Meat + Poultry - September 2004 - 10

Heat-and-serve products are altering the meat case
A national meat case audit indicates a growing transformation of the
retail case since 2002, leading to a shift in the allocation of space
for store-wrap and case-ready meat. The National Meat Case Study
2004 findings suggest retail penetration of heat-and-serve and value-added products has
continued to grow.
The study was conducted to provide packers and retailers with
further insight into retail
meat marketing trends
on a national basis. Information from this study not only provide
a current look at America's meat case, but it can also help create
new meat merchandising applications to further drive incremental
category growth.
The study consisted of 104 audits in 29 states and 43 key metropolitan markets. Auditors, including Texas Tech Univ., Lubbock, Cryovac Food Packaging Division of Sealed Air Corp., Duncan, S.C., and
the National Pork Board, Des Moines, visited major chain supermarkets nationwide collecting information on more than 117,000 packages, including more than 11,000 sausage packages. Information collected included, for example, use of cooking information, number of
S.K.U.s, packages per S.K.U., pounds per S.K.U., use of case ready
technology and linear space by species.
According to the study's findings, allocation of meat case space
is shifting, with fresh meat and poultry's share of linear feet decreasing by 6 percent since 2002. The big gainers from this shift
include processed meats and heat-and-serve products - both up

2 percent with ready-to-cook, value-added products and self-serve
seafood up 1 percent.
"The face of the meat case is changing and being led by an increase
in processed, heat-and-serve and value-added meat," says Randy Irion, director of retail marketing services for the National
Cattlemen's Beef Association, Denver. "As this shift
continues to develop, it's imperative we provide our industry partners with insight
into these emerging trends to help adapt to these changes."
The penetration of case-ready product continues to grow. Since
2002, case-ready penetration has increased across all major species. Specifically, whole muscle beef cuts experienced an eight percent increase in case-ready packages in the retail meat case, ground
beef increased by 10 percent, while pork experienced the greatest
gains with a 13 percent increase.
Also noted in the findings were the popularity of point-of-purchase
materials. Case "danglers" and price fins, were used by more than 90
percent of supermarkets surveyed. While P.O.P. materials delivered
nutritional information, the most frequently observed P.O.P. materials dealt with price.
"Consumer demand is driving the evolution of the meat case,"
says Karen Boillot, director of retail marketing at N.P.B. "Through better understanding of what consumers need we can work collectively
with the industry to meet those needs and ultimately help increase
meat case sales."

Hormel and Excel develop new
packaging technology

Cagle's rebounds in first quarter

Hormel Foods Corp., Austin, Minn., and Excel Corp., Wichita, Kan.,
have developed a new fresh meat packaging format that increases
supply chain flexibility and provides consumers with information on
product freshness. Patents are pending on several aspects of the
packaging format and it will incorporate a "use by" date that will help
ensure maximum product quality for consumers.
The technology has been reviewed by the U.S. Food and Drug Administration and officials issued a letter of no objection to the technology. The petition to F.D.A. was filed by Precept Foods L.L.C., which
is a joint venture formed by Hormel Foods and Excel to market nationally branded fresh case-ready beef and pork under the existing
Hormel Always Tender brand name to retailers. In addition to using
the new format in the Precept joint venture, each company can independently offer the format to existing fresh meat programs, such
as Hormel Foods further-processed meat products and Excel's case
ready meat programs.
With the government review in hand, Precept Foods, Hormel
Foods and Excel will begin working with customers on adopting
the new technology. The companies said they have not determined
whether they will license the technology to other meat processors.

MEAT&POULTRY

Cagle's, Inc., Atlanta, reports first quarter fiscal year 2005 net sales
of $61 million compared to $41 million for the same period this past
year. Operating income was $9.2 million compared to a loss of $4.2
million the previous year.
"We are happy to report excellent results for the company's first
quarter of fiscal year 2005 which reflects positive industry conditions,
supported by our aggressive marketing of value-added products, and
efficiencies brought about from the restructuring following the Perry
divestiture," says J. Douglas Cagle, chairman and C.E.O. "The company's existing operations generated a remarkable 13.7 percent or
$9.176 million operating profit compared to last years operating profit
of $498 thousand (as adjusted for the Perry Complex divestiture)."

Sun Valley acquires Caravelle
Sun Valley Foods, London, Ontario, and a division of Cargill Ltd.,
is acquiring Caravelle Foods, Brampton, Ontario, a partnership between Sterling Packers Ltd. and Town Packers Ltd. The terms of the
transaction were not disclosed.
Caravelle Foods produces frozen meat patties for the Canadian fastfood industry. The business has two locations, one at Spruce Grove, Alberta, and the other at Brampton, and employs about 120 people.

www.MEATPOULTRY.com

SEPTEMBER 2004

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Meat + Poultry - September 2004

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