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Consumer Research Highlights. Retail Advisory Committee April 27, 2011. To review today. Current Research Highlights Pricing and Promotion Meat to Meals, Part 1 Who is the Pork Champion? (consumer segmentation) Planned Research Overviews Pork Champion Consumer Survey - PowerPoint PPT Presentation
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Consumer Research Highlights
Retail Advisory CommitteeApril 27, 2011
2
To review today
Current Research Highlights• Pricing and Promotion• Meat to Meals, Part 1• Who is the Pork Champion? (consumer segmentation)
Planned Research Overviews• Pork Champion Consumer Survey• Meat to Meals, Part 2
Pricing and Promotion Research
3
The goal: Utilizing available resources and data, provide “best practices” for key facets of pricing and promotion to optimize fresh meat performance
4
Findings: TimingSome cuts currently considered “seasonal” can be effectively merchandised year round
“Off season” has been defined by retailers and can be significantly altered to build added sales opportunities
While regional differences exist, there are opportunities to close the “seasonal” gap in every region
$Results
5
Significant opportunity : Close gap between holiday sales and remaining time periods
Total U.S.
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
40% gap
Source: VM Meat/FreshLook, 52 weeks 2009/2010 data arranged by week to begin 1/1
6
Total U.S.
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
Chops are consistent year round, similar to ground beef and chicken, and merit additional focusRoasts exhibit seasonality, but have consistent “off season” sales as wellRibs show the greatest seasonality, but have solid “off season” sales potential
Chops
Roasts
Ribs
Pork ribs – even in the off season – are a
strong item outselling other promoted
species/segments (whole chickens, beef
roasts)
Source: VM Meat/FreshLook, 52 weeks 2009/2010data arranged by week to begin 1/1
Pork example
7
Findings: Depth of Discount
Optimum range of discount – for all species and segments – is about 10% (+)
Deep discounts (30%+) do not consistently build baseline sales/shopper loyalty and do erode profits
$Results
8
Similar Patterns exist between Species for Volume, Sales and Profitability
0100200300400500600700800900
1000
Pounds Sales Profit
Depth
Beef Chicken Pork
050
100150200250300350400450500
-300-250-200-150-100
-500
50100150200
Source: Composite database, retailer analysis
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
9
0
200
400
600
800
1000
1200
1400
1600
0
100
200
300
400
500
600
700
800
Depth
Pounds Sales Profit
Chops
Roasts
Ribs
-500
-400
-300
-200
-100
0
100
200
300
Source: Composite database, retailer analysis
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
And within pork category
10
% Change Vs. Baseline At Different Discount Levels
Chops Roasts Ribs
…Thru to the Sub-Category Level
≤ 10% 11-20%
21-30% >30% ≤
10%11-20%
21-30% >30% ≤ 10% 11-
20%21-30% >30%
Pounds 267 284 293 497 162 189 387 712 513 543 596 1424
Sales 168 145 126 222 137 142 263 412 328 297 340 412
Profit 174 94 (16) (45) 59 (73) (233) (385) 184 162 136 (58)
0
200
400
600
800
1000
1200
1400
1600
0
100
200
300
400
500
600
700
800
Pounds Sales Profit
-500
-400
-300
-200
-100
0
100
200
300
Source: Composite database, retailer analysis
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
10% 20% 30% 40%Depth of Discount
% C
hang
e vs
. Bas
elin
e
11
Findings: Product Mix
$Results
Too much emphasis on single segment/species misses the consumer’s inherent need for variety
Too much emphasis encouraging trade down sacrifices profit margin and risks dissatisfying shoppers
Opportunity for increased promotion on Premium Beef segments and across all Pork segments
12
Findings: Frequency of FeaturingPoints out need to increase frequency across species/ segments versus focus on only conventional items (ground beef/boneless skinless chicken breasts)
“Broader” promotion can produce incremental (versus cannibalistic) results– Broadening promotion to, for example, both
bone-in and boneless pork chops can grow both segments
$Results
13
Findings: Vehicle
Ads typically act as a “reminder to purchase” trigger – not exclusively about pricing
Shoppers want new meal ideas but meat department not delivering in-store or, oftentimes, online
$Results
Next Steps: Pricing and Promotion Research
14
We will review this dataset in depth and identify other key findings to share with retailers
15
How America Shops for Meat and Meals
16
Objectives:• To better understand meal planning and the role of fresh meat• Identify opportunities to gain a larger share of meals
Methodology:• Web-based survey• 2,000+ respondents• Geographically and demographically dispersed; representative of U.S.• Primary shopper of food• Meat consumers• Ages 25 - 64
Research background
17
Key Learnings
The meat department is truly a centerpiece in shoppers’ lives, serving as a core department for family meals
There is great opportunity in the meat case to improve “shopability” and become a source for new meal ideas
There are distinct types of shoppers based on meal planning; each represents meat case opportunities
18
Research Showed that Shoppers can be Grouped according to their level of Planning prior to Shopping
Which of the following is closest to your most typical approach to planning your dinners on a weekly basis?
