In 1988, talk began of Walmart opening its first supercenter with plans to have over 200 supercenters throughout the U.S. by 1995. To think that Walmart supercenters could go from zero to 200 stores in such a short period of time, especially considering the need for such an intense focus and learning curve on the extremely important perishables category, surprised food experts.

Consumers were skeptical that the Walmart they knew could fulfill their needs like supermarkets had done for years, but traditional retailers were concerned.

Today, there are nearly 3,000 Walmart supercenters and they are one of the top beef sellers in the world.

Another story, some years back, a younger single friend, when asked if she thought peaches had been good in their four-month season, said she hadn’t shopped in for groceries in that time.

Further discussion revealed that she planned her life around activities and then would find food that happened to be close by.

The point of these two stories is to spotlight why food distribution will continuously evolve. New players will enter the game.

And consumers, at certain points in their lives, will adopt new strategies for getting the food they want.

Discussion

Braum’s dairy stores: Braum’s is headquartered in Oklahoma and started as an ice cream and dairy store.

Braum’s Dairy Stores has since transformed itself into a multi-purpose store, still a destination for ice cream and milk, but now also a place to sit down for lunch and dinner, or to buy groceries, frozen items, bakery products, fresh produce and fresh meats.

Author’s crystal ball: We have all seen convenience stores and gas stations that sell hot items. In the gas station industry, the items in the store now drive the bottom line, so we should expect to see an ever-expanding repertoire of food sold there.

Walgreens: Buy your sushi at Walgreens? Find a fresh meat case in their stores? Sounds improbable, but on Tuesday, Jan. 12, 2012, a flagship Walgreens in Chicago began to offer deli items, gourmet wine, a juice bar and fresh baked goods in addition to sushi and yes, fresh meat.

Author’s crystal ball: Consider the fact that Walgreens has over 7,800 drugstores and you can quickly get a sense for the potential this organization has to become a force in the world of food. And what player could do a better job of bringing together the worlds of food and nutrition?

Food trucks: In the past, these would mainly be seen at construction sites, and their various nicknames did not always encourage the appetite.

However, today there are thousands of these food trucks serving casual to gourmet breakfasts, lunches and dinners to people throughout the U.S.

Virtually every day part of every cuisine is represented by these enterprising operators and chefs. Beef certainly plays a role in these operations.

Author’s crystal ball: Customer traffic can be very unpredictable in these locations, so quick prep solutions will be invaluable.

Space, of course, is at a premium. In light of this, one developmental chef recently told us that a small microwaveable roast would be an ideal raw material, allowing the food truck operator to quickly respond profitably to higher traffic than expected.

Sit-down eating in grocery stores: Let’s have lunch. Whole Foods? Costco? Barnes & Noble? Consider the fact that total retail foodservice is estimated by Technomics at over $35 billion, which represents 6.6 percent of total foodservice food and non-alcoholic beverage sales – and you can conclude that’s a lot of lunch.

Author’s crystal ball: Every retail foodservice outlet wants to be known for offering high-quality food. In fact, great food then becomes part of the pull to bring customers into the store for their primary goods.

We expect the quality and diversity of food offerings to increase as more and more players seek that signature set of food offerings.

Change forces change

As food distribution continues to evolve, so must beef. And as an industry, we must feed the innovation pipeline. Here is a summary of new thinking, new processes and evolving technologies that will help us better serve current and new food distribution players.

• New packaging technology – Extended shelf life packaging will be important in some of these new venues, with slower turns than the two to three days that grocery stores realize.
• Package size variety – Many of these new venues have small footprints. And stores in many markets are increasingly selling to smaller households. In fact, 62 percent of households in America today have one to two people. Small retail and housing footprints drive the need for smaller offerings.
• Quick preparation – Time windows for food preparation are shrinking, both in-home and in the food service world. That is why sous vide and microwaveable solutions will continue to find new customers.
• Product mix – Having the right “product” mix is a key. For example, a typical consumer going to the drugstore may be rushed or carrying a minimal grocery shopping list. You might not want to merchandise a seven-bone pot roast that takes more extensive meal planning. More likely, you would want to merchandise quick, staple items such as ground beef, sirloin steak and beef strips. All of these can be quick and very versatile.

To truly meet the needs of customers and consumers, a solutions-based approach to meet their demands will likely be best.

The Beef Innovations Group, funded by The Beef Checkoff, is working on a program called Convenient Fresh Beef (CFB).

This program provides quick and simple solutions for beef meals in less than 30 minutes. CFB uses a combination of technology, chef tricks and seasoning packets to achieve fantastic results. One example is a microwaveable sirloin tri-tip that can be ready in as little as 15 minutes.

Conclusions

Like Walmart becoming one of the largest sellers of beef in the world today, things that sound inconceivable today might be reality tomorrow.

Beef must position itself to be part of this expected change. Innovation in product design, raw materials and technology will be some of the keys to make sure beef is part of this ever-changing dynamic of where consumers currently buy and will buy their food.

References omitted due to space but are available upon request. Click here to email an editor.

—Excerpts from The Beef Checkoff’s Beef Issues Quarterly website

PHOTO

Consumers will see package technology and package size adapt to smaller serving sizes. Photo courtesy of Thinkstock.