Meat Today’s Top 4 Consumers

We’ve all had this internal debate: do I really need to read this? Will it be helpful or just a waste of time? What am I going to learn that will be valuable?

If you’re in the meat business, knowing as much as you can about your customers can have a big payoff. In order to successfully reach consumers, you’ve got to have an understanding of who they are, right?

The challenge, of course, is that consumers keep changing.

These days, consumers of multiple generations and ethnicities are the new norm, and this mix is altering the way meat is being prepared and consumed. Because of this, the “one size fits all” approach to meat marketing just doesn’t work anymore. So, you’ll need to adjust your efforts accordingly.

There are four primary consumer groups who are making the biggest impact on meat consumption trends: Millennials, Boomers, Hispanics and Asian-Americans.

RMC Blog Image

1. Millennials

There goes the “M” word again! What piece of current research could ever be complete without a mention of this key generation? Millennials are an essential group of consumers to understand because they are imposing attributes and characteristics beyond meat itself – from how cattle are raised (organically grass-fed?) to where they’re from (local?). Members of this generation are avid smartphone users and highly value social connections. Their love of technology plays a large role in influencing the way they research, purchase and prepare meat.

2. Boomers

Don’t get all caught up in Millennials and forget about those Boomers! After all, they’ve got the buying power: this group buys more at the meat case than Millennials. Boomers tend to purchase meat as an entrée while Millennials treat it as more of an ingredient or a snack. (Learn more about meat’s changing role in our Protein and the Plate research.)  Members of this generation are interested in maintaining their health and view fresh meat as an important source of protein.

3. Hispanics

Consider them the big spenders. Although members of the Hispanic population tend to be fairly price-sensitive, they spend more on food than the average U.S. household due to larger family sizes. Meat is an essential component of the Hispanic cuisine. Consumers within this group are driving growth within the meat, particularly beef, industry. Although many within this segment are younger (60 percent are under 35), they consider shopping as more of an enjoyable social activity, rather than a necessary evil. Many like to walk the entire grocery store to find new products and tastes. Pre-cooked or semi-prepared meats are typically unappealing to Hispanics because they prefer cooking fresh products from scratch.

4. Asian-Americans

This is the fastest growing ethnic segment in the U.S., with a growth rate of 25 percent between 2009 and 2014. Like Hispanics, Asian-Americans favor fresh meats, with more than 60 percent cooking from scratch. Consumers within this group are likely to live in a multigenerational household. So, these shoppers aren’t just preparing meat to feed Gen Zs, Millennials and Gen Xers – there’s a good chance they’re serving Boomers and members of the Silent generation as well. These tech-savvy trend setters are major influencers on the new flavors and cooking methods that have recently begun appearing in restaurants and grocery stores throughout the U.S.

Armed with this information, you can make decisions that will resonate with your consumers’ needs. How will you be able to engage with such a diverse group of meat consumers? Here are a few ideas to get you started:

  • When targeting Millennials, consider connecting with their social lifestyle and appeal to their social and environmental consciousness
  • When reaching out to Boomers, focus on small package sizes and the importance of maintaining good physical health
  • When catering to the needs of Hispanics, offer family-size options and fresh meat cuts that complement their cooking style
  • When engaging with Asian-Americans, provide flavors and fresh meat cuts that appeal to multiple generations

As the U.S. continues to shift into a more multigenerational and multiethnic-based culture, how do you think meat consumption will continue to change?

Please share a comment – we always love to hear from you!

NRA 2016 Top 5

National Restaurant Association (NRA) Show is a behemoth conference that is both exhilarating and exhausting.  It’s a good thing our Midan team members were up to the task of tasting their way through the maze of booths and sitting in on great educational sessions, to discover what’s trending in foodservice, especially meat.

Here are Midan’s top 5 takeaways:

1. Trust and Transparency are Tops.

Consumer trust is still elusive.  There is a bias against size and scale in agriculture, a perception that “big ag” and family farms do not share the same values.  Consumers think that large farms are more likely than small farms to put their own interests ahead of consumer interests. 

(Charlie Arnot, CEO, The Center for Food Integrity, A Clear View On Transparency: How It Builds Consumer Trust)

2. Local is Trendy, but Fuzzy.

This wariness of big farming has helped fuel the “locally sourced” trend.  Consumers want local because there is a lack of trust in our food system.  Consumers don’t trust big food or completely understand food labels, but they can comprehend and get behind “local” and they associate it with higher quality, even though there is no universal definition for local.

(Townsend Bailey, Director, Supply Chain Sustainability, McDonald’s USA, LLC, Where’s the Beef:  Eco-Protein Trends Explained)

FPL Food was an exhibitor at NRA 2016.

FPL Food was an exhibitor at NRA 2016.

