Marketing Frozen Broilers

Transcription

1 University f Tennessee, Knxville Trace: Tennessee Research and Creative Exchange Bulletins AgResearch Marketing Frzen Brilers B. D. Raskpf University f Tennessee Agricultural Experiment Statin Fllw this and additinal wrks at: Part f the Agriculture Cmmns Recmmended Citatin Raskpf, B. D. and University f Tennessee Agricultural Experiment Statin, "Marketing Frzen Brilers" (1961). Bulletins. The publicatins in this cllectin represent the histrical publishing recrd f the UT Agricultural Experiment Statin and d nt necessarily reflect current scientific knwledge r recmmendatins. Current infrmatin abut UT Ag Research can be fund at the UT Ag Research website. This Bulletin is brught t yu fr free and pen access by the AgResearch at Trace: Tennessee Research and Creative Exchange. It has been accepted fr inclusin in Bulletins by an authrized administratr f Trace: Tennessee Research and Creative Exchange. Fr mre infrmatin, please cntact trace@utk.edu.

2 Mrketing {i'="r r ~..,.t! - 1""1 Frzen Brile~. IN TENNESSEE RETAIL GROCERY STORES B. D. Raskpf Bulletin 331 August, 1961 The University f Tennessee Agricultural Experiment Statin Jhn A. Ewing. Directr Knxville

3 ACKNOWLEDGMENT Acknwledgment is due the managers f the 266 retail fd stres in Tennessee wh cperated in furnishing the data basic t this study. Appreciatin als is expressed t the members f the Technical Cmmittee f the Suthern Reginal Pultry and Egg Marketing Prject SM-15 (Revised) fr their suggestins in the planning f the study.

4 SUMMARY The main bjective f this study was t determine the market ptential fr frzen brilers. Schedules were btained in 1960 frm 266 retail grcery stres lcated in the 95 cunties in Tennessee. Sme data were available frm anther study made in Tennessee in 1955 f 275 grcery stres. Ttal vlume f frzen brilers-whle, cut-up and parts, sld per sample stre-increased frm an average f 135 punds in 1955 t nearly 3,200 punds in All grcery stres in Tennessee sld an estimated 24.2 millin punds f frzen brilers, whle, cut-up, and parts in These sales amunted t abut 6 punds per capita. In additin, all grcery stres in the State in 1960 sld an estimated 4.5 millin punds f chicken in frzen pies and dinners. Hwever, frzen brilers in different frms were nt available t all grcery stre custmers. Of 266 stres, nly 1 f 14 handled frzen whle brilers, 1 f 7 frzen cut-up, 6 f 10 frzen parts, 7 f 10 frzen chicken dinners, and 8 f 10 frzen chicken pies. Of all stres, 3 f 10 did nt handle any frzen brilers in frms f whle, cut-up, r parts. An imprtant drawback t the increased sale f frzen brilers has been the differential in price between frzen and fresh birds arising frm such added csts as these: additinal labr in cutting and packaging, package material, freezing, plant verhead, strage, delivery, and advertising. In this study it was fund that the higher price paid by retailers fr frzen brilers was partly ffset by the csts f cnverting fresh, whle, ice-chilled brilers t the frms f cut-up and parts. Abut 75 percent f the fresh brilers purchased by 266 stres were prcessed and sld as fresh cut-up r parts. The cst per pund fr cutting and packaging averaged 5.4 cents per pund. The prices received by retailers fr fresh and frzen brilers varied widely amng stres. The price fr frzen livers and breasts averaged lwer than fr fresh livers and breasts. Amng all stres the cmbined weighted average price per pund f 10 frms f frzen brilers was abut 6 cents higher than that fr fresh brilers. In evaluating the merchandising practices f 185 stres handling frzen brilers, many factrs were fund t be assciated with high annual vlume f frzen brilers (whle, cut-up, and parts) sld per stre. A statistical summary f these relatinships is shwn in Appendix D. Stres selling the mst frzen brilers per stre usually were the larger nes, members f chains r vlunteer grups, and lcated in the larger cities. Hwever, the pera-

