef and poultry at its Supercenters, a March 2000 Wal-Mart news release relayed that the company was expending its case-ready meat program to 180 Wal-Mart Supercenters and Neighborhood markets in six states. Wal-Mart further relayed it would begin selling case-ready pork at all Supercenters by the end of 2000. Since that time, positive customer response resulted in Wal-Mart expanding its case-ready fresh meat product line to all Supercenters and Neighborhood stores.
“This technology, introduced by the meat industry, helps streamline distribution and reduce the time it takes for products to move from the manufacturer to the customer,” Wal-Mart explains on its Web site. “This is consistent with other initiatives in place at Wal-Mart that help us pass additional savings on to our customers. In addition, case-ready meat provides Wal-Mart customers selections that have enhanced quality control, leak-proof packaging, better overall appearance, and better tracking of product.”
“Case-ready meat is simply becoming the best way to deliver quality at an everyday low price for our customers,” said Lee Scott, president and chief executive officer of Wal-Mart Stores Inc., on March 3, 2000. “It offers the straightest line of distribution to ensure the best possible product.”
Traditional supermarkets are notoriously slow to make changes in virtually every facet of retailing, says Fiedler, who agrees that Wal-Mart has been the main driver of case-ready growth to date.
“Wal-Mart continues to lead the way, and it has pushed its suppliers to continue to improve their products and deliver lower costs,” he adds. “The cross-over point in overall cost of production is getting much closer to forcing the move to case ready. Some chains want the ‘made in the back room’ look, or consider themselves to be the ‘Anti Wal-Mart;’ this approach will disappear as the cost of case ready gets to the point of being lower than back-room cutting and packaging.”
Other retailers are also sold on the case-ready concept. In fact, one smaller niche chain recognized the case-ready advantage before Wal-Mart did.
“Our fresh-meat case is as near to one-hundred-percent case-ready as you can get,” says Alan Warren, director of meat and seafood for Richmond, VA-based Ukrop’s Super Markets Inc. “The only reason it isn’t one-hundred percent is that we do some special orders so there might be some store-cut products that find their way into the case.”
Ukrop’s made the commitment to case-ready red meat nine years ago.
“The reasons are numerous [for Ukrop’s move to case ready], but the main reason was for consistency of product,” Warren says. “You have a much better opportunity to have better cutting specifications in one meat room versus twenty-nine meat rooms. Also, it allows us to set our cases up each morning in a hurry. Our goal is to have the cases completely set by 8 a.m. each morning. We get daily deliveries from our central cutting facility. Stores get the deliveries early in the morning. It’s in their cooler before they get to work.”
Brands of case-ready red meat carried by Ukrop’s include Ukrop’s Own Beef and Ukrop’s Own Pork. It also carries case-ready Australian lamb that is processed at Ukrop’s central cutting facility. And it also offers Franconia, PA-based Marcho Farms Premium case-ready veal.
“We’re unique in that we have our own Ukrop’s Own Beef thanks to a partnership with PM Beef,” Warren says. “The beef is raised to our specifications, and it’s got all the bells and whistles — full traceability, it is processed verified by USDA, and all of the beef cattle are raised on small ranches where additional care is taken. Vitamin E is fed to the cattle, which yields a better color. We also have a premium beef program with Certified Angus Beef.
“Our pork program is similar to the beef program,” he adds. “Again, it is process verified, and our partner is Premium Standard Farms.
Some retail food chains, however, don’t offer case-ready.
“Costco has no fresh meat that is case ready,” points out Charlie Winters, vice president of fresh meat operations for Costco Wholesale, Issaquah, WA.
“What has made us so successful is the product we’re cutting for our members — and  not pre-packaged goods,” said Andy LaRose, regional meat/service deli supervisor, Midwest Region, Oak Brook, IL, in an article honoring Costco as Meat & Deli Retailer’s 2003 Meat Retailer of the Year. And the number of fresh-meat products offered by Costco makes it more manageable for Costco meatcutters to handle.
“We offer only forty [fresh meat and poultry] items — not one-hundred and forty,” LaRose said.
“We concentrate on the top-ten items in the meat department, “ Winters said about the company’s strategy of not offering all things to all people. “I’m sure there’s no one else in the country that comes close to our volume in boneless loins, tenderloins, and New York strips. We’re very big users of loin and rib meat; that’s what our members want.”