3. The Story Matters. 

Consumers want to know and understand where their food comes from.  The exhibiting meat companies at NRA did a great job telling their unique stories, from FPL’s Georgia farming traditions to Meats by Linz’ investment in their own herd of registered Angus cattle to Niman Ranch’s pasture-raised hogs.

Restaurant menus are the new storybooks.  U.S. adults who will spend more at restaurants in 2016 than they did in 2015 will be reading menus and looking for:

  • Natural items – 54%
  • Sustainable items – 48%
  • Organic items – 47%
  • Seasonal items – 47%

(Stacy Glasgow, Consumer Trends Consultant, and Jenny Zegler, Global Food & Drink Analyst, Mintel, Consumer Trends in Foodservice and Beyond)

4. Premium is In.

Quality. Quality. Quality.  Every meat company did a brilliant job showcasing high quality products.  Gone are our post-recession days of cheap meat; quality is the new normal.

5. Fat is Back. 

Marbling reigned supreme in all of the meat companies’ exhibits!  Fat is back and it’s appreciated by discriminating restaurant operators who want flavorful options to wow their patrons.  From Superior Farms’ flavorful lamb bacon to Compart Foods’ dry-aged pork porterhouse, meat companies are focusing on fat.

6. Charcuterie is Hot.

Olli and Zoe’s Meats were two of many charcuterie companies showcasing their slow-cured meats.  Charcuterie remains one of the hottest meat menu trends.  Salami, anyone?

Get more insight into foodservice trends.

 

3 Steps to Get People Talking about Your Brand

This blog is the second in a series by Danette Amstein excerpted from a Brand Building presentation she delivered at NAMI’s Meat Industry Management Conference in April, 2016.

Even if you’re not a coffee drinker, it’s hard to miss the ubiquitous Starbucks on nearly every corner, or at least every few blocks.  Even small communities have a local Starbucks; they’re everywhere, right? Heck, now you can get your favorite Mocha Frappuccino at Target or the grocery store.  And the thing about Starbucks is, you always know what you’re getting.  Walk into any Starbucks from Seattle to Schenectady, and you can count on a consistent product.

Red umbrellaOnce upon a time, making a consistent, quality product was enough to be successful.  But in the 1950’s, consumer packaged goods companies like Procter and Gamble and General Foods realized that they needed to differentiate their products from “the other guy’s.”   Branding, or giving a product an identity that distinguishes it from nearly-indistinguishable competitors, was born.

Effective branding requires a keen understanding of the target consumer and a “brand proposition” that offers not only functional but also emotional value.  This is where Starbucks excels.  Their branding goes way beyond that coffee in the paper cup; many of their loyal followers have an almost cult-like attachment to the brand.  (Want proof?  They have over 35 million Facebook followers.)

So what does the average meat brand need to do to get that kind of love?

It all starts with a story.  Branding is storytelling at its best, with imagery and messaging that consumers can grab ahold of and buy into.  Of course, tangibles like name and logo are an important part of branding, but intangibles like a brand’s specific promise, personality and positioning do the heavy lifting – they all shape how you tell your brand story.  A good brand creates perceived value for consumers not only in the way that it stands out from others, but in the way that it stands for something in the mind of its target audience.  Just think about what these successful brands stand for:

  • Apple (Creativity)
  • BMW (Ultimate Performance)
  • Guinness (Crafted Irish Beer)

These are the kinds of key words, the words that differentiate a brand, that we want to own unaided.  Successful brands are very purposeful about what they want their target to think and feel without prompting.  Jeff Bezos, CEO of Amazon, boils it all down to one powerful statement:   “Your brand is what other people say about you when you’re not in the room.”

So if you are about to embark on a branding journey, here are a few pointers that can help give your brand story a happy ending:

  1. Write your brand story before you tell your brand story: Good branding strategies are clearly mapped out and documented.  Laying the brand groundwork takes lots of time and energy, but it’s the foundation for all brand decisions moving forward.
  2. Don’t start in the C-Suite: Lots of branding ideas sound great in the boardroom, but they need to be tested with a real-live target audience.  If your messaging doesn’t resonate with your target during testing, you’re sunk before you even launch.
  3. Do start with the end in mind: Think about what sets your brand apart.  What key words do you want your brand to own?

You want people talking about your brand when you’re not in the room, and incorporating these steps can help you shape what they’re saying.

Know other brands that are getting it right?  Please leave a comment or email me at d.amstein@midanmarketing.com – I always love your feedback!

Check out my previous blog, Brand Building: Finding the Sweet Spot.

Brand Building: Finding the Sweet Spot

IMG_9030 - DA at NAMI

Danette takes a selfie with attendees of her Brand Building presentation at NAMI’s Meat Industry Management Conference, April 5, 2016

Anyone who sells anything for a living has heard the old adage, “The customer is always right.”  This little nugget is more relevant than ever in today’s customer-centric economy.  Now that consumers have only to click a button to get products from kayaks to kazoos delivered to their door within hours, businesses that don’t focus on the buyer’s needs can’t survive or thrive.

