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Ground Rules.

Byline: Jennifer Strailey

Increasingly, American shoppers are "steaking" their claim to all-natural and organic meat. By and large, those buying organic and natural meat products do so because they believe consuming them has a long-term health benefit.

According to the sixth annual "The Power of Meat 2011" study, commissioned jointly by the Washington-based American Meat Institute (AMI) and the Food Marketing Institute (FMI) in Arlington, Va., 44 percent of shoppers cite health as the reason they purchase organic meat and poultry, while 37 percent point to better health and treatment of the animal. One-third of shoppers also perceived the organic options as offering better nutritional value, better taste and more freshness.

The report, conducted by San Antonio-based 210 Analytics and based on a national online poll of 1,201 consumers in November 2010, found that one in five shoppers has purchased natural and/or organic meat or poultry in the past three months. Notably, half of these natural/organic meat purchases were made at conventional supermarkets, while natural food stores accounted for just 19 percent of total natural/organic meat and poultry buys.

But as truly progressive grocers know, commanding stronger sales in a category such as natural and organic meats has less to do with retail positioning and more to do with how you slice it. To explore the trend in natural/organic meat, PG visited three retail channels: a natural food co-op, a specialty grocery market and a traditional supermarket. What we found were three distinct retail approaches with one commonality: success.

* Wheatsville Food Co-op: A Cut Above

Location: Austin, Texas

Year Opened: 1976

Stores: One

Store Size: Approximately 8,500 square feet

Cut a path to the meat department at the Wheatsville Food Co-op in Austin, Texas, where unprecedented growth is the order of the day. On a "slow" week this year, sales were still up 18 percent over last year, and it's not uncommon for the department to be up 50 percent week over week from 2010 sales.

Deli Manager Dana Tomlin attributes the co-op's categorical success to a number of factors, including the store's commitment to sustainably raised and organic meat products, along with an aggressive sampling program that has the department offering tastes of its offerings to customers three times a week. On a recent afternoon, the meat department sampled its latest case entree, goat, but Tomlin also serves up less exotic items such as hangar steaks "because they're pretty specialty for a grocery store."

Serve Yourself

The self-serve meat case at Wheatsville Food Co-op offers a wide array of products.

A philosophy of sustainability is part and parcel of everything in the co-op's 12-foot self-service meat case, 4-foot full-service case featuring ready-to-cook items, and two freezer doors filled with meat. "We essentially look for the best choices," says Tomlin. "When the goat vendor came to me, the first thing I did was go to their website and read everything I could about them, because that's the first thing my customers are going to do."

Generally speaking, Wheatsville's customer base comprises three kinds of shoppers. "There are the folks who shop here because they live close by and it's convenient. Then there are the customers who are predominantly concerned with good food and taste Co they're our core customers who are very opinionated. They know exactly what they're looking for and they have very high standards," explains Tomlin, adding that she endeavors "to stay a step ahead of those customers."

With that in mind, Tomlin is scrupulously selective in the vendors with which she works. "We look for producers who are taking care of the land. We look for products that are antibiotic-free. And we look at how the vendors raise their animals," she says. "We also visit the farms whenever possible." Wheatsville Co-op has even invited its customers to join management on visits to local farms.

This policy is beneficial to the bottom line and to the bond between staff and customers, notes Tomlin. "It's part of getting that story out there and letting people know that I've been to the farm and seen the animals. Our customers want to trust us and we want to do everything possible to earn that trust," she says.

Motivational 'Meat' & Greets

One of the reasons Wheatsville's meat department sales are more than making the cut is the co-op's "open-book" management style, which fosters a highly motivated staff. For the past year and a half, the store has been holding weekly meetings for managers and all employees who want to discuss the co-op's financials, number of owner-members, weekly sales, customer traffic and more.

"Talk about sustainability," says Tomlin. "The open-book management has created a sustainable staff. It empowers everyone. If all the businesses in the world ran like this, I don't think there would have been a recession."

The entire staff pays for a bonus every quarter that is based on a calculation of margin minus labor. Each department participates. If the co-op makes the numbers guaranteed to its member-owners, the overage is applied to quarterly bonuses.