Holiday Quality Foods, Cottonwood, CA, is an upscale niche marketer — a 23-store chain that serves communities in the northern end of California, up and down the Sacramento Valley, and in the surrounding Sierra Nevada Mountain area. The only case-ready red meat products it offers are MAP Atkins Ranch lamb products.
“[As an upscale niche marketer], we want to keep meat cutters on duty because one of the biggest things we want to offer our customers is friendly service,” says Dave Parrish, meat director, Holiday Quality Foods. “And we want to have somebody there who can help shoppers with a selection, who can special cut an order for them or help them with a cooking idea.”
Supply side
There are many reasons why case-ready products continue to find success at the retail counter, says Kevin J. Lage, case-ready brand manager, Cargill Meat Solutions, Wichita, KS.
“Competitive strategy, single-order management, food safety, labor shortages, and shrink reduction are just some of the factors that retailers are faced with and find solutions within case-ready to drive bottom line sales increases,” Lage says.
Cargill Meat Solutions operates six U.S. based plants and two Canadian-based plants that produce beef, grinds, pork, veal, chicken, value-added, and ready-to-cook case-ready products.
“The two dominant requests from Cargill customers are case-ready solutions that will first drive sales — and second, decrease costs,” Lage says.
Cargill Meat Solutions finds its competition very singular in their approach and variety of product offerings, like a commodity boxed beef or boxed-pork sell, Lage relays.
“Cargill Meat Solutions takes a consumer-focused approach to case-ready solutions,” he says. “We strongly believe that successful case ready needs to be treated like a sales program offering consumer-centric products coupled with shared score cards and point-of-sale data management services to measure success at the consumer level.”
American Foods Group, Green Bay, WI, offers further proof supporting the continuing growth of case-ready red meat.
“It is definitely growing,” says Mike Zimmerman, director of case-ready operations, American Foods Group. “More retailers are understanding the economics and expense of the meat department — that is, what it truly costs to produce meat at store level. By knowing and understanding those costs, you can make an intelligent business decision.”
American Foods Group offers case-ready beef, pork, lamb, and veal, which includes cuts, grinds, patties, seasoned, tumbled, enhanced, and marinated. It also produces the same products for many of its foodservice customers. Case-ready systems employed by the company include low-oxygen, high-oxygen, or no-oxygen systems in over-wrap, lid seal, vacuum pac, roll stock, in-the-bag programs, chubs, and boxed.
Knowing the cost of store-produced meat (or at least a fairly close estimate) and the comparison of a true-known cost of goods with case ready allows retailers to put their category business plan together, Zimmerman says.
“Without this information, you cannot make an intelligent business decision,” he adds. “We have seen case-ready programs with retailers fail because the business plan was not put together prior to taking on case ready. Case ready is a valuable business tool. Knowledge is power.”
In the past, some retailers told Zimmerman that cutting their own meat was their major point of difference compared to fresh meat offered by the big-box stores.
“I have never agreed with that, and others are also changing their stance,” he says. “The real difference is the people servicing the customer, not who produced the meat in the counter. If you can display a quality case-ready product, does the consumer really know or care who cut it? I don’t think so, but what they will remember is now they can talk to Joe the butcher because he now has time to spend with customers. Joe is no longer tied up in the back room cutting or gone by 1 p.m. because he came in at 5 a.m. to cut that meat.”
Some retailers do not have a sufficient meat staff to operate a traditional meat department, and some retailers are opening new formats designed not to have meat cutters. Case-ready can address both issues, Zimmerman relays.
“American Foods Group’s case-ready business is growing due to the way we conduct our business,” he adds. “We are centered around customer partnering. Typically, we meet with a retailer, discover their needs, and build a program based around those needs. We realize that we both must remain profitable, and that we basically become the retailer’s meat department. Given that, we realize that we need to create a seamless program that satisfies the retailer, but more importantly the consumer. We are staffed with former retailers who understand how important this is.”
When asked what his customers are looking for in case-ready red-meat packaging, Zimmerman answers: “Most traditional retailers want an exact replication of current back room look while others want fool-proof packaging.”
