Hooked on Labels
September 1, 2005
Hooked on Labels
By Richard Mitchell
A study on the effectiveness of on-pack labels reveals significant shopper interest in meat packages that also contain cooking instructions and recipes.
The question of whether on-pack labels are effective in the merchandising of meat and poultry has long been debated in marketing circles.
While proponents say the addition of recipes or cooking instruction to packages will entice more shoppers to sample different cuts, or generate additional purchases by demonstrating new ways to prepare familiar meats, detractors stress that labels add clutter to film and make it more difficult for consumers to judge the quality of products.
And though the debate continues, a recent consumer survey indicates that labels may indeed have a positive impact on buying behavior. A 10-week study conducted earlier this year by the Centennial, CO-based National Cattlemen’s Beef Association (NCBA) on behalf of the Cattlemen’s Beef Board (CBB), the Clive, Iowa-based National Pork Board (NPB), and New Kensington, PA-based Yerecic Label, found that sales of meat increased significantly when labels were affixed to products.
Beef revenues were up 2.9 percent; sales of pork grew 3.9 percent; chicken revenues increased 3.5 percent; and veal sales ballooned 5.3 percent.
The latest research was the second phase of a Protein Labeling Study, which began in April 2004 with six focus groups discussing label attributes. The most-recent initiative included in-store interviews with 200 shoppers, and the tracking of sales of labeled and unlabeled meats.
During the research, two unidentified regional chains in the West and central U.S. marketed meat without labels in some locations, while attaching the information stickers to identical products in other stores.
Labels were applied to 14 varieties of beef—including steaks, ground beef, and pot roasts—five types of pork, and all available veal items, and they were customized for each retailer. Signage at the meat case educated consumers on how to access the information on the labels. The same promotional tools, such as advertising circulars, were used at all sites.
Each of the “Easy Fresh Cooking” labels feature cooking instructions and a recipe, along with a photo on the front of the finished recipe. Consumers peal back the facing on the triangular design to access the data, and are able to reclose the labels after viewing.
Randy Irion, NCBA director of retail marketing, says the main obstacles to merchant acceptance are the costs associated with purchasing the labels and having employees attach the materials to packages, and the prospect of alienating consumers by covering up portions of the meat. Yerecic Label is selling the labels for between 1 and 1.5 cents, based on quantity.
“The sales increases from using labels and the positive feedback from consumers will negate retailer concerns,” Irion predicts. “There is almost no one who can’t justify higher labor, or label costs, to achieve this dynamic sales growth.”
Indeed, dollar sales during the test of beef roasts with labels were 5.8-percent greater than for unlabeled roasts. Revenues were up 2.4 percent for labeled steaks; ground beef sales increased 0.7 percent; and sales of beef ingredients jumped 3 percent.
Revenues for pork ribs increased 8.3 percent when labels were used, and pork chops and roasts each grew 1.5 percent.
In addition, sales of chicken drumsticks increased 5.3 percent when labels were affixed to packages. Thighs were up 5.1 percent, and breasts grew 0.4 percent.
The chicken breasts—as well as ground beef and steaks—had minimal gains because most consumers already are comfortable preparing those items, Irion says.
Other research found that 51 percent of shoppers like having a label on meat because it provides them with new cooking ideas; 46 percent of respondents indicated that the information on labels is likely to entice them to purchase new or different types of meat; and 25 percent noted that they were more likely to shop at a retailer with on-pack labeling.
Forty-three percent of consumers also said the information from the labels will help them decide how much meat to buy; 41 percent noted that they were likely to prepare meat differently after reading the label; and 35 percent indicated that they were likely to purchase more meat items for a variety of meals.
“Consumers have said that the meat department is confusing because everything looks alike,” says Karen Boillot, National Pork Board director of retail marketing. “The labels are a good way to give them guidance.”
Rich Thoma, Yerecic Label vice president of sales, notes that about a dozen unidentified supermarket chains already use the labels, and that the survey found that consumers are willing to pay more for products with recipes and cooking instructions. Yerecic provides two-to-four different recipes on each roll of labels, and will introduce additional recipes each quarter to keep the information fresh, Thoma says.
“Using labels raised the shopper’s confidence level in their ability to cook some items,” Irion adds. “That is important because people no longer have the cooking skills that were common years ago.” NP
Richard Mitchell is editor of sister publication Meat & Deli Retailer.