Keeping your attention on the target consumer is critical, but it’s only part of the equation when it comes to another key factor in business success:  branding.   We all consume hundreds of brands every day:  Did you grab a coffee at Starbucks this morning?  Are you reading this blog on an Apple iSomething?  Will you drive home in a VW or a BMW?  In today’s uber-branded world, the challenge to brand effectively is daunting.  How do you tell your product’s story so that it stands out from others?

Even the meat industry is moving from commodity products to branded products.  And it brings very special challenges, because we aren’t selling coffee or computers.  We are dealing with a highly perishable, temperature-sensitive product for which we don’t control supply, input costs and, more often than not, the way it’s sold.

By its very nature, our product dictates that the meat industry has to tackle branding differently.

While widget companies might be able to adapt nimbly to new branding specs, meat packers and processors have production capabilities already in place, with heavy investments in capital, facilities, equipment and people.  The opportunity to upend your plant to produce a new branded meat product is slim (but if you are thinking about it…let’s talk!).

But those darn consumers…their needs are constantly changing, so you have to consider what they want and assess what you can produce profitably.  Where the overlap lies is your area of opportunity – your “sweet spot.”  It doesn’t matter if you develop an awesome brand that syncs with every desire of your target consumer if you can’t produce it in the black.

While overlaying consumer needs with a company’s core competencies might sound fairly simple, in reality it’s pretty messy.  You also have to determine your overall business strategy, evaluate the competition, develop brand positioning and create the visual language for the brand.  It’s not a linear process; you are constantly re-evaluating, revisiting and tweaking.

But the time and energy spent assessing where your customer needs intersect with what you can consistently produce will help you identify your “sweet spot.” When you do, set your sights on it with a laser focus, because it’s the foundation of a profitable brand.

Check out a new brand we recently helped a client build and launch.

If you would like to talk about building your meat brand and finding your “sweet spot,” give me a call at 704.664.MEAT or email me at d.amstein @midanmarketing.com.

AMC 2016 Top 10

As a team, Midan’s focus at AMC 2016 was to listen and learn.  We took pages and pages of notes, capturing stats, quotes and key findings.  Back at the office, we sifted through all the content and created our own long list of the most important takeaways.  Here’s what we think were the top 10.  If you were there, let us know if you agree.  If you didn’t attend, but have questions, please reach out – we love to share what we learned!

Midan_team_AMC_2016

Midan’s AMC 2016 top 10 takeaways:

  1. Forget the focus on a certain protein or cut — it’s all about application 
    • Consumers don’t buy meat; they buy what they can do with it. 57% of raw meat is purchased with a specific recipe/application already in mind. Give them ideas on what to do with your product and they will buy it. (Jack Li, Dataessential, Consumer Trends Driving Meat Innovation)
  1. Retailers have the opportunity to convert Millennials at the meat case
    • When buying meat, 64% of Millennials are open to being influenced at the store: 90% do not list a brand when meat shopping, 32% plan meat purchases, but decide at the store, and 36% make the entire meat purchase decision in-store. (Larry Levin and Chris Dubois, IRI, “Meat”ing Millennials!)
  1. Corporate Social Responsibility (CSR) factors heavily in Millennial decision-making
    • 87% of Millennials think business success should be measured by more than financial performance; they want to work for and buy from companies who are doing good things for society. (Andrew Winston, The Big Pivot, Doing Business in a Hotter, Scarcer, More Open and Connected World [2016 Deloitte Millennial Survey])
  1. There is a dramatic increase in consumers’ concern about chemicals in their food 
    • 36% of consumers said it is the most important food safety issue they considered when shopping for food, up from 23% in 2014. (Janet Riley, NAMI, Turning Up the Heat: Confronting Current Challenges to Meat Nutrition and Safety)
  2. Don’t forget about Boomers; they are responsible for greater spend overall on meat
    • Boomers purchase from the meat department 5 times more per year than Millennials, driving $2.3 billion in incremental sales. 78 million Boomers hold 70% of the disposable income and account for 50% of CPG sales. (Sherry Frey & Mikael Nielsen, Nielson, Polarized Consumers are the New Norm)
  3. Retailers and packer/processors who embrace digital are winning loyal followers 
    • 70% of consumers who get a quick response from companies on social media are more likely to recommend that brand to others. (Art Yerecic & Kristin Yerecic, Yerecic Label, Connect with Consumers at the Speed of Technology)
  4. Consumers are moving from ethnic buckets to more specific foods 
    • Consumers today are more interested in specific food items and their associated flavors rather than cuisines: not Mexican, but tacos; not Italian, but Chicken Parmigiana.  Food trucks have helped this trend grow. (Jack Li, Dataessential, Consumer Trends Driving Meat Innovation)
  5. The argument against GMOs has shifted from the fear of consequences to “consumers have a right to know.”
    • With respect to GMOs, consumers favor product information disclosure: 68% would like labels to indicate if a product has GMOs, but in 2015 only 1 in 4 consumers (26%) indicated that they would buy products with a non-GMO label. (David Fikes, FMI, Addressing Consumer Concerns with GMOs)
  6. The steady “drip” of adverse health news erodes consumer confidence in meat
    • The meat industry must counteract this with a flow of facts that gives consumers permission to eat our products.  Check out http://meatpoultrynutrition.org/ for a wealth of science-based information that can help do this. (Janet Riley, NAMI , Turning Up the Heat: Confronting Current Challenges to Meat Nutrition and Safety)
  7. What consumers look for on nutrition labels is changing
    • Shoppers will be paying more attention to serving size, calories, carbohydrates, sugar content and iron, while focusing less on fat, calcium, cholesterol, sodium and vitamins. (David Portalatin, NPD, The State of the Meat Eater)

