Price wave reaching meat products

While prices are rising, demand is shrinking in the market of meat products. There are differences between categories in the extent of recession, in the market share of private labels and in that of pre-portioned products. A wave of price rises has begun in the summer. – As meat and meat products account for a significant part of basic food products, this is where a drop in demand resulting from rising prices appears first – says Zoltán Szántó, brand manager of PICK Szeged Zrt. Most consumers have started looking for promotions and the popularity of private labels is expected to increase. The importance of promotional leaflets and throwaways is also going to grow. The market share of discount stores is expanding. Consumption is slowly shifting from pork products to poultry products, which are cheaper. According to Nielsen data from April, sales dropped last year in terms of quantity. The market share of private labels has risen to 26-27 percent. Dr. Éva Pénzes, marketing director of Kaiser Food Kft, is certain that the drop in demand is going to continue. – At the same time, demand for cheaper categories will grow, while the same thing might happen in the premium category, as price is not an important consideration for the consumers of premium products. Recession will be strongest in the medium price segment – she adds. Food safety scandals have probably played a part in boosting the popularity of packaged products, which always belong to brands, even if the brand is a PL. – We are looking for market gaps where new possibilities exist – says Zoltán Szántó. Scooby-Doo products for children and the Pille pulyka product line launched in the beginning of 2008 are examples. As coming up with new ideas is difficult, existing assortments also need to optimised. As a result of optimisation, the least popular PICK products have been discontinued. The production process has also been revised in order to improve efficiency. Kaiser Food is also working on adapting to new trends by product development. In practice, they focus on salamis, sausages and frankfurters. – We always try to offer something radically new to our customers, like our economy size, sliced salami product line in protective gas packaging – says Dr. Pénzes Éva. – Packaging is also important for brand communication, especially when the brand represent reliable quality – she adds. Unbroken growth in the popularity of pre-portioned and packaged products continues. – In order to communicate product advantages, we use icons and text on packaging – says Zoltán Szántó. Apart form packaging, the importance other POS tools is also increasing. Taking the modernisation of the PICK Virsli product line as an example, blue shelf labels and stoppers have been designed to attract attention to the products. The POS presentation of products is of primary importance. All manufacturers want to have a uniform presence, preferably in blocks. – We provide extra support for retail units which follow our recommendations for displaying our products – says Zoltán Szántó. Their marketing communication is highly planned. There are differences in the level of ATL support for different products, with only trade marketing tools used for some. One of the innovations in 2008 has been the modernisation of the packaging of Ringa bacon and the launching of flavoured bacons. Apart from new design, sizes have been reduced from 500 and 200 grams to 450 and 150 grams respectively. More cautious spending on marketing is another consequence of recession. Classic media tools are gradually losing their effectiveness and it is becoming increasingly difficult to influence consumers. New ideas are required continuously. – As consumers usually make their purchasing decision regarding meat products in the POS, this is where we have to exert an influence on them with promotions, focusing on optimal placement and facing – says Dr. Éva Pénzes.