1. food and drink
2. food and grocery retailers
3. butchers

B UTCHERY
By Michel Mack
Supermarket butcheries
have become an
indispensible attraction
for customers and their
appeal a competitive
issue. Tight consumer
pockets and the recent
‘meat scandal’ have
put a damper on sales
and caused quite
a bit of consumer
reluctance. Ensure your
butchery offer remains
successful through
good quality products,
excellent service and
transparency
Differentiate through service
A butchery is only as good
as its products and service
The trusted butcher around the corner has mostly been replaced
with the local supermarket, which needs to live up to the ‘legacy’.
customers. They know me and they know
that we prepare our own meat from the
carcass and can vouch for what is on our
shelves,” says Deon de Lange, butchery
manager at SuperSpar Glen Acres in
Kempton Park, Gauteng.
These relationships pay off. The butchery
is the heart of Glen Acres’ business and
contributes an average of 16% to total
store turnover. On an average week they
turn over 12-15 tons of beef, two tons
of lamb, two tons of pork and one ton of
chicken. 36 marinated cuts are on offer
and customers are supplied with recipes
on request. 90% of all meat on offer is
cut straight from the carcass and the
remainder is bought in from Spar approved
suppliers. “Customer service and product
quality come at an absolute first. This is my
policy and our recipe to success,” he says.
Quality on display
Much like eating a plate of food, customers
buy their meat with their eyes as well. “All
meat on display needs to be trimmed well
and the excess fat taken off. Customers
will not buy it if it doesn’t look right. The
quality obviously has to be up to their
expectations and meat thoroughly checked
at the receiving bay,” says de Lange.
Meat with any imperfection needs to
be returned to the supplier immediately.
The supplier needs to be made aware of
the grading and quality the butcher is
looking for and what criteria he assesses
the meat by. This helps to minimise
product rejection logistics, which are
equally inconvenient for both parties. It is
also advisable to have several suppliers for
flexibility and being able to negotiate the
best buy-in prices.
▲
For generations, meat has been bought
from the trusted butcher around the corner
who knew his customers by name, their
preferred cuts and could vouch for every
product in his display cabinet. The hunt
for margins and low prices has largely
diminished the independent butchery
business and most consumers today refer
to their local supermarket to meet all their
meat needs.
The butchery can therefore be a major
attraction for customers and give them
some of the personalised service that has
been lost in many mass-market type stores.
This has recently gained even more
significance with the City Press ‘meat
scandal’ exposé that raised a lot of
questions of where the neatly packaged
meat on supermarket shelves actually
comes from.
“There was a definite dip in sales of
mince and boerewors when the meat
labelling story broke and they are slowly
picking up again. Customers also asked a
lot of questions about the origin of the
meat. For us, dealing with this came down
to having an actual relationship with our
Don’t butcher
your meat sales
9
SUPERMARKET & RETAILER, JULY 2013
▲
BUTCHERY
“The appearance of a carcass gives an
immediate indication of whether the meat
is fresh or not. A fresh carcass will have a
fresh smell and the meat must be red and
moist. Slimy meat is the best indicator that
the carcass is not fresh. Meat also needs
to be stamped and come from a reliable
source,” says Anzelle van Niekerk, owner of
the SA Butchery School in Pretoria.
De Lange adds that vacuum-packed
products also need to be inspected
thoroughly. Meat that has been vacuum
packed for a longer period will draw blood.
“The more blood there is in the packet, the
older the product is. Also remember that
the blood in the packet is additional weight
that you pay for,” he says.
Once retailers have ensured that the
products on their shelves are of the right
quality, they need to let customers know
what the butchery is doing for them. “You
have to be available at the butchery for
any customer query and also be there to
recommend the right cut. Inform them
about specials, as customers often don’t
realise when products are on promotion.
This also helps to build trust and generates
additional sales,” says de Lange.
An appealing butchery section draws additional feet into the store.
Cutting down on cuts
Every week, if not every day, we read in
the news that consumers are struggling
financially, that disposable income keeps
decreasing and that less money is spent on
luxuries as a result. Unfortunately, rump
steaks, lamb roasts and more expensive
cuts are often among these luxuries that
consumers skip on to save money.
“There has been a definite decline in the
retail business for red meat in recent weeks.
Supermarkets are purchasing less product
per week and the current economic climate
definitely has an impact on sales,” says
Reinhard Mulder, sales and marketing
director of Cavalier Foods.
This trend is pronounced despite meat
prices currently being in the consumer’s
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Chicken issues
▲
The chicken industry received quite a bit of
negative publicity in recent months and the
practice of injecting meat with water or
a water/brine mixture, called brining, has
been put in the spotlight. Many customers
also question why imported chicken from
the other side of the world is cheaper than
locally bred birds.
The local chicken industry is a massive
operation. South Africa produces 1.6%
of the global chicken volumes, compared
to 19.6% in the US, 16.8% in China
and 11.5% in the EU. Brazil exports 2.5
times the volume of South Africa’s entire
production. Local chicken cannot currently
be exported because of previous incidents
of Avian Influenza, better known as the bird
flu, in ostrich populations.
