Case-ready cadence: the rhythm of the marketing concept taking packaged meat and poultry...

Proper packaging is to case-ready products what the right casing is to hot dogs. That being the case, it's no wonder that this novel distribution concept endured stringent experimentation and testing over the years, before the meat industry and its retail customers finally settled on modified

With the goal of maximum shelf life, a meat tray over wrapped with film retains an internal environment made up of 80 percent oxygen and 20 percent carbon dioxide. The main alternative is a low-oxygen environment with various combinations of gases, proven to extend shelf life considerably. The rub, however, is that in the absence of sufficient oxygen, meat turns dark purple. Even though the red meat "bloom" returns once the package is opened and exposed again to oxygen, the average consumer judges the meat as undesirable by its appearance.

To be sure, case ready is a phenomenon whose time has come, in some instances, and whose time is still coming in others. That is to say, it's a concept embraced wholeheartedly by some, and less so by others.

"Case ready is the wave of the future, but how fast it grows remains to be seen," food analyst, Jeff Kanter, Prudential Security, NYC, confirms.

That about sums it up -- the staying power of this revolutionary packaging concept seems a sure bet, even though the technology is still evolving.

Let's take a look at some of these issues. First, does it work? The answer, as reinforced by others participating in the report, is yes and no.

Case ready, as it now exists in the marketplace, works well with some meats, but not so well with others. It should also be noted that, though some specialty and niche processors see case ready as a marketing tool, by and large, processors have moved into this area after much work at gaining a modicum of acceptance within the food of retail arena. Due to a host of, reasons, not the least of which relate to food safety, case ready has gamed more than a foothold in supermarkets.

Listen to Gary Sheneman, vice president of case-ready meats for Dakota Dunes, SD-based IBP Fresh Meats, part of the Springdale, AR-based Tyson Foods family. "We embarked on case ready about four years ago, primarily driven by retail demand," he says. "We have grown significantly in this area, and, as we travel around the country we see it, to some degree, in almost every store. In some as little as five to six percent up to one hundred percent -- all of them [stores] are considering to what degree it will make sense for them to convert to case ready."

Tyson, the world's largest processor and marketer of beef, chicken and pork obviously has a vested interest in all meats. Sheneman says ground beef is the highest volume case-ready item, however, followed by pork. "We anticipate more and more transition to beef, but it will take a period of years to do that," he says.

Charles Moore, director of marketing, Dever, Co-based Maverick Ranch Inc. answers the question of why ground beef takes center stage in the case-ready production. "One point I would like to make is that case ready is effective in ground beef, but not in whole-muscle cuts, for there isn't a reliable technology that works across all the muscles with varying pH levels," he explains. "Retailers are looking for one size that fits all, but there isn't a program out there that is working very effectively [in that regard]. Yes, Wal-Mart is doing it, but to what degree of success is debatable. The retailer wants a program with a maximum shelf life of five days in the case. But due to varying pH levels, whole-muscle cuts won't last that long whether they're in the case or not."

When retailers embrace case ready it is primarily driven by a business decision to reduce labor and increase customer service. Ironically, more labor is required on the processor side of the case-ready equation for preparing precise case-ready packages as opposed to bulk shipments, for one thing. Processors also provide more service to their retail customers such as setting up in-store case ready point-of-sale locations.

"The goal of retailers has been to decrease both labor and liability by not dealing with the meat themselves from a cutting standpoint," Moore notes. "Since case ready deals with individual package environments, there is no longer the natural insulating factor of both product and temperature in traditional bulk shipments. Case ready is more open to temperature abuse, and it's more critical to maintain proper temperature one-hundred-percent of the time, from plant to meat case."

In Sheneman's view, retailers in regions facing devastation brought on by a shortage of skilled butchers are more inclined to turn to case ready first. But does case ready automatically translate into a reduction of labor for the retailer? Yes and no, answers Sheneman. "There can be labor savings, but we recommend that there be also a redirection of labor, taking workers from production so they can spend more time with customers who walk up to the case-ready displays," he explains.