Wait– I have a coupon for that!

I have a confession to make:  I have become an Extreme Couponer. All the signs are there: I’ve developed a pattern for watching my most lucrative stores for bargains and super deals. I know and use terms like Catalina, MFG, MQs, blinkies, peelies and stacking. And I have no less than five jars of spaghetti sauce in my cabinets. (The big ones — and I paid only $4 for all of them!)

In fact, I have now successfully navigated three ‘super doubles’ couponing events at my local grocery stores!  ‘Super doubles’ is when a grocery store doubles coupons, in some cases doubling manufacturer coupons worth up to $2.00. So while I’m by no means an expert in extreme couponing, I AM highly enthusiastic about the impact it has already had on my family’s grocery budget. There are three of us in my little family unit and while our budget has increased some since I landed my dream job as an Administrative Assistant at Midan Marketing, it is certainly not unlimited.  Shoppers like me who save by couponing for common household needs and side items will have extra cash to purchase more roasts, ribs and steaks than before!

So far this year (almost the end of January as I write this), I have racked up well over $400 in savings from couponing. That money is allowing me to feed my family a great variety of higher-quality meats AND help out some other folks by either sharing my stockpile or bringing meals to folks in times of stress or illness. Being able to care for my family AND share love and comfort with others without suffering financially is the greatest blessing I receive from couponing.

The Couponing Process

Friday or Saturday I look through the circulars for the stores I frequent. (Yes stores. If you want the best deals, a weekly grocery shop will take you to at least two stores.)  From there, I’ll craft my dinner plans based on how the deals line up with my already-clipped coupons. Some weeks there just aren’t tons of deals, and I’ll make a plan based on what I already have on hand to minimize the list.

A quick but exciting example:  recently, my local store had name- brand bacon on sale for “Buy 2, Get 3 Free.” Stop and read those words again… I’ll wait. FREE BACON Y’ALL!! I did not have any coupons for this bacon, so I emailed the company’s customer service and asked for some. They sent me four coupons for varying amounts off a variety of their products. So I went to the store, grabbed my five pounds of bacon (FIVE!) and after coupons I paid $11.00. Five pounds of this brand of bacon would normally have cost me about $35 at regular retail price, and I got it for nearly 70% off!

shutterstock_130416155Couponing requires significant planning and researching. When you’re carefully budgeted, walking through the store, keeping a tally of exactly what you’re spending, is tiring enough. On top of that, I have to multiply/add/divide cents and dollars, subtract percentages and compare cost per unit to be sure I’m getting the best deal…I often leave with a little headache!

 

Cost-conscious shoppers like me have a well-established habit of sticking religiously to their list.  It’s key to going into the store and getting a cart full of groceries and household goods for just dollars. I always scope out the meat case for good deals.  If there’s a lightning sale on something I’ll grab it, but if it’s just a good deal, I’ll check the sale dates, make note of it and come back to get it on a different trip.

Often I base what meat I’m buying on what side items I’m getting or have stocked at home. Recently there was a new line of ‘pouch’ sauces on sale and heavily couponed (as new items often are) for less than a dollar. One of them was a pot roast sauce for the slow cooker and it just happened that chuck roast was on sale for half price, so of course I snatched both of those up. I even got an extra chuck roast to freeze for later. I have always wondered if there was a coordinated effort when those “matches made in couponing heaven” happen or was it just a happy coincidence?

Right now in my freezer I have two packs of ground beef, a chuck roast, a few packs of chicken breasts and, of course, a bunch of bacon! I’ve not always had the ability in my life to ‘stock up’ on things, so it feels great to have some reserves. Knowing that I’ve stockpiled supplies in case (God forbid) a car breaks down or someone gets sick,  without having gone over our regular weekly budget, feels like I’m some kind of superhero!

