“The more we communicate, the better off we will be,” says Bob Fields, Senior Merchandise Director for fresh meat, branded deli, and gourmet deli at Sam’s Club; addressing members of the Iowa Cattlemen’s Association earlier this month. “We need to understand what producers are doing from the genetic selection and production standpoints to deliver quality beef five to ten years down the road, and the beef industry needs to understand what our consumers want.”
Now in its 30th year, Sam’s Club is part of a warehouse club industry that began 60 years ago. Its customers are members who pay a membership to shop there. The typical Sam’s member has an annual income of $80,000-100,000, compared to the average Walmart customer who makes $30,000-50,000 a year. “It means they have much higher expectations from a quality standpoint,” says Fields. Sam’s Club’s 620 locations across the U.S. and Puerto Rico serve 40 million members. “That’s 40 million opportunities to make a customer happy, and 40 million opportunities to upset one.”
Fields says Sam’s focuses on one member at a time, one visit at a time; and the retail outlet focuses on quality.
“I’m in the business of selling protein. What’s important from the member standpoint is flavor, tenderness, juiciness. You can buy salmon from me, chicken, lamb; but the reason they’re buying beef is because it tastes good.”
Fields purchases Upper Choice and Prime beef. His data shows a Select cut comes with a one in four chance of a negative eating experience, while Prime reduces that possibility to one in 27; and his goal is to eliminate his customers’ negative experience. “People won’t necessarily remember a brand, but they will remember where they bought it. And they will tell their neighbor.”
Meeting demand for the quality product is one of Fields’ primary concerns. “We need more Upper Choice and we will pay money for it. We’re running our entire business on 23 percent of what you’re producing. We don’t want to lower the quality.”
But they would like to lower the size. Fields says steaks must be cut at least 1.25 inches thick for the desired eating experience. (“The consumer doesn’t know how to cook the thinner cut and will cook the flavorful marbling out of it.”) And consumer tastes have changed through the years, with a recent emphasis on smaller portion size. That means the 11- or 13-inch ribeye is preferable to the 15- or 17-inch.
Fields says he fully understands the efficiencies all along the production chain of adding more pounds per carcass, “but sometime or another, enough has to be enough” if producers want to meet the demands of retail outlets like Sam’s.
Fields says there are underlying issues that affect Sam’s purchasing decisions as well. As a company they strive to do business with those who adhere to standards of social compliance, specifically issues of forced labor or mistreatment of labor. He says the beef industry has shown its high standards in those areas, as well as its care of land and animals. “The more you invest in the front side, the more you deliver on the back side; and you all know this.”
He says recently highlighted issues concerning antibiotics and beta-agonists are a consumer concern that creates a communication challenge.
“Antibiotics, growth hormones, beta-agonists, they’re all the same in the consumer’s mind. And science will never overrule emotion. Once emotion has kicked in, no amount of scientific data you throw at them will convince them of something different. They’ll just think you’re trying to convince them because you’re hiding something.” Fields says finely textured beef is a good example of that. “It’s important to be proactive, not reactive. We need to partner on that positive message.”
He says as a company, Sam’s is trying to understand all the issues. “We don’t want to force the industry into a decision that might not be right for them.”
“We’re dedicated to quality because that’s what the consumer wants,” adds Fields. “They’re going to go where the value and volume is. We’re not going to tell you how to grow it. Just give me something that’s going to eat good and deliver the eating experience they expect.”