I had a good laugh the other day in response to a Bloomberg News story breathlessly touting a “hot new” trend in the processed meat industry: Selling higher quality lunchmeats.
According to the story, brand-name pre-packaged product lines now include such “deli quality” choices as thin-sliced roasted turkey, prosciutto and soppressata.
What’s humorous is that I spent the better part of the entire decade of the 1980s writing editorials and feature stories decrying the direction the processed meat industry was heading at that time, toward fewer choices and “controlled” quality driven by least-cost formulation schemes—all in service to the notion that the road to profitability was built on high volume and low unit costs.
Of course, that strategy wasn’t limited to marketers of processed meats, but the twin trends of industry-wide consolidation (in both the processing and retail sectors) and ruthless category management turned the typical supermarket pegboard into a wasteland of cheap, water-logged products that offered consumers anything they wanted—to paraphrase Henry Ford—as long as it was ham, turkey or bologna.
Retailers themselves exacerbated the situation by deliberately marketing their service case deli meats against the cheaper “value-priced” pre-packaged lunchmeats. Not only were most of the brand name sliced ham, beef and poultry selections dripping with purge, processors didn’t even bother to utilize easy-open or resealable packages that would at least offer a measure of convenience.
I certainly wasn’t the only commentator arguing that pursuing higher quality, developing better packaging and offering additional choices would be a smarter way to grow the category. Virtually every marketing conference back then presented researchers, marketers and academicians who lectured audiences with much the same critique.
Upscaling with a vengeance
And now, here it is mere decades later, and voila! Companies are “looking to capitalize on consumers’ increasingly sophisticated tastes,” as Bloomberg phrased it, and are rolling out upscale options featuring new flavors, thicker slices and expanded choices that focus on “natural” (whatever that means) and nutritional positioning.
It makes sound marketing sense in terms of targeting, if not timing. Virtually every category of food products—cereal, coffee, pasta, beer—and even such staples as canned soup and frozen vegetables has undergone a major makeover that effectively improved both quality and margins. Unfortunately, the meat industry has historically been much more aggressive about cutting costs than boosting quality, and there’s no doubt that the slow decline of lunchmeat quality common during much of the ’80s and ’90s not only affected profits but gave the larger processed meat category an undeserved black eye.