Before going shopping, I/we plan what we will have for dinner for 5 or more nights
Before going shopping, I/we plan what we will have for dinner for 3-4 nights
Before going shopping, I/we plan for 1-2 nights and decide the rest later
I/we do not really plan out our dinners before going shopping; I just decide while in the store
I/we do not really plan our dinners; we decide each night based on what’s in the refrigerator/freezer and what we are in the mood for
17%
18%
16%
19%
30%
35%
35%
30%
Medium Planners
Non Planners
Heavy Planners
19
<$35,000
$35-$75,000
>$75,000
34%
43%
23%
Income
Series1 12%
36%
29%
23%Education
Some High School/ Degree (or equivalent)
Some College
College Degree
Post Graduate Degree
<$35,000
$35-$75,000
>$75,000
35%
40%
25%
Income
<$35,000
$35-$75,000
>$75,000
44%
37%
19%
Income
Heavy Planners
Medium Planners
Non Planners
Series1 11%
34%
32%
23%Education
Series1 9%
31%
31%
26%Education
Some High School/ Degree (or equivalent)
Some College
College Degree
Post Graduate Degree
Some High School/ Degree (or equivalent)
Some College
College Degree
Post Graduate Degree
48%
45%
40%
66%
65%
56%
Heavy Planners had Higher Household Income and Education Levels
20
Attitudes Toward Home Cooking Vary Across The Three Shopper GroupsHeavy Planners enjoy cooking and believe home
cooking is healthierI enjoy cooking
My family enjoys when I cook
I/we prefer to eat at home as a family
A homemade meal is healthier than prepared foods from the grocery store
A homemade meal is healthier than prepared foods from a restaurant
72%
76%
80%
80%
80%
68%
70%
67%
78%
76%
55%
67%
64%
69%
73%
Attitudes Toward Cooking% Agree Completely/Somewhat
Non Planner Medium Planner Heavy Planner
21
Meat Department Is Important In Choosing Their Store
Heavy Planners Medium Planners Non Planners
85% 85%79%81% 79%
73%
60% 57%47%
Produce Meat Deli
Prod
uce
Mea
t
Deli
Prod
uce
Mea
t
Deli
Prod
uce
Mea
t
Deli
Importance In Choosing Store – % Very/Somewhat Important Top 3 Departments
22
Only about One in Four Shoppers is Loyal to one Meat Department
% Meat/Poultry Purchased At Your Main Store
100% 75-99% Up To 75%
24% 41% 35%
22% 43% 35%
27% 37% 36%
Heavy Planners
Medium Planners
Non Planners
23
Why are Shoppers Buying Meat Elsewhere?
