By: Rick Stein, Vice President of Fresh Foods, Food Marketing Institute
As we approach the holidays, your stores are bustling with shoppers trying to find the perfect meal for their family and friends. Pork tenderloin is a staple for many holiday tables, as evidenced by Google yielding nearly 1.6 million results for recipe ideas. While the pork dish itself might earn rave reviews, the topic of pork quality and the new pork grading proposal for pork tenderloin won’t likely come up in dinner conversation unless you’re a retailer.
As I outlined in my last blog, the USDA is reviewing, and has opened for public comment, a plan to revise the voluntary pork standards currently in place. But does the typical consumer know the difference in quality and, more importantly, are they willing to pay for perceived differences? According to research conducted by the National Pork Board, the answer is “yes.”
In 2016, the Pork Board commissioned Market Economics, LLC, and noted economists Jayson Lusk, Glynn Tonsor, Ted Schroeder and Dermot Hayes, for a benchmark study to measure a consumer’s willingness to pay for quality. In brief, the survey of 5,011 respondents confirmed that you do not have to be a “meathead” to recognize quality. Consumers surveyed said that redder loin chops with visible fat content (i.e., marbling) translate to “higher quality” in their minds.
Additionally, the research showed, no matter if a consumer preferred pale pink or deep red, each consumer was willing to pay more for the product that met their preference of quality – anywhere from $0.69 to $1.18 more per pound, according to the study. This is significant because with or without a defined “quality standard” – however that is measured – consumers will pay more for a product they perceive to be of higher quality.
It boils down to a simple fact: As retailers, there is the potential to sell higher-grade pork and receive a premium price associated with that value by the consumer.
- According to USDA data analysis performed by Express Markets, Inc., protein demand has never been higher, but for the past 20 years, U.S. pork consumption has been relatively flat at about 50 pounds per person per year. Today, overall protein sales are increasing and fresh pork has seen only a modest increase.
- According to Nielsen, the average American consumer buys fresh pork just seven times per year, which is fairly low.
- National Pork Board research also shows that the primary barrier to fresh pork purchases is an inconsistent eating experience. Consumers already gravitate toward value-added pork products like ham, bacon and sausage, largely because they prefer familiar names, flavor and simple-to-cook pork products. Getting the fresh pork loin, for example, into that space will only help to increase the total value of all pork sold at retail.
A pork grading system provides an objective method for delivering a consistent consumer eating experience which, in turn, will drive repeat sales. As these guidelines are considered, I’m fairly certain that pork tenderloin will be on the wish list for every meat category manager each holiday season.