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Foodservice turns up competitive heat on retail stores

Sales growth for specialty foods is eclipsing that of the overall food retail market, according to the Specialty Food Association (SFA) 2019-20 State of the Specialty Food Industry Report.

SFA said Tuesday that specialty food and beverage sales reached $148.7 billion in 2018, up 9.8% since 2016. Though year-over-year dollar sales gains have slowed, advancing 5.4% in 2017 and 4.3% in 2018, the specialty segment has seen compound annual growth rate of 10.3% for the period, more than three times the 3.1% rate for all food at retail, the association reported. By unit sales, specialty had a CAGR of 8.1% during that time span.

All charts are from the Specialty Food Association 2019-20 State of the Industry Report.

Driving increased specialty food sales are broader availability, product innovation and escalating interest from consumers and retailers, SFA noted. Last year, 74% of consumers polled said they bought specialty food and/or beverage products.

"Diverse consumer lifestyles are taking specialty foods mainstream," Phil Kafarakis, president of New York-based SFA, said in a statement. "To reach these consumers and increase their own sales, food merchants have embraced the vast assortment of specialty products.”

The SFA State of the Specialty Food Industry report is a joint research project of Mintel and SPINS/IRI. It includes sales data for 63 specialty food categories (SPINS/IRI), forecasts for 35 specialty food categories through 2023 (Mintel) and results from a January survey of 1,630 U.S. adults.

In 2018, specialty food sales at brick-and-mortar retailers totaled $113.4 billion, accounting for 76% of the market, while specialty foodservice sales came in at $32.4 billion, for a 22% share. The SFA report said specialty foodservice sales grew 12.9% from 2016 to 2018 versus 8.4% for retail stores, yet for both channels sales were stronger in 2017 than 2018.

“Growing competition from foodservice and restaurant delivery is putting pressure on retailers,” SFA said in the annual report. “Specialty food sales in foodservice outpace retail, though foodservice accounts for a smaller market share. Consumers report spending more of their food dollars on foodservice.”

Online sales of specialty foods and beverages in 2018 surged 24% to $2.85 billion. Though representing just 2.5% of total specialty food sales, the online channel has seen 41% compound annual growth since 2016. In terms of physical stores, mainstream retailers have seen double-digit sales growth from 2016 to 2018 (+11%), while growth has only edged up at natural food stores (+3%) and specialty stores (+2%).

“Online retail continues to expand. It is the smallest channel but is growing the fastest. On the brick-and-mortar retail side, the mainstream channel’s growth outperforms specialty and natural stores,” the SFA report stated. “Consumers across age ranges are shopping in a variety of channels, as many specialty food and beverage options are now widely available.”

Of the total food and beverage market, specialty food and beverage sales accounted for 16.1% of sales, up one percentage point since 2016. From 2013 to 2018, specialty food and beverage sales at retail rose an average of 7.2% annually, from $47.3 billion to $67 billion.

“Today, mainstream outlet growth — including supermarkets, mass merchandisers, drug stores and other mass outlets — is the strongest, with specialty and natural food stores lagging,” SFA observed. “The wide availability of specialty products in conventional outlets is a definite factor.”

Collectively, the top 10 specialty food categories represented almost half of all specialty food and beverage sales last year. Six of the top 10 categories by retail sales are sold in the refrigerated or frozen sections, including cheese and plant-based cheese; refrigerated and frozen meat, poultry and seafood; refrigerated entrees; frozen entrees; frozen desserts; and yogurt and kefir. Rounding out the top 10 were chips, pretzels and snacks; coffee and hot cocoa (not ready-to-drink); bread and baked goods; and chocolate and other confections.

“Consumers continue to focus on fresh, frozen, health-oriented products and ingredients,” the report said. “For example, the frozen and refrigerated departments were the fastest-growing in specialty retail during 2016-2018, up 16.3% and 12%, respectively.” Refrigerated categories such as entrees, juice and functional beverages are among categories Mintel projects to grow in the next five years, SFA added.

Of the top 10 categories with the highest dollar sales growth from 2016 to 2018, plant-based meat alternatives (refrigerated and frozen) had two of the top three slots. Also showing strong growth are refrigerated beverages and frozen desserts, with the latter being driven by low- or no-sugar, premium and plant-based varieties.

Other fast-growing categories by dollars were rice cakes, water, refrigerated ready-to-drink tea and coffee, shelf-stable and refrigerated creams and creamers, jerky and meat snacks, and refrigerated pasta.

“Plant-based categories continue to lead in terms of specialty share,” SFA’s report noted. “Most of these categories originally were developed specifically for the natural and specialty consumer. Many of the most cutting-edge plant-based products begin in natural or specialty retail and migrate to larger channels if sales reach critical mass.”

Mintel forecasts the specialty food market to hit $89.1 billion by 2023, expanding at a 5.9% CAGR from 2018. Besides continued strength for plant-based foods and specialty beverages, the SFA report points to opportunities in breakfast and describes convenience stores as “an undertapped market for specialty items.”

Millennials are the most likely customers, with 84% saying they bought specialty foods in 2018. Yet the appeal of specialty products remains strong across generations, as 66% of Gen-Z, 75% of Gen-X and 69% of Baby Boomer consumers reporting they purchased specialty foods last year.

“Ultimately, a core specialty food consumer is surfacing that is between 35-54 years old, though younger and older age groups are active consumers,” SFA said in the report.

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Strong beef demand expected to continue through remainder of 2019

When they go out for breakfast, lunch or dinner, more consumers are choosing beef, according to the Beef Checkoff program (a producer-funded marketing and research program designed to increase domestic and/or international demand for beef). In fact, 97% of restaurants report offering beef dishes, which has been shown to increase restaurant traffic by 45%, the checkoff reported.

Overall, beef demand is up 15% since 2012. The U.S. Department of Agriculture is predicting strong consumer demand to continue through 2019, with U.S. consumers anticipated to consume nearly 9% more beef this year than in 2015.

The National Cattlemen’s Beef Association (NCBA), contractor to the Beef Checkoff, oversees the iconic "Beef. It’s What’s For Dinner" brand. By investing dollars in crucial market research, the checkoff is driving beef demand.

To better understand foodservice beef trends, the brand conducts an annual foodservice volumetric study. The study measures operator purchases and distributor sales of beef and other proteins across all foodservice operating segments. Findings revealed that beef is the most prominent ingredient at these establishments, accounting for 16% of total foodservice food and non-alcohol purchases.

Still, for the beef industry to remain successful, it must recognize what consumers want, the checkoff said, explaining, “They hold the purchasing power; therefore, it is essential the beef industry responds to their requests and decision-making patterns.”

NCBA monitors and measures consumer attitudes on a monthly basis. Findings show that the “Beef. It’s What’s For Dinner brand” has had an extremely positive impact. According to the checkoff-funded Consumer Beef Tracker, people are more likely to feel positive about beef and more likely to eat beef more often when they are aware of the “Beef. It’s What’s For Dinner” brand.

Research has also shown that consumers trust producers to deliver a superior beef product. Over the last decade, cattle producers have responded to trends calling for higher-quality beef, delivering more USDA Prime- and Choice-graded beef products. The Choice/Prime percentage moved from 55% in 2007 to 79% in 2018 and is projected to reach 80% this year, NCBA relayed.