As Kanter confirms, case ready not only gives stores like Wal-Mart more selling space, it also gets employees out from behind the counters into the aisles with the customers.

Noting that case ready is not "universally accepted," Leonard Teitelbaum, managing director, New York City-based Merrill Lynch, predicts it's just a matter of time, however. "We have seen a substantial ramp-up time for case ready, and I think the next phase will have to show more acceptance, and then we'll wait for the capital and equipment investments on the part of the processors," he says. "It would not surprise me to see the demand curve flatten out for awhile. It reminds me of the box-beef revolution, when there was resistance on the part of unions because of the reduction of labor. Some supermarkets may still want to offer the butcher or meat cutter for customer convenience. But there's no question that case ready is not a transitory fad. The bulk of meat sales will be case ready. It just makes too much sense. I strongly believe this is the wave of the future."

Mike Queen, president, Pennexx Foods, Inc., Philadelphia, PA, says the glue binding case ready together with retailers must come from a firm commitment by their manager, who must be ready for a learning curve because ordering case ready is different from more traditional bulk ordering. "Shrink is an issue that needs to be addressed, for stores are not used to addressing this in case ready and there may be more shrink for a time," he emphasizes.

Queen says that most retailers see a slight sales decline at the start of a case-ready program, but they come back. "All of the retailers we've dealt with have seen major reductions in expenses and related service contracts," he says, pinpointing significant reductions in workers compensation. "Most retailers don't realize this comes from the meat department."

Queen notes the diminished need for equipment or maintenance service, knife and grinder blade sharpening, linens, and sanitation savings from not having to clean the cases as frequently. "Retailers see a tremendous reduction of staffing, training, and turnover," Queen says. "The size of the meat department is reduced by about two-thirds. Another huge saving is in carrying costs and inventory turns. Case ready has a high rate of inventory turns, especially compared to traditional meat departments."

Whenever one aspect of a distribution chain has the leverage to make excessive demands on another, the result is usually called a "partnership." But it's a partnership dictated by one side, and acceded to by the other. This appears to be the situation with case ready. It's a demand by the retailer, which puts added burdens on the processor in terms of packaging, inventory, and delivery, as well as working more closely with the retailer to evolve a custom-designed program.

Processors, generally, have responded to the challenge, and are looking at what might be considered a burden as an opportunity to extend customer service, thereby cementing customer loyalty and long-term business commitment.

Mike Zimmerman, director of case-ready development, American Foods Group, Green Bay, WI, reports he is getting more and more calls from retailers interested in exploring the transition to case ready. "One of the biggest problems is dealing with the people issues, the human aspect," he says.

These issues, as Zimmerman explains, focus on culture and lifestyle changes. Long-time personnel are displaced or fired, for example. Moreover, many case-ready packages have the look, as well as the reality, of being prepared elsewhere. And many retailers see themselves as losing an important point of differentiation from their competitors, as well as giving up an area of real customer service by no longer cutting meat to order.

"Initially, there's a lot of work in setting up a case-ready program," Zimmerman says. "Fortunately for us, we don't do canned programs. We ask the retailer, 'what do you need?' and then we build it for them."

How do processors break through retailer skepticism? Patiently is one answer.

"All retailers, if they are not already involved, are studying case ready and wondering how it might fit," Sheneman says. "That's where we come in. We spend a lot of time with the retailer, and feel it's our obligation to present the product so it will move straight through to the consumer. Our service obligations are somewhat different and more extensive than they've been in the past."

Julie Berling, senior marketing manager for St. Cloud, MN-based Gold'n Plump Poultry, says her company has been in the case-ready arena for seven years. "We've moved beyond case ready," she stresses, referring to Gold'n Plump's pioneering fixed-weight-scanable-product program. As opposed to a random weight, each package heading to the retail case has a net fixed weight, along with the manufacturers' freshness code to ensure quality. The company has also put a lot of effort into package design. "Our consumer research shows that appearance is the number one factor in selling case ready," Berling says.

