Progressive Grocer - May 2010 - (Page 76)
rown-bagging has grown in popularity during these tough economic times, focusing attention on packaged lunchmeat. However, lunchmeat sales volumes haven’t soared quite as high as expected, due to higher retail prices brought on by increased grain and fuel costs. Consumer demand for premium cold cuts, with a greater focus on health or deli-style product, has also added to product price. While higher prices have sliced back lunchmeat sales growth, demand remains steady, with 73 percent of U.S. households purchasing packaged lunchmeat.
Dollar sales of sliced lunchmeat increased 9 percent from 2004 to 2009, while pound volume sales declined over this period by 9.6 percent, according to a report by Mintel, a Chicago-based research ﬁrm. The result: the average retail price for refrigerated sliced lunchmeat in FDMx increased from $3.68 per pound to $4.32 per pound, or 17 percent, from 2005 to 2009, according to Mintel’s “Lunchmeat, U.S. December 2009.” Supermarkets remain the No. 1 choice when buying lunchmeat, with almost six in 10 respondents to the researcher’s consumer survey saying they buy most of their lunchmeat at conventional supermarkets. “The refrigerated lunchmeat category has beneﬁted from the economic downturn, as more consumers are brown-bagging it,” says Alan Hartline, EVP, merchandising and marketing for Grand Rapids, Mich.-based Spartan Stores. “We are seeing refrigerated lunchmeat category growth outpacing total store ACV. Private brands have experienced the most growth, in particular, our tub lunchmeat offer.”
• Progressive Grocer • May 2010
By D. Gail Fleenor
The recession brings focus to packaged lunchmeat, demand for which remains steady in 73 percent of U.S. households.
packages in the past year. An additional 37 percent of consumers indicate they’re interested in purchasing this type of packaging. Almost one-quarter of respondents, however, aren’t happy with packaging, saying, “Lunchmeat packaging does not seal effectively.” Resealable packaging has evolved from “press-to-close” packs to zippered packages to plastic tubs with closable lids. Such packaging not only serves to maintain freshness, but also adds to the deli-style perception customers crave. Pat Dodson, meat department manager for Seamart Quality Foods in Sitka, Alaska, says the new plastic tub containers have increased his company’s refrigerated lunchmeat sales.
Slicing it Up
Households with children are one of the strongest indicators of lunchmeat consumption, Mintel says. While 92 percent of households with kids purchase lunchmeat, only 87 percent of households without children do so. Households with children are also more likely to use packaged lunchmeat, most likely for convenience. Lunchmeat translates to quicker, protein-packed meals, either at-home or brown-bagged.
The Case for Innovation
Consumers believe product packaging is almost as important as the product itself in the lunchmeat category, so recent packaging advances have been welcome. Freshness is a key driver to sales, so resealable packaging designed to keep meat at its freshest is crucial. In Mintel’s consumer survey, 47 percent of respondents say they’ve purchased lunchmeat in resealable
A H E A D O F W H AT ’ S N E X T
Kraft Foods, the market leader in the refrigerated sliced lunchmeat category with its Oscar Mayer brand, has sales of more than $1.5 billion and a 21.2 percent market share (FDMx from Information Resources, Inc., for Mintel). Strong branded sliced lunchmeat performance, in the Oscar Mayer Deli Fresh line in particular, helped sales grow 3.1 percent. Oscar Mayer recently introduced two new items, based on consumer research, in its Deli Fresh
Table of Contents for the Digital Edition of Progressive Grocer - May 2010
Progressive Grocer - May 2010
Nielsen’s Shelf Stoppers/ Spotlight: Candy/Non-ChocolateCandy
Super 50: Steadfast Leaders
The Lempert Report: ConAgra, Celebs Battle Child Hunger
Best Practices: Starting at the Top
Wake-up Call: Coupons Make a Comeback
Store of the Month: Roots and Wings
Harold Lloyd on … Making a Difference: Why Work as a Clerk?
Experience at Large: Put Your Best Customers to Work
Confection: Sweetening the Pot
Tea: Brewing up Sales
Non-alcoholic Beverages: Summer Quenchers
Summer Grilling Special: What a Gas!
Produce: Local and Lovin’ it
IDDBA Show Preview: Recipe for Success
Trends: The Summertime Freeze
Meats & Cheeses: Brown-bagging Sales
Food Industry Insights: Leadership for the Future
Tech Toolbox: A Look at the Latest Solutions
Out of the Box: The Latest Tools of the Trade
Roundtable: The Executioners
Foodservice: Green Machines
What’s Next: Editors’ Picks for Innovative Products
Progressive Grocer - May 2010