Beef. It’s What’s For Dinner

What brings in more dollars than any other item in the grocery store?* Beef. It’s What’s For Dinner. In this edition of Lost in the Supermarket, Phil Lempert speaks with Bridget Wasser, Executive Director, Meat Science & Supply Chain Outreach at the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff. Bridget talks about today’s beef demand, why grocers feature beef in circulars and apps (hint: it drives total store sales) and the hot topic of plant-based meat substitutes.

*IRI Panel Data, All Outlets, 52 weeks ending 1/6/19, Market Basket Study, February 2019.

Transcript

Phil Lempert: 0:00

Welcome to Lost In The Supermarket, the podcast that goes behind the shelves with look at the latest grocery trends, the latest health information, and how shoppers can get the best deal for every dollar and make every shopping trip the best they can. I'm Phil Lempert and on today's podcast, it's all about beef. In fact, the title of today's podcast is Beef. It's what's for dinner. This episode is sponsored The Beef Checkoff. Our guest today is B ridget Wasser, the Executive Director of Meat Science and supply chain outreach at the National Cattleman's Beef Association, a contractor to the Beef Checkoff. She's responsible for the strategic direction, planning, development, and implementation of the beef quality research program and technical meat science. She leads strategic direction and implementation of the Beef. It's What's For Dinner brand across the beef supply chain from rancher to processor, manufacturer, distributor, retailer, and food service. She's also the smartest person I know about beef. Let's get started. B ridget, welcome to Lost In The Supermarket.

Bridget Wasser: 1:07

Thanks so much. I'm happy to be here.

Phil Lempert: 1:09

So B ridget, I've got to start with the economy and there's a lot of ups and downs these days. And how has the economy affected the demand for beef?

Bridget Wasser: 1:18

Well, there's good news there cause beef demand is very strong right now. Despite other lower priced proteins that are available in the marketplace, consumers have remained willing to pay strong retail prices for the increasing supplies of high quality beef that are available for retailers to purchase. Just one example of that. In 2018 we know that beef retail beef demand was 15% higher than in 2012 so we're seeing really good demand for beef.

Phil Lempert: 1:47

So let's stick with retailers for a second. A supermarket. When I look at a supermarket flyer, the first page of the circular always has meat or poultry. Why is it that the retailers use this as a way to lure customers into their stores?

Bridget Wasser: 2:05

Well, beef pairs really well in terms of featuring it. It is something that any shoppers and those that are reading circulars are paying attention to. It could actually be what determines what store they go into. And so we've seen beef ads and be featuring, really continue to remain very high over the past several years since 2012 that same time period I just referenced, beef heads have accounted for almost 40% of meat and poultry features in retail. And so just to put that in perspective, over that same time period, so 2012 to 2018 chicken, chicken, pork and Turkey would account for 27, 23 and 8% of as respectively. So beef is, is really prominent featuring and embrace people in stores.

Phil Lempert: 2:50

So, you know, you mentioned those percentages of what, what different protein the retailers are doing. Does that align with consumption? You know, the retailer looks at that and says, okay, 40% of my sales are with beef, so I'm going to, you know, promote it 40% of the time versus chicken. That might be a lot less.

Bridget Wasser: 3:13

It aligns fairly well. Beef and poultry consumption are, are pretty consistent and the highest of the proteins and then you see a drop off with the other proteins. But you know, I think, you know you have to take price into account as well when it comes to featuring and price differences between beef and chicken. Well a lot of times drive that higher featuring rate for beef versus poultry or other proteins also. So that's, that's part of the equation as well.

Phil Lempert: 3:40

So when I look at the circulars, uh, sometimes I see ground beef, sometimes I see a fillet porterhouse steak and so on. How does the retailer actually determine which cut of beef to be featuring?

Bridget Wasser: 3:52

Well, I mean, I, I think it kind of depends on several things. One is what's selling in their market, what season we're in. Um, some of the most featured beef cuts the last year where the Chuck Center Roast t-boned steak and shrimp steak. So those are all meat case mainstays. You know, something that has really been in the retail meat case for a long time and brings people in the stores. Uh, but you know, there are factors to consider including where we are, where the retailer is in the country, what their consumers or their shoppers are, are favorable to. And also what season we're in. For example, are we in roasting season where that Chuck's in or rose might be front and center or are we in the middle of grilling season? Like we, we have been this summer where strip steak makes more sense.