“With the checkoff gaining insight and data into market trends and consumer interests, the beef industry is better equipped to meet purchasing trends. Beef Checkoff research is identifying market opportunities and utilizing dollars to promote beef within different segments of the foodservice and retail chain,” NCBA said.

The bottom line? Consumers want beef.

“From burgers to high-end steaks, restaurant owners recognize the economic incentive of offering beef on their menus. Producer-invested-checkoff dollars are arming the beef industry with insider knowledge so beef can continue to reign,” the checkoff noted.

U.S. fighting for global presence

Demand for beef is also on the rise across the globe, and while the U.S. will have to fight for market share, consumers across the world have made it clear that they are hungry for U.S. beef.

“Foreign market development is one of the most significant ways the beef checkoff drives demand for beef. Competition is fierce on the global stage, and the checkoff works diligently to persuade foreign countries that U.S. beef is their best choice,” the checkoff reported.

The U.S. Meat Export Federation (USMEF), a subcontractor to the beef checkoff, carries out this mission. From attending international food events and conducting training sessions to working with retailers and encouraging restaurants, USMEF’s initiatives have greatly expanded the presence of U.S. beef in key countries.

For example, South Korea has become one of the leading markets for U.S. beef. In fact, beef exports to Korea in 2018 increased 30% year over year in volume and 43% in value, increasing from $526 million in 2017 to $1.75 billion in 2018.

“A big factor contributing to this gain was Costco officially converting its imported chilled beef selection from Australian to 100% U.S. beef,” the checkoff said, adding that the multiyear effort by USMEF has resulted in a wider selection of U.S. beef cuts being available to consumers.

USMEF has also established the Diamond Plus Precious Gourmet Selection awards, which encourage restaurants in Taiwan to serve and promote U.S. beef. USMEF first presented these awards in 2018 and will continue to honor 20 deserving restaurants each year.

“By creating an incentive for Taiwanese restaurants to feature high-quality U.S. beef, the Diamond Plus Precious awards are helping U.S. beef establish a stronger foothold in that country while also providing consumers clear and accessible ways to learn about the best restaurants offering these products,” USMEF said.

USMEF's office in Tokyo, Japan, has launched a social media campaign to promote U.S. beef while also encouraging consumer participation. On Instagram, a photo-based social media platform, USMEF has been asking consumers to share their experiences with U.S. beef at home and at restaurants. Individuals who share photos of U.S. beef “pound steak” are eligible for prizes. The pound steak campaign was followed by a “My Pound Steak” Instagram event to further encourage photo sharing of this product. This social media effort is bringing U.S. beef to a platform where consumers are most active.

 “The number of active Instagram users now exceeds 29 million in Japan – up 150% from a year ago,” said Takemichi Yamashoji, USMEF director in Japan. “Realizing the popularity of social media and how consumers are using it to make decisions on what to eat, USMEF will keep focusing on these kinds of activities to more widely and effectively convey information on U.S. beef.”

With programs like these in place, the checkoff said it is introducing high-quality beef to consumers who may never have enjoyed it before.

“Visibility is key, and U.S. beef producers recognize that investing dollars in these efforts is necessary to maintain and drive demand so prices can remain strong even during more challenging times,” the checkoff said.

This piece originally appeared on Feedstuffs, a Supermarket News sister website.

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Is there room for competition in a market dominated by Beyond Meat and Impossible Foods?

The meat alternatives market is on fire.

Restaurant sales of meat-alternative products jumped 268% from 2018 to 2019, according to data from group purchasing organization, the Dining Alliance.

Beyond Meat Inc. and Impossible Foods Inc. have garnered the lion’s share of the growing segment, but an increasing number of other companies are providing alternatives to the alternatives.

Beyond Meat, founded in 2009 in Los Angeles, announced its initial public offering in May, valued at $25 per share, and it quickly shot past $171. Impossible Foods, founded in 2011 and based in Redwood City, Calif., got its “bleeding” Impossible Burger onto the menu at multiple major quick-service chains this year, including Burger King and Red Robin Gourmet Burgers Inc.

But despite the stronghold that those two meatless protein startups have on the fledgling meat-alternatives industry, reported product shortages allow room for competitors to gain a foothold.

Reports of Impossible Burger shortages hitting major partners, including Red Robin and White Castle, have surfaced. Bloomberg made calls earlier this month to a dozen Red Robin and White Castle units and found that only two locations had the popular meatless patties in stock, and the restaurants had no idea when they would get them back in stock.

Beyond Burger experienced similar shortages in 2017 and 2018, when the company’s supply could not keep up with increasing demand.

Impossible Foods has addressed these shortages, telling Nation’s Restaurant News that “like many successful startups, we are facing short-term ramp-up challenges resulting from demand greatly outstripping supply.” The company said it is in the midst of an aggressive hiring spree to keep up with demand and “plans to install a second production line in July that should double current capacity,” anticipating “that the second line will be fully staffed and ramped up in the fall.”

In addition to supply issues, both companies have seen rising competition. Springdale, Ark.-based Tyson Foods Inc., which previously had sold its stake in Beyond Meat, said it would launch its own line of meat-alternative products.

Here’s a look at some of the up-and-coming meat-alternative competitors:

Tyson Foods

After suggesting that it would enter the meat alternatives industry for months, Tyson Foods Inc. announced on June 13 that the company would soon be launching a new line of meat-free and blended protein products called Raised & Rooted.

Photo: Tyson logo
Credit: Tyson

The initial product portfolio will include plant-based nuggets made from blend of pea protein powder and other plant ingredients. The blended burgers made with a combination of plant-based ingredients and Angus beef.  Additionally, the company’s Aidells Whole Blends brand will be launching a line of sausage and meatballs, made with chicken and plant-based ingredients.

“Today’s consumers are seeking more protein options so we’re creating new products for the growing number of people open to flexible diets that include both meat and plant-based protein,” said Noel White, Tyson Foods president and CEO, in a statement. “For us, this is about ‘and’ – not ‘or.’ We remain firmly committed to our growing traditional meat business and expect to be a market leader in alternative protein, which is experiencing double-digit growth and could someday be a billion-dollar business for our company.”

Tyson will be launching the vegan nuggets to retail outlets nationwide this summer, with the blended burgers to join the lineup in the fall. No details were available concerning where the products would be available.

Tyson declined to comment further on the launch of the new product line.

Through Tyson Ventures, the company’s venture capital fund, Tyson Foods said it also continues to invest in start-up companies involved in alternative proteins, including mushroom-based protein producer MycoTechnology and cell-based meat producers Memphis Meats and Future Meat Technologies.

Nestlé Sweet Earth

Nestlé USA is another major food corporation diving into the plant-based proteins. In 2017, Nestlé acquired Sweet Earth, a Moss Landing, Calif.-based vegan foods manufacturer. Sweet Earth this year announced the launch of its new vegan burger product, Awesome Burger, and its ground beef component, Awesome Grounds, that will be headed to retailers in the fall.

