December 1, 2005
By Richard Mitchell
With the holiday season in full swing, producers of turkey and ham have mobilized their efforts to increase marketshare
With Thanksgiving synonymous with turkey, suppliers of competing proteins simply do not contemplate the prospect of unseating turkey from its position as the traditional meat for the holiday. Yet, Thanksgiving, and to a greater extent Christmas and the right-around-the-corner Easter season, still offer large revenue-generating opportunities for producers in all protein sectors.
More households, for instance, already are embracing the newer and easier-to-prepare varieties of pork by serving ham in addition to turkey during Thanksgiving, and many consumers are making ham their prime Christmas meal. Ham, of course, is quite popular at Eastertime.
“After Easter, the December holidays provide our biggest sales lift,” says Karen Boillot, director of retail marketing for the Clive, IA-based National Pork Board (NPB). “Consumers will splurge during the holidays on gourmet and higher-quality products, such as spiral-sliced bone-in hams, which they might not buy for an everyday family meal. They provide retailers with the opportunity to sell more items that traditionally have a higher margin.”
FreshLook Marketing Group LLC, a Hoffman Estates, IL-based provider of scanner-based sales data on perishable products, reports that ham dollar sales for the two-week period starting the week before Thanksgiving were up 4.6 percent in 2004 compared to a year earlier after increasing 4 percent in 2003. Revenues grew 4.3 percent during the two-week 2004 Christmas period, and were up 9.5 percent in 2003.
Helping to drive sales is the greater availability and merchandising of spiral-sliced bone-in hams, Boillot notes. Consumers are gravitating to pre-cut spiral-sliced products because the hams are almost as simple to serve as boneless pork, while providing the flavor benefits of a natural whole-muscle ham, analysts say.
Boneless hams, which typically consist of a variety of muscles and pieces from bone-in products, usually are less tasty because they are heavily processed for consistency and shape.
“The National Pork Board previously distributed to consumers a complex diagram that showed them how to carve a ham because slicing was a big stumbling block to sales,” Boillot says. “People didn’t want to have to wrestle a ham into submission to get somebody a slice. But having suppliers doing the slicing has made the ham a lot more accessible. The products are being promoted heavily and more retailers are carrying a variety of flavor profiles and national brands so consumers have a choice.”
Revenues from spiral-sliced bone-in hams also are likely to grow because many potential customers still have not sampled the products, notes Jon Lewallen, director of marketing for the Lincoln, NE-based Ham Business Unit of ConAgra Foods Inc. The unit merchandises ham under the Cook’s brand.
“Most people have grown up with the cheap — and not particularly high-quality — boneless hams, and when they finally try whole-muscle bone-in items they are floored with how good they taste,” he says. “But sales of spiral-sliced ham are not as strong as for the traditional bone-in products because of the price issue.”
Indeed, spiral-sliced bone-in hams typically cost 20 cents to 60 cents a pound more than conventional bone-in items.
Spiral-sliced bone-in hams under the Cook’s brand are available in three flavors: Honey Cured with a Spiced Honey Glaze; Brown Sugar Cured with a Brown Sugar Glaze; and Maple. ConAgra markets Cook’s hams by supplying retailers with point-of-sale signage, and distributing holiday-oriented bone-in ham recipes to consumers.
Other producers also are developing more point-of-sale items for retailers. Smithfield, VA-based Smithfield Foods, for instance, will be furnishing merchants with signage and case dividers that feature “mouth-watering photography” of prepared ham dishes, says Eric Esch, director of marketing. Smithfield brochures, meanwhile, will include recipe ideas for leftovers.
“We’re going to attempt to do a much better job in providing point-of-purchase materials for the holiday ham season,” Esch says. “The goal is to catch the consumer’s eye and get shoppers thinking about having ham.”
Smithfield, he adds, also is evaluating the prospect of offering new ham products that emphasize taste and convenience.
“Ham certainly won’t displace turkey for Thanksgiving,” Esch says. “But there is growth potential, and if we can get more households to try a spiral ham, we’ll be able to hook them for the following years.”
Point-of-purchase displays also are a key holiday promotional tool for DeKalb, IL-based Prairie Grove Farms LLC. The producer, which is marketing its Ham for All Occasions line of pork, is providing retailers with shelf talkers and dollars-off coupons. Self talkers are signs that stick out from the meat case or rail strip and contain product information and pictures.
Prairie Grove Farms emphasizes in the materials that its hams are naturally raised without antibiotics or growth stimulants. The supplier strengthened its operations last year by forming an operating alliance with Wichita, KS-based Cargill Meat Solutions. Under the arrangement, Prairie Grove Farms raises the animals, and Cargill processes and distributes the pork. The parties then co-market the products.