Phil Lempert: 4:33

So we're talking about features. When we're talking about features we're talking about money can, can you give me an average discount that a consumer saves? Um, when that meat cut is on the first page of the circular?

Bridget Wasser: 4:48

Yeah. The average discount across the top 15 beef cuts featured last year was 13.3%. Wow. So it's quite, it's quite the discount. And again, I think that does help bring shoppers into this.

Phil Lempert: 5:02

Okay. Let's, let's switch gears now to the industry. Um, you have a market basket study. What did you find out in, in the last one that just came out?

Bridget Wasser: 5:12

Well, we found out some really good news for beef in retail. So the beef checkoff and a beef, it's what's for dinner brand. Worked with IRI to analyze IRI panel data that captures trip by trip purchases for a representative sample about a of about a hundred thousand us households. So it really allows us to better understand who's purchasing beef, what are their buying habits, and then how beef in their basket contributes to total store sales. And we've learned through that study that beef brings in more dollars than any other item at retail, just over 2% of total. So about 6.3% of all retail baskets include beef. And we learned that the average basket would beef is more than twice that of the reading. So that's$85 and 70 cents versus$41 and 33 cents respectively, a basket with versus without beef. And then that that number is even greater when we're talking about steak. So basket two would include a beef steak top out at nearly$92 while baskets, it would have ground beef would average about$89. And so again, that that beef item in the retail case really is the most valuable player across the store.

Phil Lempert: 6:25

So what's interesting to me is first of all, that 2% number that you started with, um, while that might not sound like a lot to someone who's listening to loss in the supermarket, keep in mind that there's about 40,000 products in a supermarket. So you divide 40,000, 40,000 or 40,000 to a hundred and it's a fraction, you know, it's a tiny, tiny fraction for every category. So for beef to be 2%, that's significant. Um, now I'm going to ask a question that puts you on the spot a little bit. Um, you talk about the basket size. How does it compare with baskets that have chicken for example, or plant based alternatives and you know, um, let's put it in the right perspective here.

Bridget Wasser: 7:16

Yeah, that's something that we also looked in that at, at that same market basket study. And what we found is it baskets with beef drive 44% more total store sales than baskets with chicken. And then 21 times the total store sales is baskets, would be substitutes, which are the newer kind of products that are being used, available, made available at retail. I'm a basket with chicken, comes in just shy of$85 which is lower than a basket would be. And then a basket containing beef substitutes like a plant based Burger or a veggie crumble or the smallest of those we measured in that market basket study and those came in at just under$82. So that basket with beef is driving more stale sales and a higher ring as well.

Phil Lempert: 8:00

Sure. And you know what's, what's interesting to me is you know, you, you've just set out why beef is so important to, to that retailer and why that retailer is promoting it on the front of the page. Cause it's not just about selling beef, it's about upselling for lack of a better word to that shopper. Everything else that's in the cart because of beef is there.

Bridget Wasser: 8:24

No, absolutely. That's a really good point. Yeah. Featuring plays a role, I think in those numbers that I just reviewed and that, and that's why as you said, featuring it beef at retail is still so important and retailer wants to attract a beef shopper, especially those, it would be doing their stock up runs because if you win the beef shopper, you win their big weekly trip, you win their basket. And one of the things that we also know is that when shoppers buy be for, particularly when they're buying a steak for example, they, they buy other higher ring items across the store as well. So they might buy meat related sauces or higher end cheeses or fresh produce certainly,

Phil Lempert: 9:01

Or a great bottle of red wine.

Bridget Wasser: 9:03

Absolutely a bottle of wine to go in that basket as well, particularly if we're talking about steak, right. But steak enthusiasts, they also purchase the widest variety of animal protein. So they, they purchase fish, they purchase seafood. So again, there are, they're adding other valuable items for their card as well. And then for the ground beef purchaser, we see them typically purchase a variety of spices or mixes or sauces or again, cheeses and pastas to kind of use that ground beef in when as they are considering it an ingredient in different types of meals and dishes. They might,

Phil Lempert: 9:36

So I want to stick with retail but move to a different part of retail. Online shopping. What's going on with beef, with online shopping because a lot of the surveys that I've seen say that, you know, consumers are reluctant to buy fresh product, whether it's produce, whether it's beef through an online, you know, portal. Is that something that, that you're seeing number one and number two, what are you doing to reinforce whether to be the retailer or the consumer that buying beef online is an easy thing?