Photo: The Nestle Sweetearth Awesome Burger
Caption: Hardy Wilson

Sweet Earth currently offers both organic and conventional versions of the Awesome Burger, and both are certified as containing no non-genetically modified organisms. (Advocates have criticized Impossible Foods for using genetically modified soy in the Impossible Burger).

Nestlé told NRN that the company plans to distribute the Awesome Burger and Awesome Grounds to supermarkets, restaurants and universities, though the company declined to comment on specific partnerships.

“Both the organic and conventional versions of the Awesome Burger are higher in protein and fiber than most other plant-based burgers — our conventional burger has 28 grams of protein and 6 grams of fiber,” Kelly Swette, CEO and co-founder of Sweet Earth told NRN. “This is because we use U.S.- sourced yellow pea protein, [which is] more protein-dense than green pea protein.”

Before the Butcher

Sweet Earth was not the only plant-based protein startup acquired by a major manufacturer. Sunset Beach, Calif.-based vegan foods brand Before the Butcher was acquired earlier in June by Gregg and Jeff Hamann, the owners of ground beef producer Jensen Meat Co.

The company also announced the upcoming national retail distribution of its “chicken,” “turkey,” “beef,” and breakfast “sausage” plant-based burger patties this summer to 3,000 stores, including three of the largest grocery retailers in the country. Following the distribution of their “B4Burger” portfolio, Before the Butcher will launch the rest of its Uncut vegan protein products, including ground “beef,” vegan chorizo and Italian sausage products.  

Photo: The breakfast sausage sandwich from Before the Butcher
Credit: Before the Butcher

Before the Butcher’s founder Danny O’Malley worked for Beyond Meat before starting his own vegan protein company in 2017, just one year after leaving Beyond Meat.

“I embraced the vision that the founder of Beyond Meat saw as well and I realized that there were opportunities far beyond what they were doing,” O’Malley told NRN. “They have amazing stuff going on, but the product line was limited. … We have a full family of plant-based products that supersedes our competitors, and we believe our nutrition is superior: our Uncut burger has 150 mg of sodium, while our competitors are close to 400 mg of sodium, and that was a strategic decision on our part.”

The B4Burger is made from non-GMO preserved soy protein, though many of their competitors have chosen to go with yellow or green pea proteins. O’Malley said that the decision to use soy was motivated by the “texture and bite” of the product that he believes more closely resembles ground beef.

O’Malley said he is not worried about competition and does not believe the market will become oversaturated.

“All of us [meat-alternatives producers] at our greatest capacity can’t even meet the demands of the market right now, so there is need for all of us,” O’Malley said. “We are all working toward the same goal. [Beyond and Impossible] have established this strong foothold but we are running right behind them.”

Moving Mountains

Photo: The Moving Mountains B12 burger.
Credit: Moving Mountains

The London-based Moving Mountains Foods — which has been dubbed the “Impossible Burger of Europe” — just announced a major partnership with the Hard Rock Café and will introduce its B12 burger (named after its vitamin B12-rich wheat, soy and pea protein patty) to 23 Hard Rock Café locations across Europe, including London, Rome, Paris and Prague.

Moving Mountains burgers can already be found in 3,000 fast-casual and casual-dining locations across Europe, including Applebee’s, Harvester, Ed’s Easy Diner, Nikki Beach and O’Neill’s Irish Pub & Bar.

Like the Impossible Burger, the B12 burger “bleeds” (with beetroot juice), but Moving Mountains does not want to be seen as “just another” meatless burger and must work within European food rules and regulations that restrict the usage of genetically modified products.

Although Moving Mountains is not available in North America, a spokesperson said the company hopes to launch its products abroad soon. 

Hormel Foods

Hormel Foods Corp., widely known as the brand behind the Spam canned pork brand, is exploring the growing alternative-meats industry and will soon launch a vegan pizza topping in response to increased demand for meat-free alternatives.

"The consumer seems to be speaking about having plant-based as a choice," said Jim Snee, CEO and president of Hormel, at the 2019 dbAccess Global Consumer Conference in Paris.

"We understand that it is a shiny new toy. We get that. It is one of our shiny new toys as well. It is something that is certainly on our minds, like it is everyone else, and there is a lot of work happening both in the market and behind the scenes."

This is not the company’s first foray into products that reduce meat consumption. Hormel recently launched its “Fuse Burger,” made from ground turkey and rice, to retailers and foodservice distributors nationwide.

“We think that consumers, in terms of engaging with products like this, a lot of times the first place that happens is in a restaurant, off of a menu," Snee said during the conference. "So we are hard at work to make sure we have the foodservice offering that can help consumers connect with that space and make a decision if that's something they want to continue to pursue."

Hormel declined to comment further on the upcoming products.

Contact Joanna Fantozzi at Joanna.fantozzi@knect365.com

Follow her on Twitter: @JoannaFantozzi

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Foodservice turns up competitive heat on retail stores

Sales growth for specialty foods is eclipsing that of the overall food retail market, according to the Specialty Food Association (SFA) 2019-20 State of the Specialty Food Industry Report.

SFA said Tuesday that specialty food and beverage sales reached $148.7 billion in 2018, up 9.8% since 2016. Though year-over-year dollar sales gains have slowed, advancing 5.4% in 2017 and 4.3% in 2018, the specialty segment has seen compound annual growth rate of 10.3% for the period, more than three times the 3.1% rate for all food at retail, the association reported. By unit sales, specialty had a CAGR of 8.1% during that time span.

All charts are from the Specialty Food Association 2019-20 State of the Industry Report.

Driving increased specialty food sales are broader availability, product innovation and escalating interest from consumers and retailers, SFA noted. Last year, 74% of consumers polled said they bought specialty food and/or beverage products.

"Diverse consumer lifestyles are taking specialty foods mainstream," Phil Kafarakis, president of New York-based SFA, said in a statement. "To reach these consumers and increase their own sales, food merchants have embraced the vast assortment of specialty products.”

The SFA State of the Specialty Food Industry report is a joint research project of Mintel and SPINS/IRI. It includes sales data for 63 specialty food categories (SPINS/IRI), forecasts for 35 specialty food categories through 2023 (Mintel) and results from a January survey of 1,630 U.S. adults.

In 2018, specialty food sales at brick-and-mortar retailers totaled $113.4 billion, accounting for 76% of the market, while specialty foodservice sales came in at $32.4 billion, for a 22% share. The SFA report said specialty foodservice sales grew 12.9% from 2016 to 2018 versus 8.4% for retail stores, yet for both channels sales were stronger in 2017 than 2018.

“Growing competition from foodservice and restaurant delivery is putting pressure on retailers,” SFA said in the annual report. “Specialty food sales in foodservice outpace retail, though foodservice accounts for a smaller market share. Consumers report spending more of their food dollars on foodservice.”

Online sales of specialty foods and beverages in 2018 surged 24% to $2.85 billion. Though representing just 2.5% of total specialty food sales, the online channel has seen 41% compound annual growth since 2016. In terms of physical stores, mainstream retailers have seen double-digit sales growth from 2016 to 2018 (+11%), while growth has only edged up at natural food stores (+3%) and specialty stores (+2%).