5 trs f stres selling the greatest vlume per firm, regardless f stre size, type r lcatin, generally reprted the fllwing merchandising practices r cnditins: 1) Sales f bth fresh and frzen brilers f several different frms 2) Lwer price mark-up n frzen than fresh brilers 3) Advertising f frzen brilers frequently and by several different media 4) Display f frzen brilers in self-service cases 5) Display f frzen befre fresh brilers t custmers in the usual flw f shpper traffic in the stre 6) High annual sales f frzen brilers per square ft f display space 7) Hlding brilers in display cases at zer r belw zer temperature 8) Display case turnver f brilers n sale in less than 10 days 9) Several advantages f selling frzen ver fresh brilers The imprtant advantages f selling frzen ver fresh brilers were less labr required; frzen brilers can be held lnger withut fear f spilage; develpment f a market fr brilers as a means f leveling ut the supply situatin; being able t meet cmpetitin frm ther stres; and cnvience in handling. The main reasns fr stres nt selling mre frzen brilers r disadvantages in handling them were that custmers generally preferred fresh-chilled birds; slw turnver; lack f advertising; lack f equipment r space; and the price differential between frzen and fresh brilers. These reasns are widely discussed in this reprt. Retailers suggested sme ways f vercming the difficulties invlved in imprving the merchandising f frzen brilers at the retail level and in vercming cnsumer skepticism relating t the quality f frzen bilers. They are: 1) Advertising frzen brilers as "fresh frzen" and advertising frequently in newspapers, ver radi and TV 2) Hlding frzen brilers in stre display cases at zer r belw zer degree temperature t preserve prduct quality 3) Develping a type f frzen pack which wuld enable the stre custmer t bserve the general appearance f the chicken befre purchase 4) Industry spnsring f educatinal prgrams designed t familiarize the cnsumer with the characteristics f brilers in frzen frm.

6 SUMMARY INTRODUCTION Objectives f the Study Scpe and Prcedure CONTENTS Page AVAILABlL1TY AND SALES OF FROZEN BROILERS Trend in Sales Frm f Brilers in Relatin t Ttal Sales Seasnality f Sales Availability f Different Frms Disadvantages f Handling Frzen Brilers Custmers Generally Prefer Fresh Over Frzen Brilers Mre Advertising Needed Slw Turnver Mre Equipment r Space Required Price and Other Reasns Advantages f Selling Frzen Brilers Less Labr Required Less Perishable Meeting Cmpetitin Cnvenience MERCHANDISING PRACTICES Origin f Frms f Frzen Brilers Frzen Whle, Cut-up, and Parts Frzen Chicken Pies and Dinners Prices Received and Mark-up fr Frzen Brilers Prices Received by Frms f Brilers Prices Received by Size, Type, and Lcatin f Stre Mark-up n Frzen Cmpared with Fresh Brilers Advertising Frzen Brilers Methds Frequency Displaying Frzen Brilers Methd f Display Lcatin f Display Size f Display Temperature in Frzen Briler Display Cases Time f Hlding Frzen Brilers in Display Cases APPENDIX <)