Leann Saunders, vice president, marketing, PM Beef Holdings LLC, Kansas City, MO, says case ready involves a much more extensive level of planning to fulfill customer needs. "There is much more organization and orchestration at the retail level than was typically done before," she says. "We have to work so much closer through vendor and customer relationships so that it becomes a partnership. We have to do not just what works for us, but what also works for our partner."

Yet, even in the best of times, a partnership relationship can suffer a bit of a strain. The next question is if case ready is a concept driven by the retailer, why, as indicated above, are so many of them slow to embrace it, or else need coaxing? The answer, of course, is that there are many different retailers. It's no secret that the world's largest retailer, Wal-Mart, has been the driving force behind case ready.

It's reported that IBP targeted Wal-Mart for whom it packaged its Thomas E. Wilson branded case-ready beef. Wal-Mart's constraints on the arrangement were sufficient enough for Tyson to phase out the brand upon acquiring IBP. "Wal-Mart is not Tyson's only customer," Sheneman says bringing the case-ready matter full circle to question whether to brand or not to brand.

Since case ready remains in a state of evolution and flux, it's not surprising that there is no dear direction as to whether the processor or retailer will carry the brand name. For example, in late August, John Tyson, chairman and chief executive officer, announced the replacement of the TEW brand on roasts, other further-processed beef and pork products, and case-ready pork. He said the beef product would be repackaged with clear film packaging without a brand. The conversions are expected to take place within six months, depending on product category.

Roasts and further-processed beef and pork items will carry the Tyson brand as well as case-ready pork. But for now case-ready beef will be offered in unbranded form to allow stores to add their brand names. Tyson plans to eventually offer a limited number of value-added and branded fresh beef products, while continuing to support strong regional brands such as Wright bacon and Weaver chicken products.

Queen of Pennexx and Saunders of PM Beef Holdings say they offer their own brands or private label, but don't have any particular preference. On the contrary, Gold'n Plump is wedded to its brand. "We are a branded supplier, and believe consumers have a very strong inclination toward brands they favor," Bering explains. American Foods Group's Zimmerman offers another view. "We prefer the retail brand," he says. "If the product can be designed around the retailers, with their specifications and design, we believe he will be more active in supporting and promoting it."

Moore of Maverick Ranch makes another point. "Some retailers think there's safety in going with a national rather than retail brand. In the case of a recall, it will be the national brand that takes the heat," he says.

If to brand or not to brand is the question, there won't be simple answers.

Although generally driven by retailers, case ready is an ideal vehicle for marketing niche or specialty products.

"It is a very good marketing tool for me, a niche marketer of natural beef," confirms Moore. "We don't have the high tonnage of commodity beef. We'll sell ten to one-hundred pounds of product in a store per day as opposed to one-hundred to a thousand pounds. Case ready works very well for us on this scale."

Catelli Brothers, Collingswood, NJ, is another specialty processor capitalizing on case ready. "Our company is very focused on case ready" emphasizes Tony Catelli, president and chief executive officer. "All of our efforts are growing that category. We're able to offer veal and lamb to a larger and more diverse audience." The products are offered in various packages, including combinations of both. Though the company distributes nationally, it concentrates on Northeast markets. Catelli sees that changing with case ready which will allow him to make "a truly national presence" with his branded product.

"By doing the whole program, we take responsibility for everything, the quality, food safety, and training," Catelli says. "We place an emphasis on the fact that American lamb is two- to three-times fresher than imported lamb. We do a lot of sampling in stores and back it up with promotional materials that combat the perception that veal and lamb are too expensive. We see the majority of retail sales going in this direction and are a thousand percent committed to case ready."