Fresh meat has historically been a commodity business — all about selling USDA-graded products with price and promotions — but new players with a different vision are coming to town. Players like Lenny Lebovich, the founder and CEO of PRE Brands, are bringing to market a new branded line of 100% grass-fed steaks and ground beef. PRE-branded beef products are currently being sold through several supermarkets and regional Walmart Supercenters. Sure, grass-fed beef has been around for a while, but I offer up that the whole go-to-market approach of PRE offers “creative disruption” for the mainline supermarket meat department.
Chicago-based PRE is quite intentional: First, company officials learn what consumers want (and don’t want) from their meat, and then they give it to them, with a focus on continuously improving that process. It's a deliberately customer-centric model, and I am intrigued by the solutions they are bringing to market. It signals a new vision for both the production and distribution of beef.
PRE is run by a group of experienced professionals who come from various backgrounds but share a common passion for a “better for you” beef product — and they love to share what they’ve learned. See their 15-point Obsessive Pick process, and check out the FAQ on their website. I bet you’ll learn something about CLAs or why their beef is a purple-red color — and even if you don’t, some of your customers will.
PRE also deserves recognition for its multiprong approach to continuously driving sales. The products are branded and packaged to appeal to many consumers’ desire for transparency around their beef, but the PRE team also provides retailers with merchandising guidance to maximize sales. Since all PRE products carry a standard UPC, not a variable weight code, “It’s easier to track and benchmark performance, which is one of the things that makes it easier to continuously learn and improve,” explains Lebovich. A lot of that learning comes from the merchandising field force of PRE that’s equipped with technology to gather continuous feedback from customers and store employees.
Talk to any entrepreneur who has had to sell their new products into retailers — it’s a learning process on both sides. PRE took the time to build a base of experience that positions it to drive significant growth in a traditional commodity-driven department.
• To develop their feel for the mainstream grocer, PRE officials initially distributed through Central Grocers and sold through several progressive independent retailers in Chicago (Treasure Island and Caputo’s).
• To strengthen their ability to work in a chain environment, they then expanded across the Chicago market with Mariano’s.
• Now they are in multiple states with Giant Eagle and in a region of Walmart. The goal is to sell in the top 20 U.S. retailers.
The company expects to expand into several more of those retailers in the first quarter 2016, as others see how consumers respond to PRE beef.
Beyond their focus on continuous improvement, PRE is also disrupting the market by pointing out and solving a dilemma for mainline retailers — all of whom have premium meat customers who are looking for better-tasting meat and are willing to pay for it. The dilemma is premium shoppers are only a minority of the retailer’s customers, but they are responsible for a majority of the retailer’s sales.
• To serve both segments (premium and regular), retailers need a two-tiered strategy.
• PRE helps retailers manage through this by giving them a clearly defined and differently priced line of products to serve their premium customers, while continuing to serve the majority of customers with a traditional line of meat.
This is the kind of “creative disruption” that mainline supermarkets need to compete in today’s world where consumer tastes and preferences are involving.