Bridget Wasser: 10:11

Yeah, I mean I think you're absolutely right. I think there's a higher barrier of entry in e-commerce to fresh products, beef produce and others than there are for kind of staple products, the store products. And you know, to be fair that the center of the store, you know, some household staples, paper towels if you will,

Phil Lempert: 10:29

Macaroni and cheese.

Bridget Wasser: 10:30

Yeah, yeah, yeah. The, that's kind of how the shopper was introduced to online shopping. Right. And so the idea of purchasing fresh is a little bit newer and there is a definitely a higher barrier of entry. And so one of the things that Beef, What's for Dinner and the Checkoff had been doing is watching the growth of online grocery shopping is projected to grow, certainly moving forward just because of the sheer convenience factor of it. And so we've been working to, execute tests and online grocery to help retailers learn the most effective ways to promote beef through digital channels and e-commerce. And the goal there would be to make sure that that beef doesn't get left behind and online ordering just because of those numbers that we just went through in terms of how beef drives retail sales. So for example, beef, it's West for dinner recently executed two different campaigns with instacart and instacart, certainly one of the most prominent and widely most widely available third party online grocery platforms. And so we did at one digital ad campaign on the instacart marketplace as well as one physical insert into grocery shopping bags with instacart shoppers. And then we were able to measure the effectiveness of different marketing messages and strategies within the instacart platform for beef. Just a little bit about the results of that study. Yeah, so digital ad campaign on the instacart marketplace, that's basically replacing a beef ads inspire purchase at the point of purchase was extremely effective. We tested both taste and nutrition focused ad messaging right at point of sale and through that activation achieved a sales lift of more than 25%.

Phil Lempert: 12:14

Wow.

Bridget Wasser: 12:15

So that was a great finding for sure. And one of the bonuses of that is we determined that through that 30% of those purchases during that test period were made by customers to instacart who had not purchased beef within their platform in the past past year. So maybe someone who did have that barrier to entry or barrier to buying beef or other fresh products online. So they add the ads we placed related to beef in this ecommerce platform, drove newbie sales and that was very encouraging. And then we tested the physical inserts, printed inserts, place in the shopping bags, you know, kind of more of an old school marketing tactic, but you've got that captive audience by those that have purchased through the instacart platform. We executed recipe cards and found that those are also effective in driving digital shoppers to purchase beef online. So over 35% of the customers who received an insert in their shopping bag then subsequently purchased beef on instacart. And again of those that purchase, more than 50% of those had not purchased beef through instacart and in the past year. So again, it drove new sales in the platform. And I think one easy takeaway is, is to remain top of mind to that shopper in that online ecommerce grocery platform. Just remain top of mind, don't, you know, remind them and inspire them with, with beef in the moment of purchase. So they remember that that's available for them to order through that online platform.

Phil Lempert: 13:44

You're not going to like my next question. Let me start off there. There's these days, you know, you pick up any newspaper, you know, any TV go into any store and there's a lot to talk about plant based diets. There's a lot of talk about plant-based burgers if you would. Burger might be the wrong word to use. Um, give me, give me the one oh one. What's, what's realistic, um, about plant based diets. Um, what's going on because clearly the past few years we've seen a move towards protein, protein, protein. Um, and while some of these plant-based uh, replacements of for animal protein does have protein, is it the same kind of protein? Is it, um, as good, give me the one oh one and tell me the truth and I know you will. I know you will. You're a scientist.

Bridget Wasser: 14:45

Yeah, no, it's a, it's a very valid question. There's certainly a lot of buzz about these new products, um, plant-based die as plant based products that are available and now reaching retail, you can hardly miss a story on it every day. So it's certainly something that, um, you know, we're aware of, very aware of as a beef industry and it's a competitive protein marketplace and that's kind of the reality of, of the market that we're in. Protein to your point, has a lot of, a lot of marketability and a lot of value. But you know, we believe that beef offers a great protein story as well. So when we really look at the numbers, so he might wonder how many consumers are intentionally eating less meat, you know, or, or diet patterns changing across the u s consumer. And a recent study that the checkoff beef checkoff funded, we found that, you know, 34% of consumers stated that they do sometimes intentionally avoid eating meat. But I think it's important to note that includes people who are choosing to eat less meat, not just vegetarians and vegans. So we do and have tracked the number of Vegetarians and Vegans, you know, across the country for the past several years and it's really has remained relatively stable over the past decade. About 4% of people identify as vegetarians in the U S and about 3% is Vegan. So 93% of consumers still eat meat. And you know, that's good news. That's a lot of people that we can market beef to through the retail channel.