South Africa’s annual per capita chicken
consumption is at approximately 36kg, of
which imports account for about 6kg. “This
causes a huge problem in the industry. The
volumes of imported chicken are equal in
size to either an Astral or Rainbow Chicken
and have created massive price pressure for
local producers,” says Phil Tozer, marketing
manager of Earlybird Farms.
Approximately 20 million birds are
slaughtered in South Africa each week and
if imports were locally produced instead,
this figure could increase to 23-24 million
birds. There are concerns around imports
with regards to repackaging practices in
terms of origin, production and expiry
dates. In many instances, these are
not visible to consumers in loose serve
packaging.
“Imported chicken is usually delivered in
bulk cartons, repackaged into smaller units
and sold in loose serve format. Often
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SUPERMARKET & RETAILER, JULY 2013
00232_I.S._3PROD_LUNACOMMS
favour. “The lamb price is the lowest it has
been in five years. The beef price also is
exceptionally low and consumers now pay
less than they have been for the past two
years,” says Mulder.
The low lamb price can be explained
with good rainfalls over the past year, as
80% of all lambs graze on the open field,
as opposed to beef, of which approximately
90% stems from feedlots.
“Prices will go up again in the long-term,
the question is just when this will happen
as they have been flat for the past four
months. Prices also pick up seasonally and
are traditionally higher during winter and
the highest just after winter, explained by
supply and demand,” he says.
Difficult economic times obviously factor
into meat choices. “When time are tough,
as they are now, consumers tend to buy
more chicken and pork. The meat scandal
did have some degree of influence on
buying behaviour, but issues like this will
never profoundly change buying patterns.
The sales of low-priced products will
continue to grow. However, prices are also
under tremendous pressure due to a lack
of consumer buying power,” says Philip
Britz, national sales manager for chain store
meat markets at Deli Spices.
Chicken sales benefitted from the
economic downturn, as many customers
see it as much more value for money. Yet,
chicken did not have a great time in the
press either.
▲
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BUTCHERY
they don’t have production or expiry dates
on them and there are no means of tracing
them back to their source. Especially in
rural areas, controls and enforcement
of labelling legislation is low. As a result,
imported frozen chicken is often still sold
with no form of traceability,” says Tozer.
Imported problems
There are basically two categories of
imported chicken – frozen chicken products
for sale to consumers and mechanically
deboned meat (MDM) sold to the
processing industry. MDM is mainly used in
the production of polonies and sausages, as
well as for further processed food products.
Chicken MDM imports are at 11 000 tons
per month and leg quarter imports average
at 14 000 tons per month.
“Local chicken consumption is more than
double of the beef consumption and it
accounts for an estimated 54% of the total
volume of all animal protein sold in SA,
according to the DAFF,” says Tozer.
The price of chicken is primarily
dependant on the maize and soya prices.
Constantly increasing electricity and gas
prices add to manufacturing costs and drive
prices up further. SA maize prices follow the
import parity price, which fluctuates with
the Rand/US Dollar exchange rate – which
is not good news at this time.
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Consumers are spending less money at the butchery and often go for cheaper cuts.
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Mince experienced decreased sales following the City Press meat scandal exposé.
12
SUPERMARKET & RETAILER, JULY 2013
Local producers, on the other hand, are
invested in long-term production cycles.
Going forward we are likely to see an
increased focus and move to fresh chicken
to improve the sales mix and to lessen the
dependence on IQF mixed portions,” says
Tozer.
Salty business
Something that government has already
made a decision on is the sodium content
of processed meat products. “South Africa
is the first country that has started to
regulate the sodium content of certain
food types. In other countries, sodium
reduction is based on voluntary guidelines.
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Value-adds can be a great draw card
for in-store butcheries.
“Many small to medium sized producers
simply cannot compete with import
prices. Supply and demand are hugely
imbalanced,” he says. Strong competition
and a lack of legislation have helped create
the problem of excessive chicken brining.
Fresh or frozen?
Fresh chicken, 100% natural and unbrined, costs consumers almost double per
kg, compared to frozen IQF chicken. The
market is also limited with approximately
10% share of total chicken product sales.
About 60% of the total chicken sales is
IQF and value-added products account
for an estimated 2%. “If you compare IQF
chicken to fresh chicken and strip out the
bones and brine content, IQF still is a very
attractive value proposition,” says Tozer.
The distribution of fresh chicken remains
a logistical nightmare, as it only has a five
to seven day shelf-life or freeze-by date.
Retailers are faced with the choice of either
dropping their prices significantly prior to
the sell-by date or accommodate huge
wastage. Frequent deliveries of smaller
quantities help to control this, but also add
to the bottom line.
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Most butcheries today offer readily spiced
and marinated meats and motivate customers
to try exotic recipes.
“Yet, there is a good market for fresh
chicken, albeit significantly smaller than
IQF, with higher margin potential. Retailers
have been asking the chicken industry for a
long time to find ways to add shelf-life to
the products and we are working hard on
this,” says Phil Tozer of Earlybird Farms.