“Online retail continues to expand. It is the smallest channel but is growing the fastest. On the brick-and-mortar retail side, the mainstream channel’s growth outperforms specialty and natural stores,” the SFA report stated. “Consumers across age ranges are shopping in a variety of channels, as many specialty food and beverage options are now widely available.”

Of the total food and beverage market, specialty food and beverage sales accounted for 16.1% of sales, up one percentage point since 2016. From 2013 to 2018, specialty food and beverage sales at retail rose an average of 7.2% annually, from $47.3 billion to $67 billion.

“Today, mainstream outlet growth — including supermarkets, mass merchandisers, drug stores and other mass outlets — is the strongest, with specialty and natural food stores lagging,” SFA observed. “The wide availability of specialty products in conventional outlets is a definite factor.”

Collectively, the top 10 specialty food categories represented almost half of all specialty food and beverage sales last year. Six of the top 10 categories by retail sales are sold in the refrigerated or frozen sections, including cheese and plant-based cheese; refrigerated and frozen meat, poultry and seafood; refrigerated entrees; frozen entrees; frozen desserts; and yogurt and kefir. Rounding out the top 10 were chips, pretzels and snacks; coffee and hot cocoa (not ready-to-drink); bread and baked goods; and chocolate and other confections.

“Consumers continue to focus on fresh, frozen, health-oriented products and ingredients,” the report said. “For example, the frozen and refrigerated departments were the fastest-growing in specialty retail during 2016-2018, up 16.3% and 12%, respectively.” Refrigerated categories such as entrees, juice and functional beverages are among categories Mintel projects to grow in the next five years, SFA added.

Of the top 10 categories with the highest dollar sales growth from 2016 to 2018, plant-based meat alternatives (refrigerated and frozen) had two of the top three slots. Also showing strong growth are refrigerated beverages and frozen desserts, with the latter being driven by low- or no-sugar, premium and plant-based varieties.

Other fast-growing categories by dollars were rice cakes, water, refrigerated ready-to-drink tea and coffee, shelf-stable and refrigerated creams and creamers, jerky and meat snacks, and refrigerated pasta.

“Plant-based categories continue to lead in terms of specialty share,” SFA’s report noted. “Most of these categories originally were developed specifically for the natural and specialty consumer. Many of the most cutting-edge plant-based products begin in natural or specialty retail and migrate to larger channels if sales reach critical mass.”

Mintel forecasts the specialty food market to hit $89.1 billion by 2023, expanding at a 5.9% CAGR from 2018. Besides continued strength for plant-based foods and specialty beverages, the SFA report points to opportunities in breakfast and describes convenience stores as “an undertapped market for specialty items.”

Millennials are the most likely customers, with 84% saying they bought specialty foods in 2018. Yet the appeal of specialty products remains strong across generations, as 66% of Gen-Z, 75% of Gen-X and 69% of Baby Boomer consumers reporting they purchased specialty foods last year.

“Ultimately, a core specialty food consumer is surfacing that is between 35-54 years old, though younger and older age groups are active consumers,” SFA said in the report.

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Supermarket News | Meat by Richard Mitchell - 3w ago

During grilling season, retailers need to promote a range of traditional and value-added products

Summer grilling season is typically a hot time for supermarket meat sales. But operators that take the grilling consumer for granted risk losing potentially lucrative activity.

In a hypercompetitive retail environment, it is essential that supermarkets maintain or enhance their advertising, inventory and customer service if they are to sustain or increase revenues, analysts say.

"There is a lot of competition during the grilling season so it is imperative that supermarkets are promoting their meats in order to avoid leaking those sales to competitors," said Tara Dugan, director of consumer and marketplace insights for the Des Moines, Iowa-based National Pork Board (NPB).

Indeed, demand for many cuts are highest during the grilling season, which typically extends from Memorial Day to Labor Day.

Ribeye steak, strip steak and T-bone steak were the top-selling beef cuts during the 15-week 2018 grilling season and high-value middle meat steak (cuts from the rib, loin and sirloin)

sales jumped more than 5% above average during the period, according to the Centennial, Colo.-based National Cattlemen’s Beef Association (NCBA).

"Featuring always captures consumers' interest and attention," said Alison Krebs, NCBA director of market intelligence. "It is important to keep the grilling meats in a prominent position, whether it is via in-store signage, an app or in printed circulars to create product awareness."

Ribs and chops, meanwhile, are two of the most popular pork grilling selections, with about 40% of annual rib sales and 32% of pork chop sales occurring during the 2018 grilling season, Dugan noted.

In a joint 2018 grilling study with Nielsen, the NPB found that shoppers’ purchase frequency doubles for chops and is one-and-a-half times greater for ribs during the grilling season versus the entire year.

Untapped potential

Yet it also can be fruitful for supermarkets to extend their grilling-oriented inventory by offering attractive but underused selections.

“Cuts like the flat iron and tri-tip are probably the most underrated or underutilized cuts for grilling,” said Jason Resner, vice president of merchandising, meat and packaged deli, for Schenectady, N.Y.-based Price Chopper Supermarkets and Market 32.

He noted that the cuts are “hugely popular” in Southern California but have not resonated in other areas of the country.

“They are both delicious steaks with a savory, beefy taste, but customers have yet to gravitate to them,” Resner said.

At Price Chopper, the key to grilling season is a dedicated section in the meat department stocked with a variety of thick-cut steaks, particularly on weekends. (Photo: Price Chopper Supermarkets)

Flank steak, skirt steak and marinated thin cuts, such as carne asada, also have the potential to be popular grilling alternatives, said Laura Hinton, NCBA director of retail engagement.

"These cuts usually don’t get the same attention as the middle meat steaks, but can be very versatile on the grill and used in a multitude of recipes," she noted.

In addition, operators can bring a “wow factor” to the meat case by offering restaurant-centric and dry-aged cuts, including tomahawk ribeye and filet of strip loin, said Tara Adams, director of account strategy and key accounts for the Wooster, Ohio-based Certified Angus Beef brand.

"Retailers are most successful when giving customers a wider selection," she said.

While Adams stated that supermarkets should primarily spotlight the "tried-and-true" steak cuts to enhance shopper interest, she added that featuring less-known cuts and those associated with eating at restaurants "gives customers more reasons to serve beef and shop the meat case."

Think positive

Supermarkets also can be limiting sales by not having a dedicated section in the meat department that contains a variety of grilling steaks, including both bone-in and boneless options of New York strips, ribeyes, sirloins, T-bones and porterhouses, Price Chopper’s Resner said.

“Some are too focused on shrink and do not maintain a consistent variety that allows the customer to be confident to come to the store on a Tuesday and choose from a multitude of cuts as well as on a Saturday,” he said. “Alternatively, some retailers may be more concerned with ‘what if I don’t sell it’ versus having the attitude of ‘I wonder how many I can sell?’ Those that put out a limited variety or don’t display thick cuts on the weekend will never maximize their true sales potential.”

Retailers also will likely spur greater sales by offering wide arrays of value-added meats for grilling, which responds to shoppers’ strong interest in convenience while also enabling supermarkets to leverage higher margin products.