I have really enjoyed teaching my friends how to use coupons to stretch their budgets.   If you have a question about couponing or grocery planning, please ask. I’d like to share as much as I can before I know too much about meat to be considered a regular consumer!

Happy Couponing!

Dinner at the Door: A Review of Online Meal Delivery Services

I have discovered something: I actually like to cook!  I just don’t like to plan meals and I despise standing in front of the frig with the door open, trying to figure out what I am going to feed my hungry clan. Because I work full-time and am a busy mom and wife, my time for meal planning and shopping is limited. A typical week for me includes three to four soccer practices plus church functions and chauffeuring kids to their activities – all after work!

Like many moms, I find great satisfaction in sitting down and eating as a family. I work hard to protect mealtime and try to make dinner at least four nights a week. I was curious as to how an online meal delivery service could help make this happen.

Online meal delivery services are not a new concept, but the niche certainly has been reinvigorated in the last 18 months. Here at Midan we knew we needed to learn more. So, as Shonda started researching online grocery services, I decided to investigate the meal services counterpart. I ordered from both Blue Apron and Home Chef for a couple of weeks each, to “test drive” the concept.

 

Thoughts on Blue Apron

Everything you need for dinner in one Blue Apron box

Everything you need for dinner in one Blue Apron box

Blue Apron is a three-year-old start-up now delivering five million meals a month. The menu is set each week. You cannot select for specific dietary restrictions, which could easily be a detriment for some. The first week I ordered four meals for four people. The meals cost $8.74/person, which includes shipping. The ingredients arrived plenty cold but in LOTS of packaging. My first impression was that all this packaging can’t be good for anyone but the recycling center. (Complaints from customers have led Blue Apron to put a recycling program in place where they retrieve and reuse the packaging.)

The recipes sounded good. Some of our favorites included Fennel- and Thyme-Crusted Pork Tenderloin with Oven-Roasted Brussels Sprouts and White Balsamic Pepperonata and Flat Iron Steak and Fines Herbs Butter with Garlic, Potato and Red Pepper Hash.  The pictures and instructions provided were easy enough to follow, although there were no one-dish-wonders like I often gravitate to in my stable of easy, quick meals. There was a lot of clean up; we always had several cutting boards and pots and pans to be washed. Every meal we received was tasty but my teenage son did declare that most of the meals were too “frou frou” for him. With the higher cost of beef, very little beef was sent, which certainly wasn’t to our liking either!

My biggest complaint:  Blue Apron said the meal would average 40 minutes from start to finish. That was never the case; there was usually 40 minutes of prep time before the cooking began, which lead to a few late night dinners.

 

 Thoughts on Home Chef

Home Chef launched in Chicago in 2013. This summer they reported they were shipping 70,000 meals per month. Home Chef does allow you to select for different dietary preferences, which is a plus. To accommodate family preferences, we tried the low-carb, gluten-free selections. Each week before the cut-off time, I was able to go in and confirm I wanted what they had selected for my family or change to another offering. The appetizing photography often caused me to swap one item for another.

Home Chef ingredients conveniently packaged together

Home Chef ingredients conveniently packaged together

Home Chef seemed to use fewer ingredients and ingredients were already prepped (e.g., the garlic was peeled and ready to be minced). The prep timing was more accurate, and Home Chef includes nutrition facts, which gets a gold star from me. The cost per meal is $9.95 and I usually had enough leftovers for one or two lunches. And, there was way more beef!  We had flat iron and sirloin steaks, which were delicious!  The pork chops and pork tenderloin were also excellent. 

 

Overall thoughts

Do I like this type of program?  Yes! Although I entered this as a “research project,” I was surprised by how much I liked it.
Did I continue after the test? Yes, but with only two meals a week, as that seems to be the right amount for our family and allowed me to get the kids’ favs back on the menu.
Are they more expensive than homemade meals? Yes, but this is offset by me not having to spend a good chunk of my weekends meal planning, checking inventory and shopping. Having some leftovers to take to the office for lunches also helps me justify the cost.
What was the quality of the meat and produce? I’ve got to admit, I was skeptical about how the meat and produce would look when it arrived, but I was pleasantly surprised. All of the produce was outstanding and in the eight weeks I tested, I only had one case-ready leaker: fish!  Each vacuum-sealed package of beef, pork and chicken I received was excellent. All the beef was Select grade, which I understood given the price point they have to hit. The Blue Apron pork and chicken was branded; the beef and pork I received from Home Chef was not.
Can you skip shipments?  Yes, both companies have a great app that allows you to see what is coming and skip that week’s shipment if you want/need to.