Phil Lempert: 16:14

I was going to say to your earlier point, um, the, the idea is that people are looking to increase more vegetables into their diet because of a lot of information that's come out. But that doesn't mean necessarily decreasing the amount of beef, it's just adding more vegetables to it and, and I guess the term being bantered around now is flexitarian.

Bridget Wasser: 16:37

Yeah, absolutely. Yeah, I mean and, and we think that obviously that vegetable vegetables pair really well with beef love the idea of pairing meat and vegetables and eating a healthy balanced diet. And that's what it's about, right? It's about balance. And again, the overwhelming number of US consumers still eat meat. And of those 34% I mentioned earlier, consumers who are maybe cutting back or overweighting a meat, in some cases only 27% of those who are replacing meat with a plant based protein like a patty or crumble like a new product that's on the market. So a lot of those folks who are replacing meat with a salad that doesn't include meat or maybe pizza that doesn't include meat, you know, a cheese pizza or lentil grain based dishes. So it's not that with new products on the market. I mean there certainly is a lot of interest and a lot of novelty and trying those. But you know, there are still relatively new and still a relatively small percentage of the market share. And so it's not an automatic assumption that those folks who would be replacing their meat with a plant based meat alternative as you mentioned, maybe just more vegetables or more plant forward.

Phil Lempert: 17:48

So Bridget, lots, lots and lots of great information. I mean we could talk for hours about this. Um, from, from a retailer standpoint, how can retailers, um, work with the beef checkoff to market beef? And how can they get the latest updates on everything that you're telling me about?

Bridget Wasser: 18:06

Yeah, we've got a lot of great tools that are available to retailers. Everything that the beef checkoff and beef, it's what's for dinner offers is complimentary. So I think that's the first point. Um, you know, it's the industry is providing these resources with the idea of helping retailers sell more beef and remove any barriers they may have to selling that product to the consumer. So several things that they can link into. We've got beef, it's what's for dinner.com, which is our, um, beef industry website that's got just a wealth of recipes, photos, um, cooking tips, semi just cooking videos, production videos, anything you can think of. Does it kind of tell that beef story is there on beef? It's what's for dinner.com. So that's available to any retailer. Um, we've got chuck knows beef, which is an artificial intelligence tool that's available on any mobile device or smart speaker.

Phil Lempert: 18:57

I remember I did it. I actually did a report on, on chuck when you, when you first launched it. Yeah. It's so cool. I love it.

Bridget Wasser: 19:04

It's so cool. Yeah, we're really excited about it. And the idea is to help shoppers successfully select and beef in the meat case and then prepare that beef when they get home. We know that it's typically the top questions that would be asked within the Meat Department of a store is, you know, what do I do with this cut? What can I make with it? How do I prepare it and successful experience is going to bring them back to your store to buy that product again. So Chuck knows beef.com is a way to find out more about shock and how we can help your shoppers as a retailer. And then we've also got training, we've got Beef University that retail store staff can take part in to help them more confidently answer questions about the beef that they carry in store. And then also your listeners could subscribe to Beef News Now, which is a email newsletter, that that comes regularly into their inbox with our latest research insights and trends from the beef industry. And you can sign up for that on the bottom of the page at beef. It's what's for dinner.com

Phil Lempert: 20:03

So are you gonna let me go to Beef University?

Bridget Wasser: 20:05

Anytime. Sure. Okay.

Phil Lempert: 20:07

I'm going to take you up on that.

Bridget Wasser: 20:08

You should, I think you should definitely go.

Phil Lempert: 20:12

Bridget as always, a wealth of knowledge, and thank you so much for joining us today on Lost In The Supermarket.

Bridget Wasser: 20:19

Thank you. My pleasure.