Beef Central had the chance to ‘walk the floor’ in Woolworths’ new flagship Indooroopilly (Brisbane) store recently with national general manager, supermarket operations, Pat McEntee.
While the interview will be used for an upcoming article on emerging trends in supermarket retailing in Australia, we also squeezed in a few questions about Woolworths’ move into a PCAS-backed pasturefed beef offer (see this morning’s companion story, “New era for grassfed beef as Woolies introduces PCAS-certified offer.”)
Presented below, in Q & A form, are Pat McEntee’s views on the company’s new PCAS beef offer:
Q: Why the move by Woolworths into a PCAS-backed pasturefed beef offer?
A: The introduction of pasturefed is about giving customers what they want, in terms of options, but also providing different tiers of product quality and brand provenance. Today’s customers are after lots of different things. The want convenience, but they also want choice.
Q: How big can the certified pasturefed beef category become for Woolworths fresh meat offer?
A: We are confident it will grow into a very significant niche within our broader beef category. It will be treated very much as a broad, mainstream product – particularly once we can guarantee surety of supply. Like a lot of these things, there’s one person that’s more important than me, our staff or our suppliers, and that’s the customer. Our customer will tell us how large our pasturefed beef offer needs to be; and whether the quality and price is right. From there we will respond accordingly. Anything new we can introduce gives us that extra bit of excitement as a retailer, and is great for the customer, as well as our in-store teams, in creating a talking-point with customers.
Q: Woolworths’ beef offer is all about consistency, day-in, day-out. Does pasturefed beef, with its consequent links with seasonal variation, concern you for that reason?
A: Having a grain-finishing program certainly helps deliver consistency with our everyday beef offer. We’ve spent a couple of decades developing that side of our business, and are very proud of our tender, well-aged, young beef that consumers are looking for. The grassfed offer may give us a few challenges from time to time, but remember that it is being sourced, through Teys, out of abattoirs with enormous geographic spread, from Central Queensland all the way to South Australia. We’re confident that will even-out any peaks and troughs. It’s all about dealing with the right people, and building the right relationships, with backgrounders and suppliers along the chain that can produce the right sort of product for us.”
Q: Will HGP-freedom, which Teys chooses to include in its PCAS process, be part of the grassfed brand message in Woolworths?
A: It will be clearly identified. From our perspective, it gives our customers choice, and the range of beef products they would like to buy. We have enough customers telling us they are looking for different types of product, whether it be organic, pasturefed, HGP-free or whatever – and it’s our job to make sure we have those products available.
Q: How important was it for Woolworths to source its grassfed branded product from a third-party certified source like PCAS?
A: We think there’s a lot of credibility in third-party endorsement, and it’s import to our customers. It’s always good to work with industry, and make sure we are using the type of endorsements and certifications that help underpin our brands, and give our customers greater confidence.
Q: Can you yet predict whether the new ‘natural’ pasturefed no-HGP offer will cannibalise business from Woolworths’ existing Certified Organic beef offer, or from its conventional beef range?
A: It will be a bit of both, as well as growing the beef segment overall. Some customers that previously bought only organic will be comfortable with pasturefed/no-HGP that ticks most of the boxes that organic does, but at a lower price. Others will choose to ‘step-up’ from conventional beef, for health, environment or other reasons. Using our experience in chicken as an example, when we started with Organic as well as conventional, the price gap was quite significant. When we started our Macro free-range poultry offer (somewhere in the middle, price wise) we found that some customers wanted to ‘eat healthier’ or had a ‘social conscience’, for themselves and/or their family. A lot of those people were prepared to pay that slight premium over conventional for Macro chicken. We certainly saw people ‘trading up’ out of conventional poultry into Macro, because they saw it as better for them, and better for the environment and the animal. But at the same time, a number of former Organic chicken customers were happy to shift into the Macro free range space. It’s about sustainability and responsibility, and we all have a responsibility to make the world a better place for those that come after us.”