John Story worked his entire 42-year career in the retail and wholesale meat industry. For 18 years, he was senior director of meat and deli operations for Fairway Foods. Today, he is a retail meat industry consultant, living in Ocala, Fla.

Q How do retail grocers price meat products?

A Retailers price products based on two factors. First is the consumer; second is the competitor, and what it will allow the retailer to charge and sell in volume.

Retailers often make pricing decisions by the seat of their pants. They conduct tests on different cuts to establish yields to determine which ones to feature and what they can charge.

Q What factors affect how or when grocers change their price on a product?

A The wholesale cost influences this, and that can change daily or weekly in fresh pork products. Retailers don’t make any changes in prices unless the wholesale price has reached a certain high or low level.

Q What causes a grocer to “feature” a product?

A Featuring comes into play if there’s a surplus supply of a product or if there are promotional allowances or advertising incentives. This revolves around the advertisements. Every week the meat manager needs to produce a spectacular ad to bring consumers into the store. Consumers will be shopping for other items, but the ads bring them to the meat case.

Q Can you explain about farm-to-retail pricing, particularly the difference between what a pork producer makes vs. what consumers pay?

A There’s no relationship between the two because of the time lag involved. That’s not the way the current marketing cycle works. The length of the supply chain is too long to bring back a specific product.

Producers should know all of their production costs and work to produce a uniform product. It’s essential for producers to learn something about the five basic cuts of pork. Retailers are getting more sophisticated and are using projection systems to determine demand. It could take a month or two before price changes are reflected on a retail basis.

If an industry relays information about a surplus to retailers, they’ll plan ahead to feature the product, but this process is done about eight weeks in advance. Retailers aren’t likely to change their plans later in the game unless there are some major incentives tied to it.

Q How important is price to the consumer? How has this changed?

A Price is always important to consumers, because it’s part of determining the value of a product.

Price and consumers’ usage values have changed a lot over the years. Consumers have become more sophisticated. For instance, pork chops could cost $4.49 a pound. But if those chops can be cooked in just a few minutes and remain of high quality, then it may be worth the extra cost to save time and still prepare a nice meal.

Q In the future, what will consumers expect from pork, and what is the best way for producers to deliver this?

A There are three things consumers will respond to:

1. Convenience, can I use it quickly or will it take a lot of time? We’re seeing more impact with precooked, boneless and marinated products.

2. Cooking and precooking. Provide appropriate products, and if consumers get more educated about pork, they will use it. This goes back to the price/value relationship.



3. Sterile. Use irradiation or some type of procedure to ensure food safety.

Producers need to get involved in marketing the end product. Find out what consumers want and help increase demand for branded products. You’re putting money into the checkoff, so use that consumer information and use it wisely.

Q What can producers do to improve their opportunities to profit from their products?

A Pork producers need to produce better products more consistently. There is still a high enough percentage of pork products that fall below a certain standard.

Also, producers need to even out the production cycle. Be more aware of the time lag of moving from a short product supply to a surplus and how it affects the consumer and product movement. The retailer may not be aware of or be able to use surpluses as quickly as they show up on the market.

Producers need to demand more specific data from their packers; and they need to receive higher payments on good products but bigger discounts on poor products.