How to differentiate poultry with branding, transparency

Consumers demanding transparency in their food and flat meat consumption rates are making branding a differentiating factor for poultry companies looking to increase their profit margins on chicken, according to Steve Sands, speaking at the Chicken Marketing Summit.

Consumers continue to want transparency from the companies that produce their food. As a result, poultry companies need to differentiate their products and tell the story of their products from farm to table. | Photo by Fatality, Bigstock
Consumers continue to want transparency from the companies that produce their food. As a result, poultry companies need to differentiate their products and tell the story of their products from farm to table. | Photo by Fatality, Bigstock

“The call for transparency is real,” said Steve Sands, vice president of protein, Performance Food Group (PFG) – and poultry retailers and marketers can’t ignore this or hope that consumers’ desires for more information about where their food comes from will go away any time soon. Instead, foodservice companies need to align their entire supply chain to differentiate their products and tell the story of their products from farm to table, according to Sands, speaking on July 23 at the Chicken Marketing Summit in Orlando, Florida.

“We have to be transparent; we have to be willing to be transparent,” Sands said.

Research proves consumers want transparency

Overall, Sands pointed to a figure saying that 78 percent of consumers say it’s very or extremely important for grocery stores and restaurants to provide information about the way the food they sell was grown or raised.

But, transparency is not just as simple as stating on the label that a chicken breast came from a bird raised with no antibiotics ever. Foodservice companies must go a step further to win consumers’ trust by providing specific information, such as that on animal welfare, diet, housing, transportation and production practices, which spans across the whole supply chain. Sands cited Mintel data that shows 43 percent of Millennials – major influencers in the push for transparency in the food industry – do not trust large food companies, with 78 percent saying they want more transparency about how their food is raised. This is notable as Millennials have become the largest group of shoppers, and Mintel data shows that 59 percent of these consumers will stop buying a product if they feel the company is engaged in unethical practices, compared to 28 percent of non-Millennials.  Sands emphasized, too, that the definition of “ethical” differs from consumer to consumer, so it is important to know who your consumer is and brand your product accordingly.

How to align your supply chain

PFG, which sold more than 1.5 billion pounds of beef, pork and chicken in 2017, believes that until the supply chain is organized, real product differentiation is not possible. Following this approach, the company developed its own methodology for aligning its supply chain to provide more transparency and quality assurance for consumers. The PathProven food trace technology ensures products are traceable, auditable and meet a specific set of farming and processing standards, addressing consumer concerns such as: antibiotic resistance, food safety, humane animal treatment, environment and sustainability, feed ingredients, domestically produced, animal size and “corporate farming.”

Sands said an aligned supply chain that provides transparency benefits for consumers also offers opportunities for foodservice establishments and retailers, like improved profit margins for suppliers, a more balanced overall program, a closer supplier relationship and better fill rates. Yet, he acknowledged this can be difficult, too. Specific item requirements for different customers, having to utilize the whole bird, balancing delivery dates and getting buy in from customers are all challenges that must be addressed across the supply chain.

Branding opportunity in poultry

Sands recognizes that product branding is not new in the poultry industry, but says it is becoming ever-more important in terms of product differentiation.

“Just putting a name on a box is not enough to be able to call it a brand anymore. [Consumers] want to know something about how it was raised, how is this product different from other products and what makes you special,” he said.

Cms Steve Sands

Steve Sands, vice president of protein, Performance Food Group, discusses how to differentiate your products while speaking at the 2018 Chicken Marketing Summit. | Photo by Alyssa Conway

He gave an example from PFG’s Braveheart beef brand. PFG’s branded protein programs have driven all the company’s growth in the category for the last four years, and Sands said specifically that PFG’s total sales of Braveheart beef grew by more than 16 percent in fiscal 2017. The key: These branded proteins “tell a story.”

PFG’s Braveheart beef is produced by an organized supply chain dedicated to quality, Sands said, which includes agreements with both producers and packers to ensure animal quality and handling standards and ensure product quality. Beyond this, part of PFG’s “story” is that the company is committed to supporting the family farmers who raise the cattle to produce the high-quality beef brand, compensating them directly.

As meat consumption, including poultry meat, stabilizes in the U.S., Sands emphasized that branding and marketing could play an even larger role in driving profit margins going forward.

“Branding becomes more and more important the slower the growth rate, because margin starts to be driven by brand rather than shear consumption,” Sands said.

Product differentiation, he said means more than just advertising a new flavor profile and it can mean something different to everyone; differentiation should include things like price, bird size, feed ingredients, geographic location, production and processing methods, producer stories, and audibility and certifications.

In his concluding remarks, Sands emphasized, “Branding works, branding can drive margin, and it may just be that the poultry industry is at a time in its evolution that branding will become more and more important.”

Join us in 2019

The 2018 Chicken Marketing Summit was hosted July 22-24 at the Four Seasons Resort Orlando at Walt Disney World. Included in the record attendance at the 2018 Summit were attendees from 11 countries. The 2019 Chicken Marketing Summit will be held July 21-23, 2019, at the Belmond Charleston Place Hotel in Charleston, South Carolina.

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