Dive Brief:
- Walmart is now offering Angus beef in all U.S. stores at no extra cost to consumers, according to Bloomberg.The nation’s biggest grocer has been working with meat giants including Tyson Foods and Cargill for more than a year to secure supply of Angus steaks and roasts.
- The higher-grade meats have been in Walmart stores since March, but the retailer has yet to officially announce or advertise the change. Walmart is calling its beef "Verified Angus" because "Certified Angus Beef" is a brand name owned by a cattle ranch cooperative.
- Walmart Senior Vice President Jason Nichols said that Angus beef, which has become synonymous with quality for many consumers, "delivers the eating experience that customers are looking for."
Dive Insight:
Grocery industry disruption — fueled by an upswing in online grocery shopping, rapid expansion by discounters Aldi and Lidl, and the pending Amazon/Whole Foods deal — is forcing retailers to up the ante. Among other things, this means offering better quality products, more competitive pricing and improved customer experiences.
High-quality fresh foods, including meat and produce, have long determined the stores consumers choose to shop at. Combine better quality with competitive prices — as Walmart has done by offering Angus beef for the same cost it had previously priced lesser quality beef — and grocers should have a wining strategy.
Walmart has been gradually improving both its produce and meat products. Originally offering primarily the lowest grade of Select beef throughout its stores, in 2011, the retailer upgraded to carry a blend of Select and Choice, the mid-grade classification. According to Bloomberg, this change took 18 months because suppliers had to shift stocks from other retailers. But the move paid off — Walmart saw market share increase by 4 percentage points.
Now in its latest meat move, Walmart will keep pushing its productivity loop — working with suppliers to wring costs from the supply chain — in order to offer lower prices to consumers. The end goal again is to grab more market share in the meat department. Walmart’s Senior Vice President of Meat, Seafood and Quality Control Scott Neal told Bloomberg, “Beef is an absolute opportunity for us in terms of where we can grow. Our market share is not where we want it to be relative to the rest of the store.”
What’s odd is that Walmart has kept pretty quiet about its transition to Angus beef. This could be be because the retailer needs time to ensure its supply chain is in order before moving forward. It’s also likely that Walmart has been busy gauging consumer reactions to the product, as well as monitoring sales and market share performance of the higher-grade meat. There are also competitive considerations — Walmart may have wanted to lay low while ironing out the kinks to prevent competitors from countering with their own moves.
But with the cat — or cattle — now out of the bag, Walmart now will likely begin promoting its Angus beef in force.