"Before, I was always trying to get my team to sample regularly and to talk with customers about the products. It was always me saying, 'Come on, come on. Get excited about this!' Now they just do it," asserts Tomlin, noting that the interaction comes naturally.

Merchandising Tri-Tips and More

Wheatsville further boosts sales with weekly kitchen meetings for the meat, deli and cheese departments. "We vote on the product that we're most excited about each week. We call it our 'Come and Get It!' and we all promote it throughout the week," explains Tomlin.

Equally effective merchandising defines the co-op's straightforward signage. Tomlin recently conceived signage to address the question of: "Why don't we have a larger selection of organic meat?" The signage became an avenue to educate customers about brands such as Niman Ranch, which Tomlin recently visited in Thornton, Iowa. "I feel like Niman Ranch takes such good care of the land with crop rotation, and they take good care of their animals and their farmers. For me it's not all about organic; it's about the big picture. Companies like Niman Ranch were created to help small U.S. farmers stay in business."

* Prime Time at Marczyk Fine Foods

Location: Denver

Year Opened: 2002

Stores: Two

Employees per Location: 35

Store Size: 8,000 and 7,000 square feet, respectively

Maybe it's the staff's T-shirts emblazoned with slogans like "Pig Love" and "Meat Yum." Or perhaps it's the passionate and knowledgeable help behind the counter. But this much is certain: The meat department at Marczyk Fine Foods in Denver isn't your average chop shop. A specialty store known for its high-quality, custom-cut meats; cheeses; scratch-baked goods; wine; and other handmade provisions, Marczyk Fine Foods has been defined by its commitment to local, sustainable foods from the beginning. Its butcher counter, supplied largely by family farmers, is no exception.

"We look for animals raised by family farmers in non-confinement facilities, first and foremost," notes COO Paul Marczyk. "Every animal has a different rule. With beef, for instance, we only sell 'never-ever' meat, which means the animal has never been administered antibiotics or hormones." All of the beef in Marczyk's case is also 100 percent vegetarian-fed, and selected for the genetics of the breed, as well as the sustainable and humane husbandry practices of the farm from which it hails.

Not Your Average Chop Shop

Marczyk Fine Foods offers high-quality, custom-cut meats.

The result of these standards, asserts Marczyk, is not only beef he can feel good about selling, but also a better-quality product. "We firmly believe that marbling doesn't produce the best-tasting meat. It's how the animal is raised, in a low-stress environment, and the strong genetics of the animal that make it the best for eating," he says.

Marczyk poultry is also antibiotic-free and 100 percent vegetarian-fed. The store exclusively sells poultry that has been air-chilled. "We think this makes for a better-tasting bird and firmer meat," explains Marczyk.

Founded by Paul Marczyk's brother, Pete, Marczyk Fine Foods distinguishes itself from the competition by its willingness to work with an array of producers, many of them small local farms. "From the outset, it's been a highly differentiated supply chain," notes Paul Marczyk. "We figure out how to work with one-offs. That's really hard for a lot of businesses, but we create the systems to make that possible."

More Top-Quality Meat

Marczyk Fine Foods' second store opened in August.

For example, the store sources all of its heritage turkeys from a farm just 30 miles east of Denver. "If local is an option, then we'll pay more for local," continues Marczyk. "It puts money back in the community, and it means fresh product that hasn't traveled very far."

Guiding Lights

An image of Paul and Pete Marczyk watches over the scene at one of their stores.

'Meat on the Street'

For the past two years, Marczyk meat department sales have been up between 10 percent and 15 percent. With the opening of a second store in August, Marczyk anticipates total meat sales will be up 90 percent. A combination of street-smart merchandising and strong community spirit is fueling this success.

Like those of many specialty markets, Marczyk's meat prices are often higher per pound than conventional supermarkets. Before the first Fine Foods store had even opened its doors, founder Pete Marczyk was already brainstorming how he would position his sustainably raised hamburger meat Co ground fresh at the store from a single muscle and priced at $4.99 pound Co when down the street, the local supermarket was selling hamburger for $1.99 a pound.

He swiftly launched "Meat on the Street," and Friday nights on 17th Avenue in downtown Denver have never been the same. Marczyk prepares 7-ounce hand-formed burgers and grills them out in front of the store on Friday nights from May to October. It's a simple affair. Customers can order them well done, medium or rare, and with cheese or without. The burgers, priced at $6.99 each, are served on a locally made brioche bun that can be dressed with a variety of condiments on hand.

