The Power of Meat 2016 An in-depth look at the meat department through the shoppers eyes

Transcription

1 Brought to you by: The Power of Meat 2016 An in-depth look at the meat department through the shoppers eyes Presented by: Anne-Marie Roerink Study made possible by: The Power of Meat

2 Meat = prime differentiator 60% of shoppers name a supermarket as their primary channel for meat High primary shopper conversion (86%) High secondary shopper pickup from supercenters Profit leaders focus on fresh Higher sales derived from produce, meat and deli Along with higher margins Greater inventory turns Lower shrink The Power of Meat 2016 Independent Grocers Financial Survey

3 As goes meat, as goes the basket Largest fresh department 17-25% of total store sales $300 spend per household per year Lucrative: a basket builder Important to protect meat purchase for total store success Growing: outpacing total store $ growth vs. lbs. and identifying pockets of growth Inflation vs. deflation Fresh meat $50B 2015 $ 97% HH penetration +4.5% 2015 $ growth +0.7% 2015 lbs growth FMI The Power of Meat 2016 Source: IRI, 52 weeks ending 12/27/2015 3

4 2016 versus 2015: an upside down world Dollars Pounds % +0.7% 2016* 0.0% +3.1% * 52 weeks ending June 26, 2016 The Power of Meat

5 But some big winners too Conventional Value-added Natural Organic $ lbs -1.2% +1.4% +18.3% +27.7% +2.0% +3.1% +19.7% +26.3% First half 2016: 0.0% in $ +3.1% in lbs The Power of Meat 2016 Source: IRi Freshlook w/e 06/26/16 vs Yago 5

6 The Power of Meat 2016 Consumer survey among 1,400 shoppers 11 years and running Updates on long-standing trend lines New topics Real-life overlay Insights into the entire path to purchase The Power of Meat

7 Transparency and traceability Provenance Natural/organic MEGA TRENDS INFLUENCING THE MEAT PURCHASE The Power of Meat

8 Label claim growth in the past 5 years $ CAGR Unit CAGR Organic 30% 23% Hormone/antibiotic presence 29% 25% Natural 27% 22% Vitamin/mineral presence 15% 8% Preservative presence 13% 9% Saturated fat presence 12% 5% The Power of Meat 2016 Source: Nielsen, Total U.S. Food,

9 So many claims or data points The Power of Meat

10 But it is the story that sticks Event execution: National Beef Stampede winner In-store experience Award winning Animal welfare The Power of Meat

11 Local, country or import The Power of Meat

12 Price versus USA Choice: domestic vs. imported Price> Country of origin Willing to pay a little more for U.S. Willing to pay significantly more for U.S. All 42% 54% 4% Willingness to pay more for USA rises along with age and income 63% 60% Boomers High-income The Power of Meat

13 The story may be branded programs % of packages in the meat case in 2015 Supplier brand Private brand No brand % 22% 33% % 51% 4% The Power of Meat 2016 Source: Sealed Air National Meat Case Study

14 Long-term rise of brands fresh Supplier brands Private brands No preference 2007: 71% 2010: 74% 2016: 25% 2016: 21% 2016: 54% 2007: 16% 2012: 12% 2007: 13% Preference when purchasing fresh meat The Power of Meat

15 Long-term rise of brands processed Supplier brands Private brands No preference 2012: 63% 2007: 37% 2016: 40% 2007: 53% 2012: 25% 2016: 18% 2016: 42% 2007: 9% Preference when purchasing processed meat The Power of Meat

16 Mega trend: Natural and organic The Power of Meat

17 Considerable uptick in availability % of total packages 2004: 22% 2015: 38% 2004: 0.2% 2015: 3.8% Prices for organic rising fast: Organic: +9.6% vs. Conventional: +5.2% The Power of Meat 2016 Source: Sealed Air National Meat Case Study 2015 & Nielsen 17

18 Continued growth for natural/organic meat & poultry Purchased natural and/or organic meat/poultry? (in past 3 months) 68% 20% 48% 40% Intent upcoming year 28% plan to spend more 66% about the same 6% less Purchased Did Not Purchase The Power of Meat

19 Determination pre-trip or in-store Promotional research Circular trends PRE-TRIP PLANNING WELL-RESEARCHED LIST ITEMS The Power of Meat

20 Majority decides on meat/poultry items at home At home In the store Behavior varies 47% 36% 17% Millennials 41% 33% 26% Boomers 52% 39% 9% Power of Meat

21 Meat/poultry promotions remain important 78% Check meat/poultry promotions at primary protein store: 39% Every time 39% Sometimes 11% Hardly ever 11% Never 59% Check meat/poultry promotions across stores: 18% Every time 42% Sometimes 22% Hardly ever 19% Never Power of Meat

22 Paper circular still on top; but big gains in digital 2016 Change vs. Millennials Boomers 2015 Paper circular at home 63% 43% 76% Paper circular at the store 51% = 49% 54% In-store only promotions 39% 47% 37% Electronic circular 26% 31% 23% Special digital meat promotions 24% 30% 22% Smartphone in-store 16% N/A 25% 9% Store app 14% = 24% 5% The Power of Meat

23 Purchasing decision tree Meat case versus full-service counter Packaging innovation PURCHASING DECISION HIERARCHY CHANGING The Power of Meat

24 Renewed dominance of price Price/pound Total package price Appearance Nutrition Prep. knowledge Prep. time/ease The Power of Meat

25 Price/pound Package price Appearance Nutrition Prep. knowledge Prep. time/ease The Power of Meat

26 Price per pound has universal, long-standing appeal, but interest in total package price rising 4.4 Price per pound 6-item ranking scale Importance rises along with Age (Millennials: 4.0 Seniors: 4.8) HH size (Singles: people: 4.5) 4.2 Total package price Dominant factor for Millennials & singles Impacting package size variety, fixed weight packages and price ceilings The Power of Meat

