Consumer Research Highlights

Consumer Research Highlights

Retail Advisory CommitteeApril 27, 2011

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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

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The goal: Utilizing available resources and data, provide “best practices” for key facets of pricing and promotion to optimize fresh meat performance

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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

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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

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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

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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

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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


% C

hang

e vs

. Bas

elin

e


% 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



% C

hang

e vs

. Bas

elin

e


% C

hang

e vs

. Bas

elin

e


% C

hang

e vs

. Bas

elin

e

And within pork category

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% 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



% C

hang

e vs

. Bas

elin

e


% C

hang

e vs

. Bas

elin

e


% C

hang

e vs

. Bas

elin

e

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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

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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

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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

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We will review this dataset in depth and identify other key findings to share with retailers

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How America Shops for Meat and Meals

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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

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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

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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

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<$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 College

College Degree



Some College

College Degree


48%

45%

40%

66%

65%

56%

Heavy Planners had Higher Household Income and Education Levels

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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

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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

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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

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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


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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%


Sources For New Meal Ideas% Very/Somewhat Important

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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

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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

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NPB’s Consumer Segmentation Research – Identifying Our Target

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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

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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

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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

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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

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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

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Next Steps: Reaching the Pork Champion

Pork Champion Consumer Survey

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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

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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

Consumer Research Highlights

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