"We created a vehicle to get this meat in people's mouths," recalls Paul Marczyk, who still marvels at the Friday night crowds. "In the beginning, we sold 30 to 40 burgers a night. Nine years later ,we are selling between 200 and 350 burgers a night."

To draw people inside and drive add-on sales of beverages, potato salad and desserts, customers must pay for their burgers at registers in the store. Outside, freshly grilled burgers and a hodgepodge of picnic tables and patio furniture await.

In spite of its phenomenal success, Marczyk is quick to note: "Burger night is really not about the burgers we sell. It's about community and the animation in front of the store."

* Brookshire Bros. Beefs Up Natural Selection

Location: Tyler, Texas (Corporate headquarters)

Year Founded: 1921

Stores: More than 100 supermarkets and convenience stores

Average Store Size: 40,000 square feet

Start a conversation about meat retailing within 100 miles of Austin, Texas, and the name Norman Weaner is bound to come up. Market manager at Brookshire, Bros.' Wimberley, Texas, store, Weaner has been in grocery retailing for 40 years. A veteran of the meat business, he's seen trends come and go, but not this time.

"The way I see it, survivability in grocery retailing depends on the sustainability of the products you carry," he asserts. "In the next five to 10 years, I see supermarkets flipping from 30 percent natural and 70 percent conventional to 70 percent natural and 30 percent conventional."

In the past year alone, Weaner has observed a 50 percent increase in demand for all-natural products in the meat department and throughout the store. The market he manages in Wimberley is one of two Brookshire Bros. locations within 40 miles of Austin that are making a concentrated push to promote all-natural products.

What Comes Naturally

The self-serve meat case at Brookshire Bros.' Wimberly, Texas, store showcases all-natural items. (Photo: Diane Therrien)

At the Wimberley store, younger customers and health-conscious baby boomers are driving the demand for all-natural meat, says Weaner. "The younger generation, the 20- to 40-somethings, are really looking for all-natural, and they will almost do without if they can't buy it."

Weaner oversees the meat department, where in addition to a 48-foot, five-deck meat case and a full-service counter, he also manages an 8-foot, four-deck case devoted exclusively to some 40 selections of all-natural meat. Sales of all-natural pork, notes Weaner, are growing faster than beef, but together they have grown more than 50 percent over the past year.

It's a remarkably different landscape than just two and a half years ago, when Weaner first introduced natural meat at the two Brookshire Bros. stores, with the Niman Ranch brand. "For six months, I woke up every morning and tried to decide if I was keeping the line or losing it. I merchandised that meat nine different ways to Sunday," he recalls.

Gimme Three Steps

What came out of Weaner's exhaustive trial-and-error meat merchandising were three powerful concepts that in concert have proved to be runaway successes in the all-natural meat category.

No. 1: "My merchandising technique for all-natural red meat is to make it the reddest part of my counter, like I just brushed it with red paint," says Weaner. "It's gorgeous." His secret is to source the freshest product, cut the meat in the afternoon and grind it the next morning. He fills the all-natural meat case with $400 to $500 worth of fresh retail product each day.

No. 2: Next, Weaner started creating special ad circulars for the two Brookshire Bros. stores emphasizing all-natural products. "It has definitely helped pick up sales," he notes. In the past seven months, he has created more than a half-dozen all-natural-only ads. He typically surrounds an all-natural meat selection with marinades and vegetables that also fit the bill.

No. 3: "In Texas, we tend to eat big," observes Weaner, noting that a typical steak in the conventional meat case is cut an inch-and-a-half thick. The problem was that the price difference between a conventional cut and an all-natural cut was a deal breaker for some customers. The solution? He began offering smaller cuts in the natural case. "Now when you look at the all-natural case and then at similar items in the regular case, the price is the same. The customer doesn't care that the portion is 4 ounces less if the dollar ring is there," he notes. "That strategy really helped the all-natural meat to fly."

Finally, Weaner believes that today's younger shoppers are distinctly different from their older predecessors, and that marketing to these differences is critical. "Younger customers want to be shown how to cook meat. They want to be led by the hand and they want recipes," he observes. As an example, he points to recipe card racks in his meat and seafood departments that he used to change out quarterly. "Now I could reload them every six days."