80% 77% 76% 73% 70% 68%75% 74% 72% 74%
66%62%
76%71% 71%
64%59% 59%
Reasons For Buying Meat Elsewhere
Heavy Planners Medium Planners Non Planners
24
The Meat Department is not a Key Source for Meal Info
Cookbooks Friends & Family Websites/Internet (i.e. blogs)
Food Television Shows
Magazine Meat Department In the Store
Restaurants
62%
50% 49%43% 41%
31%
22%
52%
44%39%
37%33%
28%
20%
43% 41%
30% 29% 27%23%
16%
Heavy Planners Medium Planners Non Planners
Sources For New Meal Ideas% Very/Somewhat Important
25
Summary: Conclusions/Action Steps1. There are different shopper types, each with different needs
2. Each shopper type believes the fresh meat case is critical in driving store choice
3. Over one-third of all shoppers purchase up to 75% of their meat at a different store from where they do the majority of their shopping - - indicating a lack of loyalty
4. Shoppers are seeking a more “shoppable” meat department that:• Is “attractive, clean”• Offers “variety”• Is “interesting/fun to shop”• Makes shopping for fresh meat easier
5. Shoppers want meal ideas - - communication goes beyond just pricing
26
Next Steps: Meat to Meals ResearchWe will use portions of this research as a benchmark
and utilize additional research methods such as shop-alongs, online survey, and in-store observationThe ultimate goals are to identify key opportunities
to influence fresh meat decisions within the shopper’s planning process and pinpoint effective
methods of reaching consumers during their shopping experience in order to increase fresh meat
purchases at retail
27
NPB’s Consumer Segmentation Research – Identifying Our Target
28
Goals of this researchUnderstand all U.S. pork consumptionDetermine the right consumer Target – our Pork
ChampionDevelop the right consumer MessageCreate an on-going consumer insights resource
for use with retail partners
29
What are the characteristics of the Pork Champion?
Our core consumer loves pork, meat, and the whole meal– Enjoy trying different types of meat or poultry, and different ways of
preparing them– Believe meat is an important part of the meal, and side dishes are just
as important
Enjoys cooking & food– Take pride in their cooking skills; are confident cooking pork– Like to try new things at restaurants, and make restaurant dishes at
home
Loves life– Confident and optimistic, social and altruistic– Feel good about their lifestyle– Want to try new things
30
The Pork Champion28% of the population accounts for 78% of fresh pork
consumed at home
U.S. HHs FRESHAt Home
FRESHAway
PROCESSEDAt Home
PROCESSEDAway
28% 78% 51% 38% 35%
Source: NPB Consumer Segmentation Study, 2010
31
Who are these Champions?
Women and men both included in targetMarried, in a smaller householdBoth working full-time outside the home35-64 years oldCollege grad, making $50K-$99K per HHAny ethnicity, living anywhereMedium/heavy pork userMedium/heavy meat & poultry userA confident cook, but not a foodie
32
How We Reach our 2014 GoalBaseline
Our
Por
k Ch
ampi
ons
76
68
42
Goal
88
77
48
2011 2012 2013 2014
+3
+0
+1
+6
+1
+3
+9
+3
+6
+12
+6
+9
10% Growth
Annual Fresh Pork Eatings
Heaviest
Lightest
33
Next Steps: Reaching the Pork Champion
Pork Champion Consumer Survey
34
Goal of this researchSolicit feedback regularly from Pork Champion target
consumers on marketing programs, communication elements and other topics of interest to the Retail Marketing Team, Domestic Marketing and other NPB program areas, as well as retail partners
Ultimate goal: Better understand and more effectively communicate with Pork Champion target
35
Pork Champion Consumer Survey Quick Overview
Survey 1000 randomly selected Pork Champions on a quarterly basis
Maximum of 10-12 questions per survey, with two being open-ended
Survey questions submitted by:– Retail Marketing Team– Domestic Marketing and other NPB program areas– Retail partners
Conduct three surveys in FY2011 (quarterly in subsequent years):– 1st: Family Gathering concept, ingredients, cut, photography– 2nd: Holiday roast promotion possibilities, in-store execution ideas– 3rd: First quarter 2012 elements