 

The biggest benefits

The biggest benefit was the convenience of knowing what we were having and that I had all of the ingredients on hand!  This is a HUGE plus for a busy mom!  While it was my job to have salt, pepper and olive oil on hand (easy enough), everything else – even spices – is included and pre-measured, which means there was no waste.

Easy-to-follow recipes from Home Chef

Easy-to-follow recipes from Home Chef

One benefit I had not anticipated was that the instructions were so good (step-by-step with photos and often a video), that I left my 14-year-old son and his buddy in charge of starting dinner while I ran to pick up my daughter. Most evenings my husband and I prepare the meal together, which gives us time to catch up and is one of the main reasons I have discovered I love to cook. Quality time with the fam, cooking and eating…the benefit of the warm fuzzies has made this experiment well worth the effort!

Retailers, I don’t think it will be too long before you will need to embrace this concept in some way to keep your VIP customers coming into your stores. I like the idea of picking up pre-measured, all-ingredients-included meals for a set price when I need a quick dinner solution. Along with providing the ultimate convenience, an in-store option like this would also eliminate shipping costs and require less packaging.

Packers and processors, if you are not in discussions with companies who play in this space, what are you waiting for?  Forging relationships now could help you grow later. Along with options like online meal delivery service, talk to your current brick-and-mortar customers about how they plan to deliver fresh meals to customers who want to spend less time shopping and more time cooking. Be a part of the solution for these customers now so you can be a part of their success later.

 

Have you tried an online meal delivery service?  I would love to hear about your experience! Leave a comment here or email me d.amstein@midanmarketing.com.

 

Groceries delivered to my door?
Sign me up!

I’ll admit it. The thought of trading in the grocery store checkout line for an online cart to buy my weekly groceries puts a little spring in my step. I appreciate that I am heavily involved in the meat industry and have a deep love for brick and mortar stores, but the promise of groceries delivered to my front door intrigued me enough to try it out.

Online grocery is one of the great comeback stories. After the first online grocery delivery company Homegrocer.com failed during the dot-com bust of the 2000s, smart business people perfected the formula and they have returned stronger, more diverse and with better IPOs than ever before. Online grocers like AmazonFresh.com, FreshDirect.com and DoortoDoorOrganics.com are skipping brick and mortar stores for a strong online presence with regionally-based distribution warehouses and privately-owned delivery trucks. In 2014 IBIS World reported that online grocery sales had grown at a 14.1% annual rate over the past five years. In addition, profit estimates were $927 million, which is 8.5% of total revenue. For comparison, brick and mortar stores are at an average of 1.3% total revenue (FMI). Online grocery is only growing, with 54% of online grocery shoppers increasing their spending over the past year (Watson, 2015).

What does this mean for the meat industry?

For the right grocery shopper, online grocery can be a life saver. While it truly has the potential to replace or at least fill in the gaps of a regular grocery shopping trip (and that even goes for fresh meat sales), there is a price for convenience. From my estimates, an online shopper will pay more, but in the long run it’s an opportunity cost comparison. If the time saved by shopping online versus going to a brick and mortar store is greater, shoppers will increasingly make the switch. For meat suppliers, that means playing the game and working to create fruitful relationships with online grocery businesses. However, when trying to forge the sale, it will be important to have a good grasp of an online grocery’s unique buying, selling and distribution business model.

In order for brick and mortar grocery stores to compete, Meat Directors or Meat Managers need to constantly be giving consumers a reason to physically come into a store. That means emphasizing convenience, value and product freshness, along with unique advertising campaigns to peak and maintain a customer’s interest. Some retailers have been successful with a hybrid model that allows customers to order online and pick up bagged and ready to go groceries at the store’s front door. While this does require a bit of infrastructure and systems in place on behalf of the retailer to succeed, it also may require meat suppliers to produce specialty cuts or packaging for the retailer.

Who’s the customer?

I am the epitome of an online grocery consumer target. About five years ago — otherwise known as B.C. (before child) — I was a busy professional single whose clean refrigerator held nothing more than a half-gallon of skim milk and a few premium steaks in the freezer. Now I am a busy professional mom who can barely squeeze two gallons of whole milk, several frozen ground beef chubs and an entire pork loin into my over-stuffed refrigerator.

In either case, trips to the grocery store have always been a burden. Since I was often in grocery stores for professional reasons at the start of my career, I could find a thousand alternate things to do than hit the local grocer for personal items, and now it’s often comical to watch my 2-year-old’s grubby fingers pull random items off the shelves. Voila! Enter my reason for trying online grocery with front- door delivery.

Because I have a self-diagnosed obsession with online reviews, I have compared and contrasted three major online groceries in that format. Since only a few online grocers deliver to my region in Kansas City, I roped some friends into receiving packages on my behalf with the promise of free steak. Each is a potential online grocery customer as well: a busy professional single and a busy professional mom.

