Beef s Value to Retailers: The Business of Beef

Beef s Value to Retailers: The Business of Beef

The Business of Beef Beef offers retailers: Financial value Marketing power Influence on a retailers image Make Beef a focal point of retail merchandising and marketing efforts

Beef s Financial Value to Retailers Beef alone accounts for 8% of total supermarket sales and 50.9% of total meat sales Pork 19.09% Lamb 0.86% Veal 0.28% Turkey 5.42% Other 0.71% Beef (Excluding Ground) 31.67% Chicken 22.74% Ground Beef 19.24% *Excludes Seafood SOURCE: FreshLook Marketing Retail Scanner Data/VM Meat Solutions, Total US, 2008-2012

Beef s Financial Value to Retailers Consumers build their meals around beef Sales of complementary items like produce, condiments and bread drive profitability

Beef s Financial Value to Retailers One pound of beef nets more dollar sales than the total meat department s combined average $4.37 $4.07 $3.61 $3.65 $3.52 $3.64 $2.73 $2.74 $2.63 $2.72 $2.95 $3.08 2007 2008 2009 2010 2011 2012 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 SOURCE: FreshLook Marketing Retail Scanner Data/VM Meat Solutions, Total US, 2007-2012

Beef s Financial Value to Retailers Beef has a high inventory turn ration which results in a positive cash flow for retailers Received Shipped to Store Processed and Sold

Beef s Financial Value to Retailers Retailer Store Departments Inventory Turns Per Year Departments All Stores Independents Small Chains Large Chains Produce 56.4 58.9 42.7 56.4 Meat 35.3 37.0 30.4 35.0 Dairy 36.0 37.8 29.2 38.7 Dry Grocery 12.9 12.9 10.4 14.3 Total 14.4 14.6 13.9 13.5 SOURCE, FMI, The Food Retailing Industry Speaks, 2011

Beef s Marketing Power Beef has a high positive marketing threshold with consumers due to high usage and its center-of-the-plate appeal Beef is a Meal Builder Percent of Consumers Home Cooked Dinner Choices that Include Meat SOURCE: Power of Meat, 2013

Beef s Marketing Power Beef has more cut items than other species Species # of Item Descriptions Beef 640 Pork 340 Chicken 320 Turkey 260 Lamb 215 Source: Beef s Value to Retailers, 2013 9

Beef s Marketing Power Beef is the most advertised protein in the fresh meat category Total of Sample Stores with Ad Source: Beef s Value to Retailers, 2013

Beef s Marketing Power Beef is the most advertised protein in the fresh meat category Total of Sample Stores with Ad Class 2011 2012 Beef 5,624,020 5,368,170 Chicken 3,772,620 3,836,730 Pork 2,945,160 2,925,740 Source: Beef s Value to Retailers, 2013

Influence on Retailers Image Low prices, product variety and high quality meat plays a significant role in a consumer s primary store choice Beef influences all these image components Number of Shoppers: 1,026 Not at All Important % Not Too Important % Somewhat Important % Very Important % All Shoppers 2010 % All Shoppers 2009 % All Shoppers 2008 % Low Prices * 4 22 74 75 75 73 High-Quality Fruits and Vegetables 1 4 26 69 73 72 75 Items on Sale or Money-Saving Specials 1 6 32 60 67 66 66 High-Quality Meat 4 5 25 66 66 69 72 Clean, Neat Store 1 2 39 57 66 68 72 Great Product Variety 1 4 33 62 65 65 N/A Accurate Shelf Tags 1 3 33 63 65 64 68 Convenient Location * 8 44 46 63 65 66 Use Before/Sell-By Dates Marked 2 7 35 56 63 63 64 Courteous, Friendly Employees 2 9 45 44 54 53 60 Fast Checkout 1 7 47 44 52 49 54 Personal Safety Outside the Store 4 12 39 46 50 49 51 Store Layout That Makes it Easy To Shop 1 7 47 45 47 49 53 Fresh-Food Deli 7 21 36 36 43 44 45 Knowledgeable Employees 3 17 46 33 41 40 40 * = Less than 0.5 percent of responses SOURCE: FMI, U.S. Grocery Shopper Trends 2011

Marketing Strategy 98% of retailers differentiate themselves through the quality of their perishables departments Source: Beef s Value to Retailers, 2013

Beef Checkoff Resources to Market Beef Merchandising Point-of-sale Merchandising programs Recipes & images Consumer education and outreach resources Customized support with in-store marketing Training Sales Data and Shopper Insights Retailer newsletters Beef cut guides and charts Better Beef Sales Educational cutting videos Food safety resources Retail sales data Wholesale price chart Market research Insights on consumer perceptions, behaviors

Summary Beef is - and should continue to be - a focal point of every grocer s meat department merchandising and marketing efforts Beef accounts for half of a store s total meat sales One pound of beef drives more dollar sales than other proteins The meat department is a top factor when shoppers select a store to shop at

Beef s Value to Retailers: QUIZ 1. True or false: Beef alone accounts for just under half of all supermarket meat sales. 2. What of the following is true about beef and complementary sales? A. Consumers build their meals around beef B. Sales of items purchased to complement beef drive profitability C. Consumers complement a beef purchase one week by buying less the next D. A and B

Beef s Value to Retailers: QUIZ 3. Pound for pound, which of the following proteins drives more dollar sales? A. Chicken B. Turkey C. Beef D. Pork

Beef s Value to Retailers: QUIZ 4. Which of the following proteins receives the most advertisement? A. Beef B. Lamb C. Eggs D. Pork 5. True or false: Two-thirds of consumers consider the quality of meat very important when selecting a primary grocery store.

Beef s Value to Retailers: QUIZ 6. Beef deserves to be a focal point of every grocer s meat department because: A. 98% of retailers differentiate store quality through perishables like beef B. Consumers build their meals around beef C. Beef alone makes up 8% of total supermarket sales D. All of the above

Beef s Value to Retailers: QUIZ KEY 1. False (Slide 3) 2. A and B. (Slide 4) 3. C. Beef (Slide 5) 4. A. Beef (Slide 11) 5. True (Slide 12) 6. D. All of the above. (Slides 3, 4 and 14)

Resources Retail Pricing and Sales Data http://www.beefretail.org/salesdata.aspx Beef Merchandising Programs and Resources http://www.beefretail.org/ Shopper Insights www.beefretail.org/shopperinsights.aspx Beef Product & Market Research www.beefresearch.org Food Marketing Institute www.fmi.org