1. Consumer Research Highlights
Retail Advisory Committee
April 27, 2011

2. To review today Current Research Highlights Planned Research Overviews
Pricing and Promotion
Meat to Meals, Part 1
Who is the Pork Champion? (consumer segmentation)
Planned Research Overviews
Pork Champion Consumer Survey
Meat to Meals, Part 2

3. Pricing and Promotion Research
The goal: Utilizing available resources and data, provide “best practices” for key facets of pricing and promotion to optimize fresh meat performance

4. Findings: Timing
Some cuts currently considered “seasonal” can be effectively merchandised year round “Off season” has been defined by retailers and can be significantly altered to build added sales opportunities While regional differences exist, there are opportunities to close the “seasonal” gap in every region
Depth
Vehicle
Mix
Frequency $
Results
Timing

5. Significant opportunity : Close gap between holiday sales and remaining time periods
Total U.S.
40% gap
Source: VM Meat/FreshLook, 52 weeks 2009/2010 data arranged by week to begin 1/1

6. Pork example
Chops are consistent year round, similar to ground beef and chicken, and merit additional focus
Roasts exhibit seasonality, but have consistent “off season” sales as well
Ribs show the greatest seasonality, but have solid “off season” sales potential
Chops
Roasts
Ribs
Total U.S.
Pork ribs – even in the off season – are a strong item outselling other promoted species/segments (whole chickens, beef roasts)
Source: VM Meat/FreshLook, 52 weeks 2009/2010data arranged by week to begin 1/1

7. Findings: Depth of Discount
Timing
Optimum range of discount – for all species and segments – is about 10% (+) Deep discounts (30%+) do not consistently build baseline sales/shopper loyalty and do erode profits $
Results
Depth
Vehicle
Frequency
Mix

8. Source: Composite database, retailer analysis
Depth
Similar Patterns exist between Species for Volume, Sales and Profitability
Beef
Chicken
Pork
Pounds
Sales
Profit
% Change vs. Baseline
% Change vs. Baseline
% Change vs. Baseline
10%
20%
30%
40%
10%
20%
30%
40%
10%
20%
30%
40%
Depth of Discount
Depth of Discount
Depth of Discount
Source: Composite database, retailer analysis

9. And within pork category
Depth
And within pork category
Chops
Roasts
Ribs
Pounds
Sales
Profit
% Change vs. Baseline
% Change vs. Baseline
% Change vs. Baseline
10%
20%
30%
40%
10%
20%
30%
40%
10%
20%
30%
40%
Depth of Discount
Depth of Discount
Depth of Discount
Source: Composite database, retailer analysis

10. …Thru to the Sub-Category Level
Pounds
Sales
Profit
% Change vs. Baseline
% Change vs. Baseline
% Change vs. Baseline
10%
20%
30%
40%
10%
20%
30%
40%
10%
20%
30%
40%
Depth of Discount
Depth of Discount
Depth of Discount
% Change Vs. Baseline At Different Discount Levels
Chops
Roasts
Ribs
≤ 10%
11-20%
21-30%
>30%
Pounds
267
284
293
497
162
189
387
712
513
543
596
1424
Sales
168
145
126
222
137
142
263
412
328
297
340
Profit
174 94
(16)
(45) 59
(73)
(233)
(385)
184
136
(58)
Source: Composite database, retailer analysis

11. Findings: Product Mix $
Too much emphasis on single segment/species misses the consumer’s inherent need for variety Too much emphasis encouraging trade down sacrifices profit margin and risks dissatisfying shoppers Opportunity for increased promotion on Premium Beef segments and across all Pork segments
Timing $
Results
Depth
Vehicle
Frequency
Mix

12. Findings: Frequency of Featuring
Points out need to increase frequency across species/ segments versus focus on only conventional items (ground beef/boneless skinless chicken breasts)
“Broader” promotion can produce incremental (versus cannibalistic) results
Broadening promotion to, for example, both bone-in and boneless pork chops can grow both segments
Timing $
Results
Depth
Vehicle
Frequency
Mix

13. Findings: Vehicle
Timing
Ads typically act as a “reminder to purchase” trigger – not exclusively about pricing Shoppers want new meal ideas but meat department not delivering in-store or, oftentimes, online $
Results
Depth
Vehicle
Frequency
Mix

14. Next Steps: Pricing and Promotion Research
We will review this dataset in depth and identify other key findings to share with retailers

15. How America Shops for Meat and Meals

16. Research background Objectives:
To better understand meal planning and the role of fresh meat
Identify opportunities to gain a larger share of meals
Methodology:
Web-based survey
2,000+ respondents
Geographically and demographically dispersed; representative of U.S.
Primary shopper of food
Meat consumers
Ages

17. Key Learnings
There are distinct types of shoppers based on meal planning; each represents meat case opportunities
The meat department is truly a centerpiece in shoppers’ lives, serving as a core department for family meals
There is great opportunity in the meat case to improve “shopability” and become a source for new meal ideas

