Outside entities have always impacted your pork operation, but in recent years, retailers have played a bigger role. One retailer in particular is changing the complexion of the meat complex, and that includes your operation. It should surprise no one that the retailer is Wal-Mart Stores.
Wal-Mart's volume will get any supplier to sit up and take notice, but with it comes a whole list of demands. If a supplier wants in, it has to play by Wal-Marts rules. When it comes to the meat case, that means case-ready product.
Wal-Mart is often sited as a primary driver in the movement toward case-ready meat products. The retail giant is demanding case-ready meat for its stocking ease and quality assurance, and it has forced other retailers into the same game plan. "Case-ready meat is simply becoming the best way to deliver quality at an everyday low price for our customers," said Lee Scott, president and CEO of Wal-Mart Stores last March.
Wal-Mart Spokesman Rob Phillips adds that Wal-Mart is working to put case-ready meats in more of its stores “just as quickly as we can. Case-ready meat is a priority for us," he notes.
This case-ready movement, and the desire to supply Wal-Mart and other consolidating grocery retailers, is one reason why Tyson Foods and Smithfield Foods got into a bidding war for IBP. A meat supplier has to be big enough to supply these growing retailers. Also, by offering several meat products, a supplier becomes an attractive one-stop-shop for retailers.
Of course, the demands that the Wal-Marts of the world place on their meat suppliers will trickle down to the farm, as meat packers/processors put specific demands on their supply – animals.
It doesn't look like the pressure will let up. Wal-Mart is setting up to be the United States' No. 1 food retailer in the near future. In January, the Bentonville, Ark.-based company opened 42 stores, including Wal-Mart discount stores, Supercenters and Neighborhood Markets from Connecticut to California, along with four Sam's Clubs Stores. More than half of these carry meat and poultry, with case-ready products constantly expanding, according to a report by The meatingplace.com.
“Of these new stores, 20 Supercenters, one Neighborhood Market and four Sam's Clubs will all carry meat and poultry products,” says Phillips. Meat and poultry products are important to Wal-Mart, he adds.
"One of the things we're focusing on in our expansion plans for this year is dramatically increasing the number of Supercenters we open, with food being a major growth vehicle for us," says Phillips.
Wal-Mart now has more than 2,600 discount stores, Supercenters and Neighborhood Markets, and more than 470 Sam's Clubs in the United States. The company operates more than 1,060 units internationally.
In fiscal 2001 [beginning Feb. 1], Wal-Mart plans to open about 40 new discount stores, 170 to 180 Supercenters, 15 to 20 Neighborhood Markets and 40 to 50 Sam's Clubs. Internationally, Wal-Mart plans to open 100 to 110 units.