Dennis DiPietre is an agricultural economics consultant, with assignments at the University of Minnesota and North Carolina State University. Based in Columbia, Mo., he has expertise in product marketing, food systems strategies and agricultural value-added ventures.

Q: What are the driving forces behind strategic changes in marketing meat to consumers?
A: Food marketing to U.S. consumers is evolving rapidly along two fronts: innovation and efficiency. Factors driving innovation include serving the U.S. population's changing ethnic mix, and the growing demand for foods with intense flavor, premium quality, high nutrition, as well as safety and environmental assurances. This has led to a proliferation of niches and branded food items targeting various groups of consumers.

Niches are targeted not only with different food offerings, but also with varying store formats. Those include limited assortment stores, supercenters (those that sell food, drugs and mass merchandise), superstores (food only), wholesale clubs and warehouse formats. Many food companies have stores representing all of these formats in different target locations.

Q: What are some of these marketing strategies?
A: While the richness of product offerings and store formats has increased, the demands to deliver products in a cost-effective manner have driven scale into every part of the food chain.

As a demonstration of the U.S. food chain's remarkable ability to deliver on cost and innovation, the U.S. consumer now spends little more than 10 percent of his or her disposable income on food. The mix of consumption is still weighted toward food consumed at home, 6.2 percent, while food consumed away from home accounts for 4.2 percent of disposable income.

Staying ahead of innovation is costly and difficult. Companies test thousands of new products each year and spend millions of dollars in consulting expenses for focus groups, scanner-data analysis and third-party surveys. A survey by the Food Marketing Institute revealed that taste and flavor are still king in determining selection at the supermarket. Major drivers of supermarket purchases are (in order of importance): taste/flavor, nutrition, health and safety issues, price/value and storability/shelf-life.

Driven by rising incomes and a history-making growth in economic output, the U.S. consumer is more demanding of product quality, and more willing to pay for combinations of products and services.

Q: What impact has this had on the pork chain, specifically producers?
A: One of the key issues facing the pork production segment is where the commodity/value added transformation takes place. Traditionally, raw agricultural products were produced as commodities with most of the value being added and product differentiation occurring at the processing level.

But, as demand attributes that consumers are willing to pay for become more varied and complex it seems likely that more product differentiation will be required at the production level. This could include such things as certified production systems, specialized genetics and feeding systems. Product attributes such as lean meat color, or natural, organic and humane animal rearing systems cannot be "added" to a commodity at the processing level. Therefore they provide the opportunity for segregated production schemes designed to add value and thereby enhance a producer's potential profits.

Q: How are large retail chains, such as Wal-Mart, impacting these food-chain changes?
A: The emergence of mass merchandisers such as Wal-Mart and K-Mart into food retailing is changing marketing strategies and increasing the drive toward efficiency. These firms bring a focus on coordinated sales forecasting and replenishment. This is a mass merchandising philosophy that's being applied to the food chain.

These companies focus on "everyday low prices" and tend to shun more traditional retail sales approaches such as loss leaders and periodic low-price sales as a way to build market share.

Providing suppliers with sales data and forcing the inventory costs down, has created a scramble within the food chain to better organize the production and distribution flow all the way back to the raw product.

These trends assure that the real, long-term winner in the race for food marketing innovation and efficiency will be the consumer.