Price Chopper, for instance, markets handmade 8-ounce pub-style burgers using Certified Angus Beef 85% lean ground round. The burgers include spices and such infusions as bacon and Cheddar cheese, Swiss cheese, portobello mushrooms, sweet onion and a Buffalo blue cheese blend.

“Custom blend and infusion burgers made in store turn great profits,” Resner said.

Hinton of NCBA agreed, noting that “pre-made burgers take very little additional labor and can easily add value to the case.” She added that marinated steaks, thin-cut meats for tacos and pre-made kabobs also can be strong revenue generators.

Indeed, 59% of 2018 beef kabob dollar sales occurred during the grilling season, along with 42% of beef with vegetables sales, 41% of beef with cheese sales and 39% of marinated beef sales, the NCBA reported.

Other tactics that will help spur activity are ensuring that meat cases are always full; offering a variety of package sizes for families and smaller households; and equipping meat department staffers with simple talking points to engage shoppers, while also providing a meal idea or weekly tip that gives the associates something new to share, Adams said.

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Results from our annual Whole Health Survey show the areas of growth in wellness

The 2019 Whole Health Survey shows trends and areas of growth in health and wellness categories, including local, organic and diet-specific areas like keto. Plant-based products ranked high in trends, including the vast majority of respondents believing those products should have federal regulations surrounding naming and labeling. Respondents for this survey included retailers and wholesalers, manufacturers, distributors, brokers, and sales agencies and consultants. The survey was conducted online between Feb. 11 and Feb. 28. A total of 107 respondents completed the survey.

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<h2>What categories of local food do you purchase?</h2>

<p>Plant-based options, at 18%, was the strongest wellness trend of 2018, according to respondents. Clean label (16%) and organic (13%) were the next two in the strongest wellness trend of the year. The three options also were ranked as the top three for the second strongest trend: plant-based options (20%), organic (15%) and clean label (13%). There were some new additions to the third strongest wellness trend in 2018 with keto, natural/organic private label and plant-based options all coming in at 13%.</p>

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<h2>In the past year, what channel was the strongest competitor to supermarkets in health and wellness sales?</h2>

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<h2>What competitive advantage did they have over supermarkets? (<em>more than one response accepted</em>)</h2>

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<h2>How do you merchandise natural/organic products in your store?</h2>

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<h2>In what categories are you experiencing the greatest increases in consumer demand for natural/organic/green products? (<em>more than one response accepted</em>)</h2>

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<h2>In which categories do conventional products remain strong?</h2>

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<h2>Which better-for-you categories do you expect will grow most during 2019?</h2>

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Is there room for competition in a market dominated by Beyond Meat and Impossible Foods?

The meat alternatives market is on fire.

Restaurant sales of meat-alternative products jumped 268% from 2018 to 2019, according to data from group purchasing organization, the Dining Alliance.

Beyond Meat Inc. and Impossible Foods Inc. have garnered the lion’s share of the growing segment, but an increasing number of other companies are providing alternatives to the alternatives.

Beyond Meat, founded in 2009 in Los Angeles, announced its initial public offering in May, valued at $25 per share, and it quickly shot past $171. Impossible Foods, founded in 2011 and based in Redwood City, Calif., got its “bleeding” Impossible Burger onto the menu at multiple major quick-service chains this year, including Burger King and Red Robin Gourmet Burgers Inc.

But despite the stronghold that those two meatless protein startups have on the fledgling meat-alternatives industry, reported product shortages allow room for competitors to gain a foothold.

Reports of Impossible Burger shortages hitting major partners, including Red Robin and White Castle, have surfaced. Bloomberg made calls earlier this month to a dozen Red Robin and White Castle units and found that only two locations had the popular meatless patties in stock, and the restaurants had no idea when they would get them back in stock.

Beyond Burger experienced similar shortages in 2017 and 2018, when the company’s supply could not keep up with increasing demand.

Impossible Foods has addressed these shortages, telling Nation’s Restaurant News that “like many successful startups, we are facing short-term ramp-up challenges resulting from demand greatly outstripping supply.” The company said it is in the midst of an aggressive hiring spree to keep up with demand and “plans to install a second production line in July that should double current capacity,” anticipating “that the second line will be fully staffed and ramped up in the fall.”

In addition to supply issues, both companies have seen rising competition. Springdale, Ark.-based Tyson Foods Inc., which previously had sold its stake in Beyond Meat, said it would launch its own line of meat-alternative products.

Here’s a look at some of the up-and-coming meat-alternative competitors:

Tyson Foods

After suggesting that it would enter the meat alternatives industry for months, Tyson Foods Inc. announced on June 13 that the company would soon be launching a new line of meat-free and blended protein products called Raised & Rooted.

Photo: Tyson logo
Credit: Tyson

The initial product portfolio will include plant-based nuggets made from blend of pea protein powder and other plant ingredients. The blended burgers made with a combination of plant-based ingredients and Angus beef.  Additionally, the company’s Aidells Whole Blends brand will be launching a line of sausage and meatballs, made with chicken and plant-based ingredients.

“Today’s consumers are seeking more protein options so we’re creating new products for the growing number of people open to flexible diets that include both meat and plant-based protein,” said Noel White, Tyson Foods president and CEO, in a statement. “For us, this is about ‘and’ – not ‘or.’ We remain firmly committed to our growing traditional meat business and expect to be a market leader in alternative protein, which is experiencing double-digit growth and could someday be a billion-dollar business for our company.”

Tyson will be launching the vegan nuggets to retail outlets nationwide this summer, with the blended burgers to join the lineup in the fall. No details were available concerning where the products would be available.

Tyson declined to comment further on the launch of the new product line.

Through Tyson Ventures, the company’s venture capital fund, Tyson Foods said it also continues to invest in start-up companies involved in alternative proteins, including mushroom-based protein producer MycoTechnology and cell-based meat producers Memphis Meats and Future Meat Technologies.

Nestlé Sweet Earth

Nestlé USA is another major food corporation diving into the plant-based proteins. In 2017, Nestlé acquired Sweet Earth, a Moss Landing, Calif.-based vegan foods manufacturer. Sweet Earth this year announced the launch of its new vegan burger product, Awesome Burger, and its ground beef component, Awesome Grounds, that will be headed to retailers in the fall.

Photo: The Nestle Sweetearth Awesome Burger
Caption: Hardy Wilson

Sweet Earth currently offers both organic and conventional versions of the Awesome Burger, and both are certified as containing no non-genetically modified organisms. (Advocates have criticized Impossible Foods for using genetically modified soy in the Impossible Burger).

Nestlé told NRN that the company plans to distribute the Awesome Burger and Awesome Grounds to supermarkets, restaurants and universities, though the company declined to comment on specific partnerships.

“Both the organic and conventional versions of the Awesome Burger are higher in protein and fiber than most other plant-based burgers — our conventional burger has 28 grams of protein and 6 grams of fiber,” Kelly Swette, CEO and co-founder of Sweet Earth told NRN. “This is because we use U.S.- sourced yellow pea protein, [which is] more protein-dense than green pea protein.”

Before the Butcher

Sweet Earth was not the only plant-based protein startup acquired by a major manufacturer. Sunset Beach, Calif.-based vegan foods brand Before the Butcher was acquired earlier in June by Gregg and Jeff Hamann, the owners of ground beef producer Jensen Meat Co.

