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National Pork Producers Council 2/1/2010 1
NPPC On-Pack Label Initiative:
Selling at the Moment of Truth
National Pork Producers Council 2/1/2010 2
Today’s Meeting
The Consumer Decision Process
On-Pack Marketing
Label Impact Study
Action Plan
National Pork Producers Council 2/1/2010 3
Source: NPD
The Dinner Dilemma
It’s 4:30 PM. And 60% of Americans have no
idea what to serve for dinner
National Pork Producers Council 2/1/2010 4
The Dinner Dilemma
The customer is starting to think about
center of the plate options
National Pork Producers Council 2/1/2010 5
Consumers Take the Time to Browse
A majority of shoppers take the time to browse
down most aisles.
Source: POPAI Consumer Buying Habits Study, 1995
How Shoppers Go Through The Store
Only Visit
Aisles/Sections
Where
Planned to Buy
42%
Visit Each
Aisle/Section
21%
Visit Most
Aisles/Sections
37%
National Pork Producers Council 2/1/2010 6
Fresh Meat Is a Key Supermarket Category
Fresh meat is the third most likely item found in the
supermarket shopping basket
Source: : POPAI Consumer Buying Habits Study, 1995
% of Shoppers Purchasing
90%
60%
30%Produce Packaged
Breads
Fresh Meat/
Seafood
Milk Soft
Drinks
83%
54% 52%49%
42%
National Pork Producers Council 2/1/2010 7
Importance of the Meatcase
Well over half of
all consumer
purchases are
spent on
perishables
Meat & Seafood
department
represents over
31% of perishable
sales and nearly
16% of total store
sales
Source: Progressive Grocer Annual Report, 1998
Produce
21.1%
Meat & Seafood
31.3%
Bakery Foods,
Packaged 5.9%
Dairy
Products
17.9%
Deli 6.4%
Frozen Foods
10.6%
Ice Cream 3.2%
In-Store
Bakery
3.9%
Percentage of $ Sales
National Pork Producers Council 2/1/2010 8
Source: POPAI Consumer Buying Habits Study, 1995
Meat Is a Key In-store Decision Category
Nearly half of all
in-store meat
purchase
decisions are
made on
impulse
20
30
40
50
Meat/Seafood Produce
In-Store Decision Rates
%
47%
33%
National Pork Producers Council 2/1/2010 9
On-Pack Marketing Impacts Sales
Well-designed packages can act as “five-second commercials” for a product
Only on-pack marketing can serve as the “last three feet” of a marketing effort
Where the product, the consumer and the dollars come together
National Pork Producers Council 2/1/2010 10
On-Pack Marketing Communications
On-pack marketing communications are
those packaging components which can
influence purchase behavior including:
- recipes
- preparation tips
- coupons (on-packs, in-packs, IRCs)
- tie-in promotions
- bonus packs
National Pork Producers Council 2/1/2010 11
Effectiveness of On-Pack Marketing
Nearly three-quarters of consumers bought an
item because of on-pack marketing
Source: The In-Store Experience, Seiden Group, 1994
% Consumers Ever Bought After Seeing
80
%
60
40
20On-Pack Displays Samples Checkout
Coupons
Shelf
Coupons
Frequent
Shopper
Program
72%
65%62%
55%
35%31%
National Pork Producers Council 2/1/2010 12
Source: NFO Kitchen Report, 1998
How Often Households Use Recipes
Often 33%
Always 5%
Never 5%
Sometimes 57%
Recipes Are Very Important
95% of households use recipes
National Pork Producers Council 2/1/2010 13
Source: NFO Kitchen Report, 1998
Packages are an Important Recipe Source
Most consumers use food package recipes
Cookbooks
0
Magazines/
Newspapers
Friends/
Family
Food
Packages
TV Internet Restaurants
30
60
90
%Household Recipe Sources
87%
71% 70%
51%
14%8% 7%
National Pork Producers Council 2/1/2010 14
On-Pack Recipes Are Important Packaging Components
National Pork Producers Council 2/1/2010 15
And Preparation Tips Are Essential
National Pork Producers Council 2/1/2010 16
0 20 40 60
Cost
Time available
Who will be eating
Food quality
Availability of Ingredients
Nutrition
Prep Time
Weekdays
Source: The 1996 Gallup Study of Dinner Eating Habits
Preparation Time Is Key to Communicate
Prep time is tied with nutrition as most important in
deciding what’s for dinner
% Respondents Ranking First or Second Most Important
53%
53%
49%
49%
44%
34%
32%
National Pork Producers Council 2/1/2010 17
Consumers Need Preparation Tips
Roughly 50 million people (30% U.S. adults) are
not confident or satisfied with their ability to fix a
meal
Consumers are less comfortable preparing pork
than other species
47% of consumers overcook meat or poultry due
to concerns about food safety
However, advertising has significantly improved
the comfort level of preparing pork
Sources: www.foodchannel.com; MARC, 1998; Better Homes & Gardens Consumer Panel, 1997-98
National Pork Producers Council 2/1/2010 18
Label Impact Study
National Pork Producers Council 2/1/2010 19
Label Impact Study: Overview
The pork industry has long recognized that
on-package recipes appeal to consumers
and in-turn increase sales, yet had little or
no data to support such a case
As a result, NPPC recently conducted a
comprehensive research study to quantify
the actual impact on retail sales by adding
recipe labels
National Pork Producers Council 2/1/2010 20
Label Impact Study: Overview (cont’d)
A two-phased research approach:
- Qualitative: Focus groups to determine
consumer attitudes and needs
- Quantitative: Control store test to
determine impact on
sales