Added differentiation is possible through
the introduction of free-range chicken
as well as value-adds. “The industry and
ultimately the customers would benefit
from more consistent and predictable
demand. An additional challenge for the
local industry is the ability of importers to
opt in and opt out, depending on exchange
rates.
▲
BUTCHERY
The first announcement by government
was released in October 2011. The first
draft published in March 2012 and signed
into law in March 2013,” says Alida
Rossouw, sector head of the meat division
at Crown National.
She adds that the South African
processed meat market is quite small
in comparison to overseas volumes. The
local demand is mainly generated by
LSM 5-10 customers. The new legislation
has specified targets for the salt content
reduction to be met by 2016 and 2019.
The salt content of raw processed meat
is to be reduced to 800mg per 100g by
2016 and 600mg by 2019. The current
average is at about 850mg across most
raw processed meat products. Sodium in
Cross-merchandising meat with marinades
and spices is an easy way of motivating
impulse sales.
●
In tough economic times, customers tend to trade down from red meat to chicken and pork.
Prices for red meat and lamb are lower than they have been for the last few years.
Yet, customers still seem to prefer cheaper meats.
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SUPERMARKET & RETAILER, MARCH 2012
cooked processed meats is to decrease to
950mg per 100g by 2016 and 850mg by
2019. Uncured cooked processed meats
may contain no more than 850mg per
100g by 2016 and 650mg by 2019.
“Salt is a functional ingredient that acts
as a preservative and gives shelf-life. When
dropping the salt content, micro-organism
activity can potentially increase and shelflife decreases as a result. It also plays a
major role in the texture of the product
and is a very cost effective ingredient.
Substituting it will lead to price increases,”
says Rossouw.
It’s all about trust
▲
Many butcheries have made their
preparation areas visible to customers for
added transparency, so that they can see
for themselves how their meat is prepared
and what goes into their boerewors.
Good housekeeping is a no-brainer in
this area and needs to be showcased as
one way of retaining or perhaps regaining
customer trust, which has been tainted by
many recent media reports. Retailers and
manufacturers alike have implemented
random DNA testing to ensure and assure
their customers that packaging content
and labels actually match.
How much brine is too much?
The topic of injecting chicken with brine
prior to freezing has been hotly contested
in various news channels and led many
consumers to believe that they are being
ripped off. The situation is a bit more
complicated than that as brining does have
a purpose and its place if done responsibly.
“The practice of brining is nothing
new. Un-brined frozen chicken is dry
when cooked and has a tough texture. It
essentially is a tool to improve product
quality in terms of succulence. We do,
however, need to have a new set of rules
in place to prevent abuse of this practice,”
says Phil Tozer of Earlybird Farms. Most
producers currently declare a meat to brine
ratio of 70% chicken and 30% brine.
Frozen IQF chicken portions average at
a retail sales price of about R15-16 per kg,
largely due to oversupply. Brining brings
production costs down as it costs a fraction
of the meat price. Many manufacturers
therefore try to maximise their profit
margin or bring down their prices to remain
competitive by brining excessively.
“Some producers are known to brine up
to 50-60% of the total product weight. The
industry broadly recognises the need
The chicken business is highly competitive and
many small producers cannot compete with
imports.
for regulation and leading manufacturers
are in discussions with the Department
of Agriculture, Fisheries and Forestry
(DAFF), regarding the implementation of
acceptable brine levels,” says Tozer.
Excessively brined chicken is quite easy
to identify, as the product looks swollen
and the skin is visibly stretched. Retailers
need to do their part in protecting
consumers from excessive brining by
keeping their suppliers accountable to
a certain brine ratio. They should also
stick with reputable suppliers that are
committed to sound practices. This will in
turn put their customers at ease and secure
continued sales.
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SUPERMARKET & RETAILER, JULY 2013
▲
BUTCHERY
“There is always a discussion in the
supermarket industry whether in-store
butcheries or co-packers to supply the
butchery are the best way forward. There
are obviously good reasons and arguments
for both and many stores are very
successful with co-packers.
However, retailers are wary of closing
their butchery altogether and only having
display counters due to the fear of losing
sales. South African consumers still want
the opportunity to interact with the
butchery personnel,” says Philip Britz of
Deli Spices.
The basis for an appealing and good
quality offering is a well-trained and
experienced butcher, which unfortunately
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is much easier said than done. “South
Africa does not have many good butchers
left and quality is lost every single day.
Unfortunately there is no enforced
legislation in place that regulates butchery
training. A lot of training happens on an
informal basis and proper procedures
and safe operation of equipment are not
properly taught,” says Anzelle van Niekerk
of the SA Butchery School.
This very unfortunate trend also
illustrates a great opportunity. Good
butcheries with skilled staff, good quality
products and great service are few and far
between. Make your butchery the best in
town and customers will go out of their
way to buy their steak from your store –
as well as other impulse lines they pick up
on the way!
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SUPERMARKET & RETAILER, JULY 2013