'Never-ever' Land at Niman Ranch

"The 'never-ever' natural beef industry accounts for less than 1.5 percent of the entire beef industry," says Ashley Di Blasi, communications manager for Alameda, Calif.-based Niman Ranch, referring to meat that has never been exposed to antibiotics or growth hormones.

This eye-opening statistic was repeated frequently at Niman Ranch's Hog Farmer Appreciation Dinner in Des Moines, Iowa, this past August. The evening was a celebration of the more than 675 independently owned farms and ranches located in 26 states with which Niman Ranch works. Each year, Niman Ranch honors the "best of the best" of these farmers and ranchers with a gala awards night.

The roots of Niman Ranch go back to the early 1970s and the original 11-acre ranch north of San Francisco, where cattle were raised using traditional humane husbandry methods and fed an all-natural diet. In 1995, hog farmer Paul Willis of Thornton, Iowa, joined Niman, bringing with him an old-fashioned commitment to raising hogs. Today, Niman Ranch offers beef, pork, lamb, poultry and eggs.

With its rigorous farming and husbandry standards and practices, Niman Ranch is leading the charge to better define sustainability. Its official definition of the term is: "Methods of farming and ranching that allow for the production of crops and livestock in such a way that does no harm or damage to the land or its natural resources, preserving both for future generations."

Niman Ranch's strict protocols for humane animal care were written with the help of Dr. Temple Grandin, animal welfare expert, Colorado State University professor and author, as well as the subject of the award-winning HBO film "Temple Grandin." All Niman Ranch livestock are raised outdoors or in deeply bedded pens with continual access to food and water. The livestock is fed a 100 percent natural vegetarian diet.

"Sustainability is a buzzword within the industry," observes Di Blasi. "But like 'all-natural' was 30 years ago, it's loosely defined. In order to create meaningful interest in sustainability, we have to first establish a clear definition and then help the public understand that definition."

Natural Poultry, Please

Giving natural/organic beef a run for its money is the increasingly popular natural/organic poultry category. According to "The Power of Meat 2011" study, shoppers of natural/organic meat and poultry bought chicken more frequently than beef, ground beef, turkey or pork. Sixty-seven percent of study respondents had purchased chicken in the past three months, while 48 percent had purchased beef.

Driving this interest are supermarkets across the country that have introduced enticing natural poultry programs. Nugget Markets, based in Woodland, Calif., recently launched an air-chilled "Smart Chicken" promotion featuring the talent of Mike Yakura, chef at San Francisco's Ozumo restaurant. The promotion includes online cooking demos, an opportunity to win dinner with Yakura, recipes and more.

"Retailers across the country are launching organic or antibiotic-free meats either branded or under their own private label programs," observes Eva Safar, VP, marketing for Coleman Natural Foods in Golden, Colo. She names national retailers like Kroger with its Private Selection chicken and pork, and Safeway with its O Organic and Open Nature chicken, pork and prepared foods.

"Many other local markets or smaller chains are working with growers like us to provide a source for all-natural and/or organic, sustainably farmed animals," says Safar, adding that unlike organic, 'sustainably raised meat' is a confusing term because a clear definition from a regulatory agency does not exist."

To educate customers about the meaning of sustainability, Safar sees retailers "including information about the quality of life that chicken or hog had before it made it to our table" by listing grower website information on the packaging and by stocking informative pamphlets at the meat case. "Some retailers offer a Facebook page just for their meat department, which gives that department a specific outlet to market to their consumers," she adds.

Recognizing that food safety is an underlying factor for many consumers who buy natural/organic meat and poultry, Coleman recently launched a "Trace our Tracks" initiative for its Rocky and Rosie fresh organic chicken brands from Petaluma, Calif. The program allows consumers to trace back a pack of chicken to its farm of origin, using a QR code. Customers get a history of the farm, its raising practices, images of growers, a coupon and recipes.

MORE ONLINE - To learn about sustainably raised proteins, visit www.progressivegrocer.com
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Author:Strailey, Jennifer
Publication:Progressive Grocer
Date:Oct 1, 2011
Words:3682
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