Let’s dig in!

The Basics
amazonfresh-logo-190915_150px

AmazonFresh.com4stars

Locations served:
New York City, New Jersey, Philadelphia, Southern California, Northern California and Seattle

Who got the delivery:
My high- powered single friend in San Diego

Fresh-Direct_150pxFreshDirect.com

3stars

Locations served:
New York City, New Jersey, Philadelphia and areas of Delaware and Connecticut

Who got the delivery:
My cousin, the busy professional and mom of two

door-to-door_150pxDoortoDoorOrganics.com

3stars

Locations served:
parts of Colorado, Kansas City, Chicago, Michigan and parts of the NE

Who got the delivery:
Me, the meat industry professional and mom

Ease in Online Ordering
5stars

I’ll be honest. I love shopping on Amazon.com! I read all the customer reviews, I religiously use the sorting capabilities and I even get excited over the “frequently bought together” suggestions. So when I had the opportunity to buy groceries in the same way, I was excited! Aside from forcing an available delivery zip code in order to browse items, AmazonFresh.com’s online ordering lived up to the hype and more!

3stars

FreshDirect’s online ordering was antiquated at best. Their online ordering mirrors that of an actual brick and mortar store with categorizations, cross merchandising and a large number of offerings, but their system does not have nearly the bells and whistles as other websites. The scheduling system was a bit confusing, and their check-out process seemed to take forever. Overall, they are due for an upgrade.

5stars

DoortoDoor organics online ordering was designed with the consumer in mind. Their website is truly beautiful, and their advance categorizations and enticing photography elevate the overall feel. They also have quick reference icons communicating various brand attributes along with a one click Shop By Recipe® function! Whoever designed their website knew how to appeal to consumers.

Pricing and Offering
2stars

AmazonFresh.com relies on suppliers to set actual product pricing, and for the offered regional and specialty brands, the pricing seemed in line with what they would normally cost at a brick and mortar store. The prohibitive costs are the incremental ones. There is a $299 annual signup fee for a PrimeFresh membership and a minimum $50 subtotal just to get the first delivery.

4stars

Pricing for FreshDirect is slightly more than what would be found in a brick and mortar store, but still not out of reach. They do not have a minimum order requirement but instead charge a flat fee of $7.99 for deliveries. There is an optional DeliveryPassSM subscription which is a maximum of $119/year with a minimum order of $30. I’m intrigued!

3stars

Because DoortoDoorOrganics is a hybrid subscription meal planner and online grocery, to get a delivery you must be subscribed to a “Produce Box,” which start at $25.99. Once you’re subscribed, you can shop the store, but be forewarned – all items are either organic or natural, and inherently pricey.

 

Delivery and Packaging
5stars

Among many things AmazonFresh does right, their delivery and packaging is on point! They make marketing magic with branded green delivery trucks, matching cooler bags and branded freezer packs. Refrigerated items even have special quick teardown Styrofoam sides that help protect deliveries from the hot sun. The beef items themselves were delivered frozen in wax paper wrapping, which made the steaks have a “local butcher” feel. This was definitely a nice selling point.

1star

On the plus side, FreshDirect delivery was perfectly timed; however, their packaging was less than desirable. The steaks were in traditional overwrap packaging, but then just thrown into a large cardboard box with no protection or way to keep the product cool, especially in the summer. The promise of convenience dissipates if a customer has to be home to receive his/her groceries.

3stars

First off, delivery was on time as promised; however, the packaging was way over done. There was literally enough padding and freezer packs to safely ship a delicate icicle to the Sahara and have it arrive safely. It is important to note that there was communication printed on the packing asking recipients to set everything out during normal delivery days so it could be returned and reused. Trouble is, not all customers will do that, which leaves their “better for the earth” vibe an empty promise.

 

What’s the final word?

In the long run I do not believe online grocery will replace the brick and mortar store completely, but it certainly has the potential to steal share from the U.S. grocery market as a whole.

What are your thoughts about online grocery? Tell us in the comments below.

 


 

IBIS World. (2014, December). Online Grocery Sales in the US: Market Research Report. Retrieved July 24, 2015, from IBIS World: http://www.ibisworld.com/industry/online-grocery-sales.html

FMI. (n.d.). Supermarket Facts. Retrieved July 23, 2015, from Research Resources: http://www.fmi.org/research-resources/supermarket-facts

Watson, E. (2015, July 7). Online grocery shippers are upping their spending online, but remain wary of buying fresh produce, says new survey. Retrieved July 23, 2015, from FoodNavigator-USA.com: http://www.foodnavigator-usa.com/Markets/Online-grocery-shoppers-are-upping-their-spending-online-survey

 

Resolve to Own Protein in 2016

It’s easy to guess what the top New Year’s resolutions are every January:  lose weight, get in shape, eat better, right?  (Raise your hand if you’ve picked one of these.)