Whether it be vacuum packaged or modified-atmosphere packaging (MAP), the case-ready meat category continues to grow as consumer acceptance of new-technology packaging and the demand for convenience expand, says Mel Coleman Jr., chairman, Coleman Natural Meats Inc., Golden, CO.
Coleman’s case-ready meats include a variety of beef cuts, an offering of grinds, patties, and hot dogs. Its case-ready lamb selections include butterflied legs and a four-rub pack.
Obstacles to overcome
Keith relays that as long as 30 years ago and as close as 10 years ago, many in the packaging and meat packing industries anticipated that most of the meat case would have converted to case ready by now.
“This has been a huge disappointment for them,” he adds. “However, they greatly underestimated the obstacles that retailers would have to overcome. Those retailers who were the leaders in case ready did not always clearly see the benefits, and those who waited were often able to compete successfully with conventional, in-store meat packing.”
The key problems holding case ready back were a combination of:
• Organized labor resistance
• Inability to measure labor on shrink reductions and sales increases to pay back higher product cost
• The difficulty of making the transition to the point of economic feasibility
“Those retailers that successfully adopted case ready had management that accepted case ready as an article of faith, as a better way to do business — and they stuck it out through the difficult transition,” Keith says.
In the beginning, the equipment used to make the packages, the films used, and the distribution systems all needed to improve — and all continue to do so, says Vector Packaging’s Fiedler.
“Many companies invested in machinery that didn’t work very well,” he continues. “Second- and third-generation machinery is moving forward to replace earlier systems. These provide higher speeds and superior performing and looking packages. Films have improved dramatically to make clearer, stronger, and faster-running packages. Distribution from a far greater number of centralized distribution centers has helped control costs. All of these factors are contributing to case ready’s ongoing growth.”
Private-label solutions
Except for Wal-Mart, most case-ready meat is private label — in fact, actually no label, so it looks the same as store-packaged meat, Keith says.
“Traditional retailers have long resisted giving up perceived advantages of having better meat than their competitor,” he adds. “Carrying the same brand as a low-cost competitor like Wal-Mart is even less appealing. Wal-Mart has long competed successfully with national brands, and it is quite happy to have them in meat. The branded part will grow faster as retailers and consumers begin to see the benefits of consistency and improved products.”
Private-label case-ready growth continues. Abertsons kicked-off its new Blue Ribbon Beef (Select) program at its Chicago Jewel stores in 2004, says Cryovac’s Kelly.
“It’s in all of the Albertsons stores — Jewel, Acme, and I’m sure it will be in Shaw’s,” he adds. “Then they introduced their Steakhouse Choice Premium Angus Beef program to offer a Choice beef product. Right after that, Safeway, which owns Dominick’s in the Chicago area, introduced its Rancher’s Reserve Angus Beef throughout the country. These are examples of two major retailers that have introduced their own private-label programs just in the past year.”
Blue Ribbon Beef includes a wide range of high-quality roasts and tender-aged steaks that are “guaranteed twice” to meet their satisfaction. This brand is being marketed under the brands Albertsons Blue Ribbon at Albertsons stores, Jewel Blue Ribbon at Jewel/Osco stores, and Lancaster Blue Ribbon at Acme stores.
Steakhouse Choice Premium Angus Steaks are aged naturally and guaranteed twice, as well. If not satisfied with their purchase, shoppers will get a refund plus can replace their Steakhouse Choice cut with another free of charge.
Rancher’s Reserve Angus beef includes sirloins, T-bones, and other cuts.
Target now offers Archer Farms private-label meat products, but most of the case-ready red meat growth is coming from branded companies like Tyson, Hormel, Cargill, and Smithfield Foods, says Phil Ryan, Cryovac’s senior director of marketing and strategy for case-ready laminates and ready meals.
Case-ready packaging
MAP lidded trays and overwrapped trays each account for a little less than half of all case-ready packages, Keith says. The remainder is vacuum packaging, including ground-meat chubs.
“The market for case-ready meat is growing at a slow pace, but growing year on year,” points out Peter Mellon, president of Canton, MA-based Reiser.
