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January 12, 2011
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Food retailers could be doing a better job displaying price comparisons between private label packaged deli meats and national brands. Read what else PL Buyer secret shoppers found that can help you sell more of your deli meats.


Retailers are doing few on-shelf price tag comparisons between their private label packaged deli meats and national brands, even when private label and nationals are merchandised next to each other, report PL Buyer’s secret shoppers in their walks down the packaged meat aisle.
In-store ads for private label cold cuts were evident in only some of the retailers visited, but most did stock their private label offerings directly next to national brand competitors.

PL Buyer sent five of its secret shoppers walking down the self-service deli aisles of food retailers in California, Illinois, Minnesota and Wisconsin the weekend after Thanksgiving, 2010, to evaluate how their local stores are doing when it comes to marketing and merchandising their packaged luncheon meats.

In addition to looking for in-store merchandising, shoppers also recorded prices of comparable private label and national brand turkey, ham and bologna and did their own taste tests. The goal of our walks down the aisle is to provide you, our readers, with market intelligence and insights you can use to increase your sales.



Looking for in-store ads touting private label offerings produced a mixed bag of results from PL Buyer secret shoppers. Private label ads were evident at a Cub Foods and Albertson’s but not at a Pick ‘n Save in Wisconsin nor a Fresh & Easy. Some private label ads were evident at a Target.

Prices for private label offerings were lower than their national brand competitors but package sizes varied, forcing consumers to do some quick in-store math to determine which choices offered them the most for their money.
At Pick ‘n Save, for example, the Roundy’s brand turkey was priced at $2.69 while the Hillshire Farm turkey was priced at $2.59. The Hillshire package was only 9-ounces, however, compared to 10-ounces for the Roundy’s product.
At Target, a one-pound package of Market Pantry turkey was $3.29 compared with a 12-ounce package of Hillshire Farm turkey retailing for $3.59.
When package size was the same, store brands enjoyed a price advantage ranging from 39 cents at Target, to as much as a dollar a package at Cub Foods. The price gap between private label and the national brand was a dollar at Cub for all three meats. At Fresh & Easy, the gap in all three was 50 cents a package.
The highest price a PL Buyer shopper found was $7.99 for a one-pound package of Oscar Mayer ham at Albertson’s. That compared with a price of $3.49 for a 10-ounce package of Albertson’s private label ham, which translates to 34.9 cents an ounce for the Albertson’s product compared with 49.99 cents an ounce for the national brand, a 43.2 percent gap.
Target, Fresh & Easy, Albertson’s and Pick ‘n Save had no private label bologna for our shoppers to compare.

Asked to comment on other things they noticed as they walked the aisle, our shoppers discussed private label packaging, the lack of ingredient information on private label products and product placement.

Private label packages at Fresh & Easy “are not flashy,” says secret shopper Chuck K. “Their packaging seems to be smaller and more square than rectangular. They take up less space and in less bright colors than the national brand stuff.”
Joe E. is surprised Albertson’s doesn’t do more to advertise the health aspects of its products. Noting that Oscar Mayer tells consumers its Deli Fresh ham is 98 percent fat-free, he notes that “Albertson’s is cheaper, has lower fat content and yet the packaging makes it difficult to realize. I just wish that they would also exclaim that they don’t have high-fructose corn syrup and are even healthier for you. Neither one contains it, yet so many comparable pre-packaged deli meats do.” Joe has a corn-allergic child and so has stayed away from store brand cold cuts but reports he now has tried Albertson’s Deli Indulgence meats after discovering they are corn syrup-free.

Andrew S. notes that private label packaged luncheon meats are on the lowest shelf in the case at Cub and that he sees little difference in package design between them and the branded products.



Tasting Oscar Mayer vs. Albertson’s, Joe E. says, “Frankly, both Oscar Mayer’s Deli Fresh and Albertson’s Deli Indulgence taste exactly the same.” He was not alone in finding no taste difference between private label and national brands.
“I normally buy ham and turkey, Hillshire Farm or the store brand, and I think they taste very similar. This is why I normally buy either, depending on price,” says Andrew S. in Minneapolis.
Other shoppers, however, found taste differences. “I like the Hillshire Farm Honey Ham more because it was moist, not too salty and had a more normal texture than the store brand,” which was Pick ‘n Save’s Roundy’s brand, notes Regina C. in suburban Milwaukee.

For Target, “the Market Pantry meat usually tends to be ‘watered down’ to me and it just tastes more bland than the national brand for turkey and ham that we eat,” says Jeff L. in suburban Chicago.



Take a walk down the packaged meats aisle and you’ll notice, as did PL Buyer’s secret shoppers, the usual assortments of turkey, ham and roast beef. While other meats are available, the big three dominate the cold cut aisle.
As a result, change in this aisle means packaging changes to appeal to consumers’ ongoing quest for convenience, suppliers of private label packaged deli meats and industry watchers say.
Where once there were only hanging packs of cold cuts, today there are rows of tubs filled with product. Now those tubs are evolving into less-material-intensive, semi-rigid peel-and-reseal mini-tubs or trays. These new packages are smaller than traditional tubs and have flexible tops that open and reseal. The new packages eliminate the need for an inner package.
“They offer all of the benefits of resealablity but when compared to [traditional] tubs you’re talking about half the material … so they’re an environmentally-friendly version of a tub seal pack,” says Mark Russell, director of business management with West Liberty Foods, West Liberty, Iowa. West Liberty supplies Costco with ham and turkey under its Kirkland store brand banner.
In other packaging developments, look for double-zipper bags to increasingly show up where once there were only single-zipper types, Russell adds.
On the product side, rising commodity prices will pressure margins while ongoing competition from the fresh deli case and the myriad sandwich shops that dot the country will make it a tough year to raise prices despite rising costs. National brand kings Hillshire Farm, owned by Sara Lee, and Oscar Mayer, owned by Kraft, have been locked in a fierce price battle and “when they fight everyone gets hurt,” notes David Schanzer, CEO with supplier Plumrose USA, East Brunswick, N.J. “The category is flat in terms of volume,” Schanzer says.
Price spreads between private label and national brands have ranged from 5 to 25 percent but generally hover around 20 percent, sources say. Whether those can hold if the national brands continue in a price war will be a major question.

In terms of product offerings, combo packs including several meats will continue to appeal to price-conscious shoppers, predicts Tim Vance, director of marketing with Kunzler & Co., Lancaster, Pa.

Private label products will see flavor variations, such as Kunzler’s prime rib-flavored roast beef or West Liberty’s black pepper turkey and applewood smoked ham. PLB


Editor’s Note: PL Buyer secret shoppers are recruited through LinkedIn and Facebook as well as through personal contact. Each is given a questionnaire on a category and told to shop where they normally shop. Future panels will look at other aisles.


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