18. Research Showed that Shoppers can be Grouped according to their level of Planning prior to Shopping
Which of the following is closest to your most typical approach to planning your dinners on a weekly basis?
Before going shopping, I/we plan what we will have for dinner for 5 or more nights
Before going shopping, I/we plan what we will have for dinner for 3-4 nights
Before going shopping, I/we plan for 1-2 nights and decide the rest later
I/we do not really plan out our dinners before going shopping; I just decide while in the store
I/we do not really plan our dinners; we decide each night based on what’s in the refrigerator/freezer and what we are in the mood for
Heavy
Planners
35%
Medium
Planners
35%
Non Planners
30%

19. Heavy Planners had Higher Household Income and Education Levels
Some High School/ Degree (or equivalent)
Some College
College Degree
66%
48%
Post Graduate Degree
Medium
Planners
Some High School/ Degree (or equivalent)
Some College
College Degree
65%
45%
Post Graduate Degree
Non Planners
Some High School/ Degree (or equivalent)
Some College
College Degree
56%
40%
Post Graduate Degree

20. Attitudes Toward Home Cooking Vary Across The Three Shopper Groups
Heavy Planners enjoy cooking and believe home cooking is healthier

21. Meat Department Is Important In Choosing Their Store
Importance In Choosing Store – % Very/Somewhat Important Top 3 Departments

22. Only about One in Four Shoppers is Loyal to one Meat Department
% Meat/Poultry Purchased At Your Main Store
100%
75-99%
Up To 75%
24%
41%
35%
22%
43%
27%
37%
36%
Heavy Planners
Medium
Planners
Non Planners

23. Why are Shoppers Buying Meat Elsewhere?

24. The Meat Department is not a Key Source for Meal Info
Sources For New Meal Ideas
% Very/Somewhat Important

25. Summary: Conclusions/Action Steps
There are different shopper types, each with different needs
Each shopper type believes the fresh meat case is critical in driving store choice
Over one-third of all shoppers purchase up to 75% of their meat at a different store from where they do the majority of their shopping - - indicating a lack of loyalty
Shoppers are seeking a more “shoppable” meat department that:
Is “attractive, clean”
Offers “variety”
Is “interesting/fun to shop”
Makes shopping for fresh meat easier
Shoppers want meal ideas - - communication goes beyond just pricing

26. Next Steps: Meat to Meals Research
We will use portions of this research as a benchmark and utilize additional research methods such as shop-alongs, online survey, and in-store observation The ultimate goals are to identify key opportunities to influence fresh meat decisions within the shopper’s planning process and pinpoint effective methods of reaching consumers during their shopping experience in order to increase fresh meat purchases at retail

27. NPB’s Consumer Segmentation Research – Identifying Our Target

28. Goals of this research
Understand all U.S. pork consumption Determine the right consumer Target – our Pork Champion Develop the right consumer Message Create an on-going consumer insights resource for use with retail partners

29. What are the characteristics of the Pork Champion?
Our core consumer loves pork, meat, and the whole meal
Enjoy trying different types of meat or poultry, and different ways of preparing them
Believe meat is an important part of the meal, and side dishes are just as important
Enjoys cooking & food
Take pride in their cooking skills; are confident cooking pork
Like to try new things at restaurants, and make restaurant dishes at home
Loves life
Confident and optimistic, social and altruistic
Feel good about their lifestyle
Want to try new things

30. The Pork Champion 28% of the population accounts for 78% of fresh pork consumed at home
51%
38%
35%
U.S. HHs
FRESH
At Home
FRESH
Away
PROCESSED
At Home
PROCESSED
Away
Source: NPB Consumer Segmentation Study, 2010

31. Who are these Champions?
Women and men both included in target Married, in a smaller household Both working full-time outside the home years old College grad, making $50K-$99K per HH Any ethnicity, living anywhere Medium/heavy pork user Medium/heavy meat & poultry user A confident cook, but not a foodie

32. How We Reach our 2014 Goal Our Pork Champions
Annual Fresh Pork Eatings
Baseline
Goal
2011
2012
2013
2014
Heaviest 76 +3 +6 +9
+12 88
Our Pork Champions 68 +1 +3 +6 +9 77
Lightest 42 +0 +1 +3 +6 48
10% Growth

33. Next Steps: Reaching the Pork Champion
Pork Champion Consumer Survey

34. Goal of this research
Solicit feedback regularly from Pork Champion target consumers on marketing programs, communication elements and other topics of interest to the Retail Marketing Team, Domestic Marketing and other NPB program areas, as well as retail partners Ultimate goal: Better understand and more effectively communicate with Pork Champion target

35. Pork Champion Consumer Survey Quick Overview
Survey 1000 randomly selected Pork Champions on a quarterly basis
Maximum of questions per survey, with two being open-ended
Survey questions submitted by:
Retail Marketing Team
Domestic Marketing and other NPB program areas
Retail partners
Conduct three surveys in FY2011 (quarterly in subsequent years):
1st: Family Gathering concept, ingredients, cut, photography
2nd: Holiday roast promotion possibilities, in-store execution ideas
3rd: First quarter 2012 elements