MeatingPlace - April 9, 2009
"Laura's Lean sales defy gravity in current economy"
By Rita Jane Gabbett
At a time when many more expensive meats are taking it on the chin as consumers shop price, Laura's Lean is nearing record sales with beef products that are pricier than Choice.
Even while other natural meat product makers acknowledge reduced demand, Laura's Lean Chairman John Tobe says he is selling all he can make of his natural line of lean beef products.
What gives? Meatingplace sat down with Tobe to find out.
We are hearing from other natural beef processors that demand is soft. How is that playing out for Laura's Lean?
Our price is higher than Angus, Choice, anything. But last year we were up 8 percent. This year we are up about 5 percent year to date. For two weeks in March we were up double digits and we almost hit a record.
How are you doing that?
Most of it is probably because we are branded. Consequently, we are able to promote our product line with people we know will be responsive to our product. We did Weight Watchers last year and that, coupled with an ad in Martha Stewart magazine, gave us the 8 percent increase.
What was the partnership with Weight Watchers?
Our product meets their guidelines, so we signed up to get onto their Web site with a link to ours. The thing we learned was that with Weight Watchers, every two weeks you get a new audience. We signed up to do this for 90 days then we saw the meter go back down when we stopped. When we went back to it, the meter went up again.
What else is driving sales?
We got the Good Housekeeping Seal of Approval for all of our lines. It is amazing how much clout that has in homes. They have a circulation of around 4.5 million, but most of those go to doctors' offices, so about 55 million people read them every month. So we are now able to demonstrate to retailers that we can bring high-end customers into their stores who buy full-value items. There are not very many people in the red meat industry that can do this, because they are not branded.
What is your target demographic?
Our biggest demographic is the baby boomer who is college-educated with an income over $65,000 a year. They have disposable income and they have opted for a healthy lifestyle. They are college-educated. They know fat is bad and they read nutritional information. The next target is young people raising their families.
What new products are you focusing on these days?
We are looking at pre-marinated products. The first entrée will go into SuperTarget in May. It will be marinated flank steak. You take it home, throw it on the grill. We are also taking the cap off of our sirloin and are going to try that as a marinated item. We call it a petite sirloin and are looking to roll it out sometime before the summer grilling season.
Pre-cooked items have also seen a decline in this economy. How are yours doing?
We have three pre-cooked items — meatloaf, pot roast and shredded beef BBQ. Our demographics can afford it and because they are convenient, people will still buy it. We have not seen any dip. We are experimenting with a pre-cooked burger for someone who wants to just zap it and serve it. Convenience is our big thrust.
Is the biggest driver for your products the fact that they are lean or the fact that they are natural?
It's both. When we do focus groups they recognize the natural aspect, but they will also say it doesn't help a whole lot if it's natural, but it has a lot of saturated fat.
What is your annual production?
We fabricate about 75,000 head last year. We'll do about 85,000 this year.
What is your biggest-selling product?
Our grinds are, as far as tonnage. Steaks come close on price.
You were at $150 million in sales last year. What are you expecting to do this year?
I think we will be up 5 to 10 percent above last year.
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