The company also announced the upcoming national retail distribution of its “chicken,” “turkey,” “beef,” and breakfast “sausage” plant-based burger patties this summer to 3,000 stores, including three of the largest grocery retailers in the country. Following the distribution of their “B4Burger” portfolio, Before the Butcher will launch the rest of its Uncut vegan protein products, including ground “beef,” vegan chorizo and Italian sausage products.  

Photo: The breakfast sausage sandwich from Before the Butcher
Credit: Before the Butcher

Before the Butcher’s founder Danny O’Malley worked for Beyond Meat before starting his own vegan protein company in 2017, just one year after leaving Beyond Meat.

“I embraced the vision that the founder of Beyond Meat saw as well and I realized that there were opportunities far beyond what they were doing,” O’Malley told NRN. “They have amazing stuff going on, but the product line was limited. … We have a full family of plant-based products that supersedes our competitors, and we believe our nutrition is superior: our Uncut burger has 150 mg of sodium, while our competitors are close to 400 mg of sodium, and that was a strategic decision on our part.”

The B4Burger is made from non-GMO preserved soy protein, though many of their competitors have chosen to go with yellow or green pea proteins. O’Malley said that the decision to use soy was motivated by the “texture and bite” of the product that he believes more closely resembles ground beef.

O’Malley said he is not worried about competition and does not believe the market will become oversaturated.

“All of us [meat-alternatives producers] at our greatest capacity can’t even meet the demands of the market right now, so there is need for all of us,” O’Malley said. “We are all working toward the same goal. [Beyond and Impossible] have established this strong foothold but we are running right behind them.”

Moving Mountains

Photo: The Moving Mountains B12 burger.
Credit: Moving Mountains

The London-based Moving Mountains Foods — which has been dubbed the “Impossible Burger of Europe” — just announced a major partnership with the Hard Rock Café and will introduce its B12 burger (named after its vitamin B12-rich wheat, soy and pea protein patty) to 23 Hard Rock Café locations across Europe, including London, Rome, Paris and Prague.

Moving Mountains burgers can already be found in 3,000 fast-casual and casual-dining locations across Europe, including Applebee’s, Harvester, Ed’s Easy Diner, Nikki Beach and O’Neill’s Irish Pub & Bar.

Like the Impossible Burger, the B12 burger “bleeds” (with beetroot juice), but Moving Mountains does not want to be seen as “just another” meatless burger and must work within European food rules and regulations that restrict the usage of genetically modified products.

Although Moving Mountains is not available in North America, a spokesperson said the company hopes to launch its products abroad soon. 

Hormel Foods

Hormel Foods Corp., widely known as the brand behind the Spam canned pork brand, is exploring the growing alternative-meats industry and will soon launch a vegan pizza topping in response to increased demand for meat-free alternatives.

"The consumer seems to be speaking about having plant-based as a choice," said Jim Snee, CEO and president of Hormel, at the 2019 dbAccess Global Consumer Conference in Paris.

"We understand that it is a shiny new toy. We get that. It is one of our shiny new toys as well. It is something that is certainly on our minds, like it is everyone else, and there is a lot of work happening both in the market and behind the scenes."

This is not the company’s first foray into products that reduce meat consumption. Hormel recently launched its “Fuse Burger,” made from ground turkey and rice, to retailers and foodservice distributors nationwide.

“We think that consumers, in terms of engaging with products like this, a lot of times the first place that happens is in a restaurant, off of a menu," Snee said during the conference. "So we are hard at work to make sure we have the foodservice offering that can help consumers connect with that space and make a decision if that's something they want to continue to pursue."

Hormel declined to comment further on the upcoming products.

Contact Joanna Fantozzi at Joanna.fantozzi@knect365.com

Follow her on Twitter: @JoannaFantozzi

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Is there room for competition in a market dominated by Beyond Meat and Impossible Foods?

The meat alternatives market is on fire.

Restaurant sales of meat-alternative products jumped 268% from 2018 to 2019, according to data from group purchasing organization, the Dining Alliance.

Beyond Meat Inc. and Impossible Foods Inc. have garnered the lion’s share of the growing segment, but an increasing number of other companies are providing alternatives to the alternatives.

Beyond Meat, founded in 2009 in Los Angeles, announced its initial public offering in May, valued at $25 per share, and it quickly shot past $171. Impossible Foods, founded in 2011 and based in Redwood City, Calif., got its “bleeding” Impossible Burger onto the menu at multiple major quick-service chains this year, including Burger King and Red Robin Gourmet Burgers Inc.

But despite the stronghold that those two meatless protein startups have on the fledgling meat-alternatives industry, reported product shortages allow room for competitors to gain a foothold.

Reports of Impossible Burger shortages hitting major partners, including Red Robin and White Castle, have surfaced. Bloomberg made calls earlier this month to a dozen Red Robin and White Castle units and found that only two locations had the popular meatless patties in stock, and the restaurants had no idea when they would get them back in stock.

Beyond Burger experienced similar shortages in 2017 and 2018, when the company’s supply could not keep up with increasing demand.

Impossible Foods has addressed these shortages, telling Nation’s Restaurant News that “like many successful startups, we are facing short-term ramp-up challenges resulting from demand greatly outstripping supply.” The company said it is in the midst of an aggressive hiring spree to keep up with demand and “plans to install a second production line in July that should double current capacity,” anticipating “that the second line will be fully staffed and ramped up in the fall.”

In addition to supply issues, both companies have seen rising competition. Springdale, Ark.-based Tyson Foods Inc., which previously had sold its stake in Beyond Meat, said it would launch its own line of meat-alternative products.

Here’s a look at some of the up-and-coming meat-alternative competitors:

Tyson Foods

After suggesting that it would enter the meat alternatives industry for months, Tyson Foods Inc. announced on June 13 that the company would soon be launching a new line of meat-free and blended protein products called Raised & Rooted.

Photo: Tyson logo
Credit: Tyson

The initial product portfolio will include plant-based nuggets made from blend of pea protein powder and other plant ingredients. The blended burgers made with a combination of plant-based ingredients and Angus beef.  Additionally, the company’s Aidells Whole Blends brand will be launching a line of sausage and meatballs, made with chicken and plant-based ingredients.

“Today’s consumers are seeking more protein options so we’re creating new products for the growing number of people open to flexible diets that include both meat and plant-based protein,” said Noel White, Tyson Foods president and CEO, in a statement. “For us, this is about ‘and’ – not ‘or.’ We remain firmly committed to our growing traditional meat business and expect to be a market leader in alternative protein, which is experiencing double-digit growth and could someday be a billion-dollar business for our company.”

Tyson will be launching the vegan nuggets to retail outlets nationwide this summer, with the blended burgers to join the lineup in the fall. No details were available concerning where the products would be available.

Tyson declined to comment further on the launch of the new product line.

Through Tyson Ventures, the company’s venture capital fund, Tyson Foods said it also continues to invest in start-up companies involved in alternative proteins, including mushroom-based protein producer MycoTechnology and cell-based meat producers Memphis Meats and Future Meat Technologies.