National Pork Producers Council 2/1/2010 21
Label Impact Study: Qualitative Results
Consumers would enthusiastically welcome
recipe labels on fresh pork packages
Recipe labels would encourage additional
purchases of pork
Prefer these label elements:
- color versus black and white
- quick, easy-to-prepare recipes
- clear, concise copy
National Pork Producers Council 2/1/2010 22
Label Impact Study: Qualitative Results
When exposed to a “Pork. The Other White
Meat.®
” on-pack label, consumers were
reminded of:
- the “well-recognized” advertising campaign
- the message that pork is an alternative to
chicken and or healthier than they thought
National Pork Producers Council 2/1/2010 23
Label Impact Study: Qualitative Results
As a result of the focus group findings, the
NPPC developed three sets of recipe labels
to explore through quantitative research their
incremental volume potential
National Pork Producers Council 2/1/2010 24
Label Impact Study: Tested Label Types
Test cell 1: peel-off label Test cell 2: multi-recipe/
Test cell 3: single recipe w/photo(2 labels: chops/roasts)
National Pork Producers Council 2/1/2010 25
Label Impact Study : Quantitative Approach
A controlled store test was conducted
among two key geographically-dispersed
retail chains
This approach is a widely used in-store
technique that here identifies incremental
sales from on-pack recipe labels
- separates the sales impact of recipes from
other marketing events, such as features,
displays and pricing
National Pork Producers Council 2/1/2010 26
Label Impact Study : Quantitative Approach
The test was conducted October/
November 1998
Three test cells were compared to a control
cell, with a total of 32 matched stores
Compliance was monitored through audits
by an independent agency
Meat department managers were also
given the opportunity to provide feedback
on the program
National Pork Producers Council 2/1/2010 27
Label Impact Study: Quantitative Results
Overall, recipe labels
had a significant,
positive impact on
fresh pork sales
0
2
4
6
8
Average Gain
%
6%
Source: Label Impact Study, NPPC 1998
National Pork Producers Council 2/1/2010 28
0
5
10
Label Impact Study: Quantitative Results
7% 7%
5%
Peel-Off
RecipeMulti-Recipe Single Recipe:
Chops/Roasts
There was not a
significant
difference in
results between
the different types
of labels
National Pork Producers Council 2/1/2010 29
Label Impact Study: Quantitative Results
Not surprisingly, results are stronger for
roasts and tenderloins
Impact on Sales, by Cut Type
Chops
Roasts
Tenderloins
+ 5%
+ 7%
+ 13%
Test
Advantage*
* composite results
National Pork Producers Council 2/1/2010 30
Label Impact Study: Quantitative Results
Projecting Incremental Sales and Profit*
Incremental Sales*
Incremental Profits*
$ 354
$ 120
$17,940
$ 6,240
$1,794,000
$ 624,000
Weekly,
Per Store*Annualized,
Per Store*
Annualized,
for 100
Unit Chain*
* based on industry composite, rounded, (weekly pork sales of $5,900 per store; 34% gross margin)
Projecting long-term results demonstrates
significant sales and profit improvement
National Pork Producers Council 2/1/2010 31
Label Impact Study: Forecast
Projecting Incremental Sales and Profit*
Enter the chain/account information
Enter Average Weekly Dollar Pork Sales $5,000
Enter Number of Stores In Your Chain 300
Enter Number of Annual Program Weeks 52
Enter Gross Margin (I.e. .34 for 34%) 34%
Incremental Sales Per Store/Week $300
Incremental Profits Per Store/Week $102
Incremental Annualized Sales Per Store/Week $15,600
Incremental Annualized Profits Per Store/Week $5,304
Incremental Annualized Chain Sales $4,680,000
Incremental Annualized Chain Profits $1,591,200
Enter
Chain
Info
National Pork Producers Council 2/1/2010 32
Label Impact Study: Meat Manager Feedback
Many managers expressed warm reception to
the NPPC recipe label program:
- “Labels give the customer recipe and cooking
ideas, which will only increase sales of our pork
displays.”
- “The program is good for my department, adding
a touch of „class‟ to each pork loin package…
applying recipes tells Mrs. Consumer that we
appreciate her shopping with us.”
- “[The label program] is helping to sell more pork.”
National Pork Producers Council 2/1/2010 33
Label Impact Study: Conclusions
Recipe labels have a positive and
significant impact fresh pork sales
- influence in-store decision
Consumer needs are addressed
- how to use
- variety
The potential to increase store traffic and
cross promote
National Pork Producers Council 2/1/2010 34
Why Retailers Should Invest in On-Pack Recipes?
Satisfies consumer need to determine what to prepare for dinner
Educate consumers on how to prepare pork
Customer retention and loyalty
An opportunity to further brand the meatcase
Increase center-store traffic via cross-merchandising with ingredients
Increases sales & profits of the most profitable segment of the meat department
National Pork Producers Council 2/1/2010 35
Use on-pack recipe labels as an integral part
of a pork merchandising plan
Educate staff on the benefits of recipe labels
Periodically monitor in-store performance
Act now…before your competition!
Retailer Next Steps
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