The start of a new year,shutterstock_334226393 when people enthusiastically resolve to focus on their health and wellness, is a great time to be in the fresh meat industry. In order to capitalize on all the ways that meat can help the health-conscious achieve their goals, it’s important to understand two key factors challenging today’s meat consumption.

Fad Diets are Trending Down

Although the new year is the perfect time to promote lean meat to help build muscle and lose fat, interest in high-protein diets like the Paleolithic Diet appears to be fading. According to Google Trends, online searches for “Paleolithic Diet,” “Primal Diet” and other high-protein diets have been dropping significantly since 2013, reaching an all-time low in 2015. Plant-based diets, however, appear to be on the rise.

So, all those folks who were flocking to the meat case for their high-protein fix aren’t so much these days. But while high-protein diets might be losing their appeal, balanced diets are always in style. So while you might not get as many Caveman dieters, you can still lure lots of folks who are trying to eat well and maintain a healthy weight. Lean beef and pork deliver the high-quality protein every body needs all year long. We in the meat industry need to make sure consumers understand this.

Alternate Protein Sources aren’t Slowing Down

While Americans might be fickle about their fad diets, their love affair with protein seems to be going strong. Unfortunately for the meat industry, people are often choosing their protein in the dairy case instead of the meat case. The current Greek yogurt craze is just one example. Many consumers have shifted away from meat in the past year. According to our Protein and the Plate research:

  • 70% of consumers said they substitute non-meat protein for fresh meat once a week
  • 20% of meat eaters said they are replacing fresh meat more often than they did a year ago

While consumers have an increased awareness of the importance of protein, they aren’t always turning to one of the best sources on the planet to get it. I’ve said it before and I’ll say it again: the meat industry needs to OWN protein!  We are missing out if we don’t shout it from the rooftops and plaster it on the package and all marketing materials.

Fresh Meat:  The Perfect Diet Food

Let’s face it:  those gung-ho consumers with their New Year’s resolutions might not make it to the gym as often as they like (myself included), but there’s little doubt they’ll get to the grocery store. Be ready with products and messaging that help them start the new year on the right foot, with the right protein:  fresh meat.

The time is now to communicate how fresh meat is the ideal protein source for a healthy, balanced diet. Be sure your websites and social media posts are talking about it and start planning now to get this important messaging in store and on packages.

Check out these “Protein Builds” videos from Maple Leaf Foods that effectively relay the importance of protein in a healthy diet.

Leave a comment or email me directly at d.amstein@midanmarketing.com.  I love to hear from you!

2015 Recap: Pay attention to these 3 things

When the calendar hits December 1, it’s time to start checking to see if we made the “nice” list or not! (I have confirmed my status…how about you!?!)  As 2015 comes to a close, we also pause to reflect on the significant events that have shaped our industry this year, and consider how they might impact 2016.   As I look back across the major headlines from the past year, three main themes seem to form:

  1. Prices/Supply – Oh, what a roller coaster ride 2015 has been! Beef prices found new ceilings, pork prices leveled out before taking a nose dive the last few weeks. Was any topic more talked about in the media and meat company board rooms across the country this past year?  The good news is that 2016 is bringing greener pastures, literally, thanks to much-needed rain, so more cows are being retained.  Pork producers are also breathing a sigh of relief that the PEDv outbreak is behind them.  The conditions are ripe for increases in supply with less volatile pricing, and that is something we can all be thankful for!
  1. Niches – We live in a world where specialization is becoming the norm, not the exception, and this trend has resulted in niche meat brands and products that cater to specific lifestyle and dietary needs. For some consumers, antibiotic-free is a trigger; for others, it’s animal welfare. We stopped selling one-size-fits-all meat a while ago, and in 2015 we saw further fragmentation. It will serve us well to figure out which niches are feasible to cater to and then build the brands and products to meet those needs.
  1. Health/Wellness – 2015 brought its share of headlines that tied meat with health, like whether lean meat would still be part of the Dietary Guidelines or the IARC’s report that processed meat causes cancer. But when we’re talking about meat and health, let’s not forget protein. “Protein” is a word we have to continue fighting to own. Meat is the ultimate source of protein, and if you are not calling that out in your consumer messaging, it is time to get on the bandwagon.

As we wrap up 201shutterstock_328379666 (1)5, I encourage you to spend a few minutes thinking of the ramifications of these themes.  In order for us to succeed in 2016, we have to keep our pulse on what consumers are doing and what is influencing their behaviors.  What do you think?  Do you agree with my assessment or did I miss something?  What do you think the main headlines will be in 2016?  I always appreciate your comments.

Cheers to 2016!

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