Nestlé Sweet Earth

Nestlé USA is another major food corporation diving into the plant-based proteins. In 2017, Nestlé acquired Sweet Earth, a Moss Landing, Calif.-based vegan foods manufacturer. Sweet Earth this year announced the launch of its new vegan burger product, Awesome Burger, and its ground beef component, Awesome Grounds, that will be headed to retailers in the fall.

Photo: The Nestle Sweetearth Awesome Burger
Caption: Hardy Wilson

Sweet Earth currently offers both organic and conventional versions of the Awesome Burger, and both are certified as containing no non-genetically modified organisms. (Advocates have criticized Impossible Foods for using genetically modified soy in the Impossible Burger).

Nestlé told NRN that the company plans to distribute the Awesome Burger and Awesome Grounds to supermarkets, restaurants and universities, though the company declined to comment on specific partnerships.

“Both the organic and conventional versions of the Awesome Burger are higher in protein and fiber than most other plant-based burgers — our conventional burger has 28 grams of protein and 6 grams of fiber,” Kelly Swette, CEO and co-founder of Sweet Earth told NRN. “This is because we use U.S.- sourced yellow pea protein, [which is] more protein-dense than green pea protein.”

Before the Butcher

Sweet Earth was not the only plant-based protein startup acquired by a major manufacturer. Sunset Beach, Calif.-based vegan foods brand Before the Butcher was acquired earlier in June by Gregg and Jeff Hamann, the owners of ground beef producer Jensen Meat Co.

The company also announced the upcoming national retail distribution of its “chicken,” “turkey,” “beef,” and breakfast “sausage” plant-based burger patties this summer to 3,000 stores, including three of the largest grocery retailers in the country. Following the distribution of their “B4Burger” portfolio, Before the Butcher will launch the rest of its Uncut vegan protein products, including ground “beef,” vegan chorizo and Italian sausage products.  

Photo: The breakfast sausage sandwich from Before the Butcher
Credit: Before the Butcher

Before the Butcher’s founder Danny O’Malley worked for Beyond Meat before starting his own vegan protein company in 2017, just one year after leaving Beyond Meat.

“I embraced the vision that the founder of Beyond Meat saw as well and I realized that there were opportunities far beyond what they were doing,” O’Malley told NRN. “They have amazing stuff going on, but the product line was limited. … We have a full family of plant-based products that supersedes our competitors, and we believe our nutrition is superior: our Uncut burger has 150 mg of sodium, while our competitors are close to 400 mg of sodium, and that was a strategic decision on our part.”

The B4Burger is made from non-GMO preserved soy protein, though many of their competitors have chosen to go with yellow or green pea proteins. O’Malley said that the decision to use soy was motivated by the “texture and bite” of the product that he believes more closely resembles ground beef.

O’Malley said he is not worried about competition and does not believe the market will become oversaturated.

“All of us [meat-alternatives producers] at our greatest capacity can’t even meet the demands of the market right now, so there is need for all of us,” O’Malley said. “We are all working toward the same goal. [Beyond and Impossible] have established this strong foothold but we are running right behind them.”

Moving Mountains

Photo: The Moving Mountains B12 burger.
Credit: Moving Mountains

The London-based Moving Mountains Foods — which has been dubbed the “Impossible Burger of Europe” — just announced a major partnership with the Hard Rock Café and will introduce its B12 burger (named after its vitamin B12-rich wheat, soy and pea protein patty) to 23 Hard Rock Café locations across Europe, including London, Rome, Paris and Prague.

Moving Mountains burgers can already be found in 3,000 fast-casual and casual-dining locations across Europe, including Applebee’s, Harvester, Ed’s Easy Diner, Nikki Beach and O’Neill’s Irish Pub & Bar.

Like the Impossible Burger, the B12 burger “bleeds” (with beetroot juice), but Moving Mountains does not want to be seen as “just another” meatless burger and must work within European food rules and regulations that restrict the usage of genetically modified products.

Although Moving Mountains is not available in North America, a spokesperson said the company hopes to launch its products abroad soon. 

Hormel Foods

Hormel Foods Corp., widely known as the brand behind the Spam canned pork brand, is exploring the growing alternative-meats industry and will soon launch a vegan pizza topping in response to increased demand for meat-free alternatives.

"The consumer seems to be speaking about having plant-based as a choice," said Jim Snee, CEO and president of Hormel, at the 2019 dbAccess Global Consumer Conference in Paris.

"We understand that it is a shiny new toy. We get that. It is one of our shiny new toys as well. It is something that is certainly on our minds, like it is everyone else, and there is a lot of work happening both in the market and behind the scenes."

This is not the company’s first foray into products that reduce meat consumption. Hormel recently launched its “Fuse Burger,” made from ground turkey and rice, to retailers and foodservice distributors nationwide.

“We think that consumers, in terms of engaging with products like this, a lot of times the first place that happens is in a restaurant, off of a menu," Snee said during the conference. "So we are hard at work to make sure we have the foodservice offering that can help consumers connect with that space and make a decision if that's something they want to continue to pursue."

Hormel declined to comment further on the upcoming products.

Contact Joanna Fantozzi at Joanna.fantozzi@knect365.com

Follow her on Twitter: @JoannaFantozzi

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Retailers adjust their merchandising strategies for health-oriented meat and poultry selections

The supermarket meat case is undergoing a makeover.

While commodity selections still account for the bulk of meat and poultry selections and sales, organic and other “specialized” proteins, including products that were developed without the use of antibiotics or growth hormones, are becoming increasingly prevalent.

While such options, which are typically more expensive than conventional alternatives, can potentially generate strong revenues for retailers, merchandisers must keep the newer items in the spotlight and educate shoppers on attributes and benefits if they are to spur wider shopper interest, analysts note.

Thirty-five percent of consumers already say that “free of antibiotics” is important when shopping for fresh foods, according to a January survey by Chicago-based market research firm Information Resources Inc. (IRI).

AJ’s Fine Foods offers organic fresh chicken and grass-fed beef year-round, and organic turkey during the holidays. (Photo: AJ’s Fine Foods)

In addition, IRI reported that while organic selections account for just 2% of meat sales, activity is on the upswing with 2018 organic sales increases of 23% for beef, 19% for chicken, 9% for turkey and 8% for pork.

And while total meat case dollar and pound sales were flat in 2018, products with no-antibiotics-ever claims had increases of 19.2% and 21.1%, respectively, IRI noted.

Fifty-two percent of consumers, meanwhile, indicated that they want their meat departments to carry more antibiotic-free selections as well as meats that are hormone-free or have no added hormones, and 38% desire additional organic options, according to The Power of Meat 2019 report. The Power of Meat is published by the Arlington, Va.-based Food Marketing Institute and the Washington, D.C.-based Foundation for Meat & Poultry Research & Education, and prepared by 210 Analytics LLC, a San Antonio-based market research and market strategies firm.

Yet, despite the greater shopper interest in such wellness-oriented items, many retailers are limiting sales by not adequately publicizing the products, said Jonna Parker, principal lead for IRI Fresh Food.

“The challenge for supermarkets is communicating to consumers that the foods are available,” she said. “Proper signage inside or outside the store will help make shoppers aware of the products, particularly for new items.”