7 Marketing Frzen Brilers In Tennessee Retail Grcery Stres by B. D. Raskpf Assciate Prfessr, Agricultural Ecnmics INTRODUCTION A study made by the Tennessee Agricultural Experiment Statin in 1955 indicated cnsiderable cnsumer interest in frzen brilers. Of 3,611 families interviewed r reprting by questinnaire, 724 preferred frzen brilers, whle, cut-up, r parts. The per capita cnsumptin f all brilers fr the 724 families averaged 25.3 punds, r 0.4 punds higher than that fr 2,598 families preferring fresh cut-up brilers. The study indicated that frm f briler preference is related t such factrs as size f family, religin, ccupatin, gegraphic lcatin, methd f cking, hme strage facilities, and price, weight, quality, and availability f brilers. 1 The last fur factrs are clsely assciated with the merchandising practices f retail fd stres. A suthern reginal study f 1,011 fd stres in nn-metrplitan areas in 1955 indicated that nly 1 ut f 16 handled frzen whle brilers, 1 ut f 5 handled frzen cut-up brilers, and 1ut f 3 handled frzen briler parts.~ This study indicated the need fr further research in: 1) Determining the underlying reasns why mre stres d nt sell brilers in frzen frm, and 2) evaluating the merchandising practices f stres that handle frzen brilers in varius frms. Objectives f the Study The brad purpse f the study was t determine the market ptential fr frzen brilers. Specific bjectives were: 1) T determine the availability and factrs assciated with availability and sales f frzen brilers in grcery stres; 2) t determine retail prices f frzen and fresh brilers in varius frms; and 3) t 1 Raskpf, B. D., Factrs Affecting Pcr CajJi/a CnsurnjJlin f Brilf'Ts in Tcnnessee, TCIlIH'S'iee AgrkulturaI Experiment Statin Bulletin N p. 28, Aug-ust, :) J'vfarkeling Pultry,"\feats in Relail Fnd Stres in XOrl-,\(elrjJli/{/!/."lrea,\' r 'h" Suth, SOllthern Cppcratiyc Series HlIlIctin N. 7~,.Tunc,

8 evaluate sme f the imprtant merchandising practices 10 the handling f frzen brilers in grcery stres. Scpe and Prcedure Schedules f infrmatin and persnal interviews were btained at 266 retail grcery stres in Tennessee during the mnths f June t September, The estimated 7,566 grcery stres in the State were gruped as t the number f stres by size f incrprated r unincrprated places, twns, and citiesy The rate f sampling was abut 3.5%. The sample was stratified by cunty as well as by size f city r place, and by type and size f stre. Fr tabulatin and analysis purpses, the stres were gruped accrding t size f stre, type f stre, and size f city. Abut 640/0 f the stres, r 170, were classified as small, having an annual vlume f business per stre under $250,000; 77 stres were f medium size with annual sales ranging frm $250,000 t $749,000; and 19 stres were large with annual vlumes f business f $750,000 t $1,250,000. Of the 23 sample stres lcated in places under 1,000 ppulatin, 1000/0 were classified as small; f 96 stres in twns 1,000 t 4,999 ppulatin, 79% were small, 19% mediumsize, and 2% large; f 73 stres in cities 5,000 t 24,999 ppulatin, 480/0 were small, 41% medium size, and 11% large; f 74 stres in cities 25,000 ppulatin and ver, 40% were small, 30% mediumsize, and 30% large. In the sample f 266 stres, 137 were members f a chain r vluntary grup and 129 independently perated. Of the chain stres, 39% were classified small, 48% medium size, and 13% large. Abut 90% f the independent stres were classified as small, 80/0 medium size, and 2% large. At least ne stre in each cunty was included in the study, althugh a few cunties averaged less than 28 stres, r less than the 3.50/0 sampling rate. As indicated in Figure 1, the stres included in the study were distributed thrughut the State. In cnnectin with the survey f retail grcery stres, a study was als made f 847 stre custmers wh cnsumed r did nt cnsume frzen brilers. The bjectives f these interviews were t determine why many cnsumers never have bught frzen brilers; t find ut why sme prefer brilers in frzen frm; t see why wme are dissatisfied with brilers in frzen frm; and t :'l Site 01 {':.y was based n the If)!'iO Census f Ppulatin and re\ised accrding t preliminary l!wo CCIlSII~ data. Numher f stres,vas hased n data ;l\"ailable frm the ]958 Census f Business, Retail Trade :\rca Statistic.., s(lpp!rill'cntcd \vith 10GO data frm cit\' directries and cunty curt huse Tf'crds. 7