27 Preparation knowledge marginal at best > 50% manage but no expert or need help Cooking fresh product Marinating, seasoning Discerning quality and freshness Nutrition Wine pairing/meal creation >70% of Millennials The Power of Meat

28 Don t know? Digital research >> Mom Digital Family/friends Cook book Meat associates Just try 41% Websites: 36% Social media: 5% 25% 13% 7% 5% The Power of Meat

29 Interest in how to Would absolutely use 29% 49% Would maybe use 54% 42% Would not use 17% 9% The Power of Meat

30 Preparation knowledge/time will increasingly influence the meat department Prep. knowledge Prep. time Millennials Convenience meats Meat as ingredient versus center-of-plate Muscle cuts versus quick items Cooking instructions/recipes More help/advice The Power of Meat

31 Home-cooked meals containing meat/poultry Meal trends Heat-and-eat and ready-to-eat Value-added meat MEAT CONSUMPTION & PREPARATION The Power of Meat

32 Home-cooked is in, but how about meat? Eating out Takeout Home cooked Home cooked Home cooked Home cooked Home cooked 3.7 contain meat/poultry Greater variety of and switching between proteins $ +2.1% +2.3% -4.2% -5.4% +5.6% Lbs +2.9% +3.3% +6.1% -3.7% +6.9% The Power of Meat

33 Being part of the solution Recapture fresh meat opportunity as centerpiece of home dinner occasions Develop quick/simple preparation opportunities for oven, stove top and slow cooker Get in front of the case Education of millennials drives purchases Use CRT beef to save production time Redeploy hours to sales floor The Power of Meat

34 Shoppers take to convenience solutions Ready-to-eat 2016: 82% Heat-and-eat 2016: 79% Value-added 2010: 68% 2010: 60% % buying 1+ time/year 2015: 32% 2016: 50% The Power of Meat

35 Combined with a rise in consumption frequency Ready-to-eat 2016: 47% Heat-and-eat 2016: 52% 2010: 33% 2010: 29% % consuming at least once a week The Power of Meat

36 Value-added is a promising segment Buy? 28% Sometimes 9% For special occasions 8% Only in a time crunch 50% Hardly ever/never User profile signals careful consideration at the store-level

37 Department score card Shopper suggestions on improvements IMPROVING THE MEAT DEPARTMENT The Power of Meat

38 Meat department scores highest in cleanliness Average satisfaction Cleanliness The freshness/appearance Overall trip experience In-stock availability Variety of package sizes/cuts Prices Friendliness/knowledge of staff Staff availability Very strong attributes Opportunity The Power of Meat

39 As the hours tick by Variety In-stock position Cleanliness Service Appearance Trip satisfaction Trip spending Willingness to recommend Keeping department conditions up important for department and store financial success Staff for when your customers are shopping The Power of Meat

40 No greater detractor to satisfaction than lack of cleanliness Overall trip experience CLEANLINESS Willingness to recommend Average basket All $ $24.38 The Power of Meat

41 What do shoppers mean by cleanliness? Clean aprons, in fact, clean white aprons The Power of Meat

42 What do shoppers mean by cleanliness? Hats, hair nets, gloves and good personal hygiene gloves The Power of Meat

43 What do shoppers mean by cleanliness? Bags, hand cleaning stations and wipes The Power of Meat

44 What do shoppers mean by cleanliness? Packages that are not leaking/bled through >Half would rather buy Leak-proof Freezer-ready Resealable The Power of Meat

45 What do shoppers mean by cleanliness? Clean refrigeration equipment Other comments Being able to see the backroom Lack of clutter Good organization The Power of Meat

46 On the other hand, item and package variety has greatest ability to drive satisfaction VARIETY OF PACKAGE SIZES/CUTS Overall trip experience Willingness to recommend Average basket All $ $28.00 The Power of Meat

47 What do shoppers mean by variety? Package sizes Species/cuts Claims/attributes The Power of Meat

48 Employees can be a great loyalty driver Received help/suggestions Did Did not Used Service counter Did not use 62% 43% 59% 41% 19-point swing in very satisfied 18-point swing in very satisfied The Power of Meat

49 Leveraging the service counter advantage 76% Have access to a full-service counter at primary meat/poultry store; 27% use counter exclusively 97% Use meat case; average of 70% selected from case 38% 62% 17% 83% 83% Believe case-ready is just as good or better Not as good Equal/better The Power of Meat

50 What do shoppers mean with good service? Having available, friendly and knowledgeable staff The Power of Meat

51 What do shoppers mean with good service? Introducing the managers/wearing name tags Get in front of the case: educate and sell Only 7% of customers currently look to the butcher for advice Staff for when your customers are shopping your store The Power of Meat

52 What do shoppers mean with good service? Offer to break packages/provide custom cuts Cut-to-order event The Power of Meat

53 What do shoppers mean with good service? Education on types of cuts, uses, and preparation Beef and Pork cutting charts State Beef and Pork councils The Power of Meat

54 What do shoppers mean with good service? Recipes, meal suggestions, meal stations The Power of Meat

55 Satisfied shoppers higher spending & more loyal Long-term relationship: Repeat purchasing Resist lower-priced competitors The Power of Meat

56 In closing Success starts and ends with meeting shopper needs The Power of Meat: One size fits no one In-store experience is crucial Staff for when your customers shop your store Execute the basics Cleanliness, service, quality, consistency Create differentiated offerings Tell your story Redeploy labor from production to selling Get in front of the case Be the Meat Destination in your market The Power of Meat

57 Visit us at our booth: 525 Top 10 handout For questions or additional information The Power of Meat 2016