A cost complication

The higher price of organic meat also is alienating many shoppers, Parker said, noting that just 20% of consumers indicate that organic fresh meat is important to them. The typical annual household income for organic meat purchasers is more than $200,000 and most buyers are highly educated with advanced degrees, she stated.

“Conventional supermarkets must recognize the need for organic meat programs in order to keep that consumer segment in their stores,” Parker said. “Retailers in the natural, foodservice and premium fresh store channels are after these financially secure households.”

Consumers are increasingly looking for claims messaging such as “no antibiotics” or “no hormones added” on meat packaging. (Image: Coleman Natural Foods)

The wider variety of retail outlets merchandising the specialty products also is making the items less of a competitive differentiator for supermarkets, said Anne-Marie Roerink, 210 Analytics principal.

“Virtually every channel, including limited assortment, club and supercenters, carries wide varieties of options,” she said. “The products are competitive musts. But because conventional meat and poultry represent the majority of sales, finding the right balance in assortment and pricing is crucial.”

While natural and organic proteins generate the strongest interest from younger shoppers, Baby Boomers are more interested in where the livestock was raised and the non-use of antibiotics and hormones, The Power of Meat reports, adding that product claims with universal interest include grass-fed, free-range, premium quality and vegetarian-fed.

Younger and affluent consumers in urban areas have the greatest interest in meats with production claims, but retailers still should spell out the advantages of the different attributes, Roerink noted.

“The industry incorrectly assumes that most consumers know what the various claims mean,” she said. “Signage is a good first step, but nothing is better than having knowledgeable associates who can explain product differences and create the ‘want.’”

Indeed, Roerink noted that “single cow burger” and “no feedlot ever” are two of the newer product claims and “most consumers have no idea what we’re talking about. It only creates doubt, questions and confusion in the minds of shoppers.”

Bashas’ promotes its selections with meat department signage, special offers through its digital couponing program and traditional advertising. (Photo: Bashas’)

Taste remains tops

Among the retailers highlighting and promoting specialty selections is Chandler, Ariz.-based upscale market AJ’s Fine Foods, which offers organic fresh chicken and grass-fed beef year-round, and organic turkey during the holidays. The offerings are promoted with point-of-sale materials, e-mail marketing and print advertising, said Dan Hosler, meat and produce buyer and specialist.

He added, however, that there has just been “a small uptick” in consumer demand for the items, and that price, taste and texture can be sales hurdles.

“Customers expect a high level of tenderness and flavor from all the cuts and the lack of natural marbling in some meats affects the overall taste and makes them tougher,” Hosler said. “There also is a significant cost increase for organic pork and beef.”

Indeed, the need for higher pricing is a major merchandising challenge for AJ’s Fine Foods parent Bashas’ Supermarkets, which carries organic and grass-fed ground beef along with organic boneless-skinless chicken breast, several lines of monosodium glutamate-free and antibiotic-free sausage and smoked meats and vegetarian-fed antibiotic-free chicken, said Tom Buttes, meat buyer.

Bashas’ promotes selections with meat department signage, special offers through its digital couponing program and traditional advertising, he said.

“Shoppers vote with their dollars so it is important to see what customers are buying and adjust the inventory to accommodate them,” Buttes noted.

Though the steeper price tag for organic meats and proteins with “free-from” claims will alienate some potential buyers, a strong base of shoppers still values such items, said Mel Coleman, vice president of Coleman Natural Foods, a Westminster, Colo.-based supplier of natural and organic meat and poultry.

“Many retailers are price-conscious because they have been raised in a commodity atmosphere,” he said. “Breaking that price-value, commodity-minded paradigm is challenging. It is not as prevalent as it was 10 years ago, but in many cases it still is there.”

Regardless of the price or amounts of claims, it is essential that consumers find the selections tasty if they are to regularly purchase specialty items, Coleman said.

He also agreed that claims on packages must be easily understood, as “consumers are reading labels more than they ever have.”

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While speaking in Japan, Trump also said there's a “very good chance” a deal with China can be brokered

Over the weekend, President Donald Trump spent time in Japan and said great progress was made in trade negotiations with the island nation.

In a joint conference with Japan's Prime Minister Shinzo Abe, Trump said the goal of the joint negotiations is to reduce the trade deficit with Japan and remove trade barriers -- and barriers of all kinds -- so U.S. exports will have a fair and profound footing.

 “Just over one week ago, U.S. beef gained full access to Japanese markets for the first time since 2003. We hope to have even more to announce on the trade very, very soon,” Trump said in the joint press conference with Abe. In a tweet earlier during the trip, he said much of the progress on trade will come after the July elections.

Great progress being made in our Trade Negotiations with Japan. Agriculture and beef heavily in play. Much will wait until after their July elections where I anticipate big numbers!

— Donald J. Trump (@realDonaldTrump) May 26, 2019

U.S. Meat Export Federation (USMEF) president and chief executive officer Dan Halstrom said he is encouraged by the recent launch of U.S.-Japan trade negotiations, noting that Japan’s new trade agreements with the European Union and countries participating in the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP) have put U.S. pork and beef at a significant disadvantage in the leading value market for both products.

Halstrom added that gaining access to Japan for U.S. beef from cattle of all ages, which was announced last week and took effect May 20, will provide immediate, added momentum for U.S. beef exports.

According to Iowa State University economist Dr. Dermot Hayes, U.S. pork will see exports to Japan grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years if the U.S. quickly gains access on par with international competitors. Hayes reported that U.S. pork shipments to Japan will drop to $349 million if a trade deal with Japan on these terms is not reached quickly.

While speaking in Japan, Trump also took the opportunity to discuss the ongoing holdup on negotiations with China.

“As far as China is concerned, they want to make a deal,” Trump said. “I think they probably wish they made the deal that they had on the table before they tried to renegotiate it. They would like to make a deal. We’re not ready to make a deal, and we’re taking in tens of billions of dollars of tariffs, and that number could go up very, very substantially very easily, but I think sometime in the future, China and the United States will absolutely have a great trade deal, and we look forward to that.”

Trump also praised American farmers, calling them patriots several times, for continuing to support efforts to hold China accountable. He said the farmers he has met with continue to say they don’t want subsidies. “They want a level playing field. That’s all they want, because they’re better than anybody in the world,” Trump said.

However, the Trump Administration has offered another round of subsidies to aid farmers faced with a tariff-constrained Chinese export market for many agricultural goods. Trump claims that the tariffs on China are bringing in “tens of billions of dollars” and that the $16.5 billion trade aid package is a “relatively small percentage” for U.S. farmers.

“As you know, they’ve earmarked and they’ve gone after the farmer, thinking that if they hurt the farmer, I’m going to negotiate a bad deal for the rest of the country,” Trump said of China’s retaliatory actions. Trump said he’s giving the subsidies to farmers while China takes advantage of the U.S. and farmers in particular.

“I believe that we will have a very good deal with China sometime into the future, because I don’t believe that China can continue to pay these, really, hundreds of billions of dollars in tariffs,” Trump added.

This piece originally appeared on Feedstuffs, a Supermarket News sister website.

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