The Ham for All Occasions line features four hickory-smoked offerings: Halved Spiral-Sliced Ham, Boneless Deli Ham, Quartered Boneless Deli Ham, and Quartered/Sliced Boneless Deli Ham. The products are being marketed as versatile choices for holiday brunch or dinner that can be accompanied by a variety of wines because the items straddle the line between light and dark meat.
Carol Mueller, Prairie Grove Farms director of marketing, says the company’s hams are premium items that are geared for the holidays. “The bone-in spiral cut provides a nice presentation for special occasions,” she notes.
With more pork producers upgrading their offerings and positioning ham as a viable holiday alternative, it is essential that turkey suppliers also enhance their products and marketing if they are to maintain — or grow — their share of holiday sales, analysts say.
The Washington, DC-based National Turkey Federation (NTF) reports that turkey is the main meal for 98 percent of households at Thanksgiving, and that 45 million turkeys will be eaten during that holiday, as well as 22 million at Christmas. The figures have remained constant for several years, says Sherrie Rosenblatt, NTF senior director of marketing and communications.
She notes that it is important for producers to provide additional choices, because “there no longer are cookie-cutter consumers. People have different values and are looking for variety and choice, including fresh, frozen, marinated, and natural turkeys.”
Jennie-O Turkey Store LLC is among the suppliers already promoting new products this holiday season. Willmar, MN-based Jennie-O last fall introduced its Oven Ready Turkey, which features a cook-in bag that enables users to directly transfer the whole raw bird from the freezer to the oven. The procedure is designed to enhance convenience and food safety by eliminating thawing and handling of the turkey.
This year Jennie-O is offering two extensions to the line: Bone-In Turkey Breast and Boneless Turkey Breast. The new products, which were scheduled for release in late September, are available in Homestyle flavor.
Chuck Meath, Jennie-O vice president, whole branded turkey sales, says the items are targeted at consumers between 25 and 45 years of age who don’t have the knowledge or interest to learn how to thaw and prepare a turkey from scratch. All the Oven Ready Turkey products are designed to make it more convenient for consumers to prepare holiday meals, Meath says.
“The turkey industry has to continue to own Thanksgiving and to make sure turkey is far and away the consumer’s choice of protein,” he notes. “There is competition [from other meat sectors] and while we don’t have to welcome it, we need to react by being proactive in coming up with innovative products.”
Meath says the Jennie-O turkeys also are intended to offer retailers “a significant positive margin versus the traditional negative margins experienced with the standard commodity products.”
New turkey varieties also are being marketed by Willow Brook Foods Inc. The Springdale, MO-based producer is offering a 4-pound to 5-pound turkey breast and wing drum product that is available in both raw and fully cooked versions, and a raw 8- to 10-pound roast that contains breast and thigh meat. The items will be available under the Willow Brook and Harvest Provisions labels, says Tom Collins, Willow Brook Foods’ director of marketing. Willow Brook also offers a 3- to 4-pound kettle-fried, single-lobe turkey breast.
“People still want the feeling of eating a traditional Thanksgiving whole bird, but they are not necessarily looking for the quantity of the past because gatherings tend to be smaller,” he notes. “Consumers want more portion control.”
Focus on convenience
Along with offering turkeys in additional sizes and flavors, suppliers also need to keep developing products that are easier to prepare, adds Dan Emery, vice president of marketing for Pittsburg, TX-based Pilgrim’s Pride Corp. and a member of the NTF’s marketing board. Pilgrim’s Pride’s chief holiday product is a whole turkey basted with butter. The producer is working to attract younger consumers by providing cooking instructions on both packages and its Web site and in materials distributed at the point of purchase.
“Everyone is fighting over the same crumb, and the company with the better angle will get the business, so you always have to look at doing something new,” Emery says.
He notes, however, that it is becoming increasingly difficult for producers of branded and premium products to compete with the commodity items being offered by lower-priced retailers, such as Wal-Mart Stores Inc., and merchants that position turkey as a loss leader. Some stores sell holiday turkeys for as low as 29 cents per pound, he says.
“The key as a turkey producer is to have less of a spike during Thanksgiving and to make the business more constant throughout the year,” Emery adds. “Companies have to be aggressive in marketing because someone is always after what you have in your backyard, and it must be protected.” NP
Richard Mitchell is the managing editor for Stagnito’s Meat & Deli Retailer magazine.