9 Figure. I. Lcatin f 266 grcery stres included in the survey, by cunties, Tennessee, 1960.

10 learn abut the influence f varius factrs related t the per capita cnsumptin f frzen brilers. The results f this study will be published later. In this study the term "briler" generally refers t a yung chicken (usually under 16 weeks f age) f either sex, that is tender-meated with sft, pliable, smth-textured skin, and that has a flexible breastbne cartilage. AVAILABILITY AND SALES OF FROZEN BROILERS Trend in Sales A survey f 275 retail fd stres in Tennessee in 1955 indicated that nly a small vlume f brilers was sld in frzen frm. In that year 8,246 grcery stres in the State sld an estimated 1.1 millin punds f frzen brilers, r an average f nly 135 punds per stre. By 1960, the sales f frzen brilers, whle, cutup, and parts, had increased t an average f nearly 3,200 punds per stre (Table 1). Althugh the number f grcery stres declined since 1955, in ,566 stres sld an estimated 24.2 millin punds f frzen brilers, whle, cut-up, and parts. The cnsumptin f frzen brilers purchased at retail grcery stres in Tennessee in 1960 is estimated at 6 punds per capita. Table I. Vlume f Different Frms f Frzen Brilers Sld Annually by a Sample f Grcery Stres, Tennessee, 1955 and N. It~;;;------I 1955 (a) I 1960 f stres in~luded in survey S---I----:c Frzen brilers sld per stre: Parts Cut-up Whle ---rtal Frzen chicken pies sld per stre (b) Frzen chicken dinners sld per stre (b) ' /35 N data N data Punds f briler 2, ,194 1, (a) Fr surce f J955 data sec Factrs A!ff'rtillg Per Ca/Jila Cnsumj)tin f Rrilprs in Tl'llrll'Ss', '!'CtllH''iS('C :\gticultural Experiment Statin Bulletin ~(). 228, p. 7. August, (h) F10Il'll chickcll pies cntained an average f 14S/~ chicken and frzen chicken dinners an ;I\('rag'c f 4:J('~ chicken. The amunt f briler Illeat in 1'1'01(-11chicken pies and dinners culd nt an:uralclv be determined. Thrughut the Tcprt the data and statements pertaining t frzen chicken pic" 31H1 dinners I'eft-I" 10 the ltal weight f entire pies r dinners and nt t the chicken Illt'at (lltenl. There has been cnsiderable interest in recent years in selling brilers and ther fwl in frzen chicken pies and dinners. The 266 stres in 1960 reprted average sales per stre f 3,290 eightunce chicken pies and 1,212 eleven-unce chicken dinners. Based 9

11 n this survey, all grcery stres in the State sld an estimated 4.5 millin punds f chicken in frzen pies and dinners in 1%0. Frm f Brilers in Relatin t Ttal Sales The 266 stres were gruped accrding t different cmbinatins f frzen and fresh brilers handled. Stres that sld the highest vlume f brilers per stre sld tw r mre frms f bth fresh and frzen brilers. Stres selling sme frms f frzen brilers, but n fresh brilers, averaged selling between 100 t 1,600 punds annually per stre. Thse selling sme frms f fresh brilers, but nne frzen, averaged selling 24,100 punds annually per stre. Thse selling bth frzen and fresh brilers in several different frms averaged frm 35,200 t 91,300 punds per stre, varying accrding t the cmbinatins f frms f brilers sld (APPENDIX A). Cnsiderable relatinship existed between the ttal annual sales per stre f all frms f fresh and frzen brilers, including chicken pies and dinners, and the number f different frms f brilers sld. Annual sales per stre ranged frm 14,400 punds fr 55 stres selling frm 1 t 3 frms t 109,900 punds fr 91 stres handling six r mre frms. In additin t being related t ttal sales f all brilers, the number f frms f frzen brilers ffered fr sale was assciated with increased sales per stre f frzen brilers. Fr 152 stres selling nly ne frm f frzen brilers, whle, cut-up, r parts, the annual sales per stre f frzen brilers averaged 4,300 punds; fr 32 stres selling tw frms, the sales per stre f frzen brilers averaged 5,600 punds. Only 1 stre sld three frms f frzen brilers, whle, cut-up, and parts, with annual frzen briler sales f 21,700 punds. Seasnality f Sales Of the 185 grcery stres handling ne r mre frms f frzen brilers, 60% shwed little seasnal difference in briler sales, 260/0 sld prprtinally mre during the summer, and 140/0 sld mre during the winter, spring, r fall. N apparent relatinship existed between seasnality f briler sales and size and type f stre and size f city in which the stre was lcated. The large grups f stres reprting little seasnal difference in frzen briler sales, and summer as the seasn f mst sales, had abut equal distributin as t size, type, and lcatin. Wide variatin existed amng the 185 stres handling different 10