Case-ready technology providers are doing their part to help spur category growth. Reiser offers two new pieces of equipment for case-ready packaging. Its Vemag ground meat portioning system for net weight packs features speeds up to 100 portions a minute with minimum give-away. And the Ross Inpack S90 high-speed tray sealing machine produces hermetically sealed packs from pre-formed trays in both high O2 and low O2 formats. The machine can run at speeds of up to 100 packs a minute, and tooling sizes can be changed in approximately 15 minutes for maximum flexibility.
Another case-ready packaging technology leader is Kansas City, MO-based Multivac Inc.
“We see the market for case-ready continuing to grow,” says Bob Koch, director of sales, food division, Multivac Inc.
One of Multivac’s recent developments, FormShrink, serves this growing demand by giving processors the ability to shrink-packaged products, such as chub sausages, beef roasts, hams, and even whole chickens, using an automated rollstock system instead of pouches. Along with FormShrink, Multivac has also introduced a new mid-range traysealer, the Multivac T350.
“This system provides the speed and efficiency of an automated traysealer at a price that is affordable to smaller processors,” Koch says. “With case ready growing the way it is, small and mid-size processors have the opportunity to grow their businesses at a rapid clip provided they have the tools to do so.”
One of Cryovac’s newest products for case ready is its Lid 1051printed lid film.
“It’s a multi-layer barrier shrink film that’s adhesively laminated to a biaxially oriented polyprolylene — BOPP,” says Cryovac’s Ryan. “Its features include clarity; package tightness, or shrink; and anti fog — the ability of the package to go through the cycles in the meat case and deal with temperature change and the moisture that changes inside the package and still maintain good clarity.”
Cryovac’s Darfresh vacuum skin packaging system was introduced in Europe years ago, but has been emphasized at trade shows in the last two years. Multivac is Cryovac’s equipment partner on Darfresh worldwide.
“It gives high shelf life — it’s a barrier vacuum-skin package — and it also results in excellent product. It’s fully dimensional because it wraps itself around the product. The Darfesh format is available either on a semi-rigid bottom or pre-made tray and primarily used for whole-muscle product.”
Vector Packaging offers Fresh Wrap™ film, which is used with machinery and trays that feature a heat seal along the edge of a plastic or foam barrier tray. Fiedler says that Fresh Wrap’s advantages are:
1. Very high line speeds
2. Very high seal strength
3. Superior clarity and anti-fog properties
4. The ability to print without sacrificing the tight, domed appearance of an unprinted package
Vector also offers Chub Pack film for fresh 5, 10, and 20-pound ground-beef and ground- turkey chubs.
The future
Case ready will continue to grow rapidly, but in-store packaging will still maintain a significant presence for the next five to 10 years, Keith predicts.
Case-ready products are poised to continue on an ever-steepening growth curve. Consumers desire consistency, selection, and convenience at a value, says Lage.
“While there are many ways for retailers to strip costs from their operations, most have a detrimental effect on the consumer — whether it is product consistency, selection, or convenience,” he adds. “Case ready enables retailers to focus on those backroom products in which they have an identity and are perceived by their customers as ‘the’ destination for that product or products.”
Case-ready continues to be driven largely by retailers, says Multivac’s Koch. The ability to extend shelf life using MAP is obviously very attractive to them, he adds.
“For their part, consumers seem to be responding well to the neat, consistent packaging they see with case-ready,” Koch says. “Introductions of new prepared entrées and other convenience foods are likely to continue as well, which will only expand the market for case ready.”
“As food-safety issues dominate our industry, we believe that more and more retailers will look to major meat packers to centrally pack meat in hermetically-sealed packs and send them to the store case ready,” adds Reiser’s Mellon.
Case-ready red meat is still in its infancy, reflects Mel Coleman Jr.
“The benefits of new technology, extended shelf life, and reduction of shrinkage and labor costs will contribute to continued growth,” he says. “The variety, flexibility, and convenience of case-ready meats will appeal to more consumers as the variety of options grow.”
“We predict that this segment of the market will continue its steady growth, expanding into more chains and a broader number of products and stores,” says Vector Packaging’s Fiedler. “We believe that the equipment, film, and distribution systems will continue to improve, and the overall use-cost will be lower than the overall use-cost of traditional back-room methods due to the reduced handling, improved shelf life, safer products, fewer returns and recalls, and product appearance that the public will continue to consider premium and of higher quality.” NP