Hormel adds beef line to prepared meat menu

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Hormel Foods Corp. is about to heat up the fresh meat section of the supermarket.

The marketer will add fully cooked, ready-to-heat items to its line of Always Tender marinated pork-and spend $10 million to advertise the products, an amount unprecedented in a commodity category such as branded fresh meats.

Hormel introduced Always Tender two years ago as a way to market higher-margin pork products. Beginning next year, Always Tender will add beef items.


The previous tagline for Always Tender, "Pork you can cut with a fork," likely will change to reflect the brand's extension of "the promise of an enjoyable consumer eating experience" to other meat varieties, said Todd Hansen, product manager for the Fully Cooked line at Hormel.

Although he declined to give an exact budget, Mr. Hansen said spending "will be a large percentage of [Hormel's] budget because it's a key initiative."

Hormel President Joel Johnson has fostered the increase in consumer advertising, including the Always Tender campaign via BBDO Worldwide, Minneapolis, that started in September 1998, the first-ever media for a branded pork. The processor's move beyond flavored pork cuts into fully cooked products is a response to a whopping 34% growth in the convenience section of the fresh meat case last year, Mr. Hansen said.


National players in the category include General Mills, which in January purchased Lloyd's Barbeque Co., producer of refrigerated ready-to-heat barbecued meats, and Tyson Foods, which markets its ready-to-heat home meal replacement items under the Mallard's Cooking Made Easy name. Regional meat processors have also figured prominently in driving the category with fast center-of-the-plate items.

The new Always Tender Fully Cooked Entrees, including beef tips with gravy, beef roast, pork roast and meat loaf, will go head-to-head with the Lloyd's barbecued pork, chicken and beef, priced at $5.99 or more-as well as Tyson's new beef stroganoff, chicken alfredo, pepper steak and lemon chicken in microwaveable tubs, carrying suggested retail prices of $2.99 and up.

Tyson has sought to move beyond the commoditized raw meats category by building a repertoire of value-added products. Mallard's, which Tyson acquired in 1997, has not gained the retail growth the chicken producer had hoped.


Tyson responded by canceling initial plans to put $5 million to $10 million in advertising against the line and even put the brand on the block three months ago-though it recently decided to keep it, said an executive close to the company.

Marketers competing in the convenient-meals arena face intense competition from frozen foods, which have experienced a resurgence with higher-quality products such as Nestle's Skillet Sensations, Dean Foods' Birds Eye Voila! and ConAgra's Marie Callender's Skillet Meals.

But, said Prudential Securities analyst John McMillin, "people want the convenience of frozen and the health attributes of fresh."

Mr. McMillin points to Hormel's success in creating a whole new category with the introduction of Always Tender, and sees opportunity with the new items.

"The further you go on the convenience end, the higher the margins because people are looking for new, easier ways to cook meat," he said.

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