SUPERMARKET giant Woolworths is buckling in for a world where high livestock prices are the new normal by modernising its protein offering in line with emerging consumer trends.
The flexitarian, the weekend carnivore and the masterchef are all very well known to Woolies meat business bosses and the new-look red offerings in the fresh meat section are as strategic as it comes.
Meat manager Pat McEntee is clear on just how important protein is to his company.
Speaking at this year’s ABARES Outlook conference in Canberra, he said close to 50 per cent of the cost of a customer’s basket lays in meat and often the choice on where to shop is determined by what’s happening in store with regards to protein quality and cost.
At the same time, Woolworths is under no illusion that what it will pay to secure good quality supply will remain high as Australia continues to provide more protein to the rest of the world.
“We’re learning quickly we are a retailer in a large global meat market,” he said.
Australian beef and lamb exports had increased by around $4 billion in the past five years, significantly impacting domestic livestock prices and availability, he said.
Beef now sits at nearly four times the price of chicken at a retail level domestically.
That leads straight to what is happening from a consumption perspective - it’s down annually by 2 kilograms per person since 2012.
“If Woolies had’ve passed on all the costs we’ve incurred (from the record cattle market) we’d see the retail sell price much higher,” Mr McEntee said.
The plan was to continue to absorb cost increases and in turn look to the changing ways people are consuming protein to forge out new opportunity.
“The customer is changing rapidly, so we are finding different ways to retail red meat,” Mr McEntee said.
Key callouts on Woolie’s comprehensive consumer insights database are customers wanting personalised interactions, more cuts of meat, convenience, portion sizes that go hand-in-glove with recipes, offerings that meet demands around ‘good for me, good for the environment’ and options for cooking like a chef at home.
“Linking into the aspiration with wanting to be the master chef, the foodie, is driving change in how we sell beef,” Mr McEntee said.
It has created big opportunity for what was once considered secondary cuts.
Flat iron steak, once called oyster blade, is on trend.
Chopped marrow is in demand and even the humble burger, once just a pattie, has created a valuable home for beef brisket.
Pre-cooked, ready-to-heat meals, meanwhile, is the fastest growing category in Woolies’ meat business, currently travelling at 25pc growth on last year.
“We’ve now also introduced labelling saying our lean mince is 90pc meat, 10pc fat as a direct reaction to what consumer research was telling us people wanted,” Mr McEntee said.
And mince is now in precise 500 gram portions, not slightly over, which fits in better with recipes.
The result - an immediate spike, record volumes sold over the past couple of months.
Meanwhile, Woolies is leading the way on packaging innovation, via its “sealed fresh” concept which delivers increased tenderness and shelf life, takes up less space in the fridge or freezer, creates less waste and provides logistics and processing efficiencies.