12 Small frms f frzen brilers in seasnality f sales. One small independent stre, in a twn under 1,000 ppulatin, handled 21,700 punds annually f frzen brilers, parts, cut-up, and whle, and reprted summer as the seasn f greatest sales. On the ther hand, a large chain stre, in city f ver 100,000 ppulatin, handled 26,300 pund annually f frzen brilers, parts, and cutup, and sld prprtinally mre during the winter. A previus study in Tennessee indicated that seasnality f briler purchases was related t such factrs as methds f cking, meal patterns, family tastes, family incme, per capita cnsumptin f ther meats, strage facilities, and weights, price, and availability f brilers." Several f these factrs are clsely assciated with the merchandising f frzen brilers as discussed in this reprt-particularly availability and frm f brilers sld, price and price mark-up, strage facilities, and methds f advertising and display. Availability f Different Frms Frzen brilers in different frms were nt available at all grcery stres. Of the 266 stres, nly lut f 14 handled frzen whle brilers; lut f 7, frzen cut-up brilers; and 6 ut f 10, frzen briler parts (Table 2). Althugh 162 f the stres handled sme frm f frzen briler parts, many f these did nt sell all 0( Raskpf, B. n. radars _11ft'ding P(>r Cn/)ila C01/sum/)lill f Brilers in ']'clluess('c" Tennessee Agrinlltural Experimellt Statin Bulletin N. 2H8, p. 27, August, ]958. Table 2. Percent f Firms Handling Varius Frms f Frzen Brilers, and Vlume Sld By Size, Type and Lcatin f Firm, 266 Grcery Stres, Tennessee, I----rype-~tre I Stre lc.- by p~p. f city I Size f stre and n. and n.! and n.! :~;c~e~f p~::ilers, -I,- Underl~O~-- 5:~~_--2;~~0! st~l~s, and dinners 1 Frzen: Parts Cut-up Whle Pies I Dinners Med. Large I Chain Ind ver I n. : II Thusand Frzen: Parts Cut-up Whle Pies I Dinners P;':cent-~f ~tr;~ handling pund~ s~td~nnuaily per st;;;:;-handling II /

13 different kinds f parts. Fr example: 830/0 f the stres handled breasts; 64%, thighs and drumsticks; 580/0' livers; 320/0' gizzards; 130/0' wings; and 90/0' backs and necks. The prprtin f stres handling frzen parts, pies, and dinners increased as the size f the stre increased frm small t large. Hwever, a higher prprtin f the small stres handled frzen cut-up brilers. Cmpared with small stres that handled frzen brilers, large stres sld an annual average f 16 times mre frzen parts per stre, 7 times mre frzen pies, 5 times mre frzen dinners, and 2.6 times mre frzen whle brilers. While a higher prprtin f the chain-cmpared with independent stres-handled frzen parts, pies, and dinners, smewhat less handled frzen cut-up and whle brilers. Chain stres, cmpared with independents that handled frzen brilers, sld 4 times mre frzen pies, and 2 times mre frzen parts and dinners per stre. Disadvantages f Handling Frzen Brilers In the survey f retail grcery stres, each manager was asked t give reasns, if any, fr nt handling r selling mre frzen brilers. In tabulating the reasns, the stres were divided int tw grups: 1) 81 stres where frzen brilers in the frm f whle, cut-up, r parts, were nt handled, and 2) 185 which sld frzen brilers in ne r mre f the abve frms. The managers f each f the stres gave ne r mre reasns. As indicated in Table 3, cnsiderable variatin existed in the percentage f each reasn given by size, type, and lcatin f stre. In general, mre reasns came frm managers f the small than large stres, by independent than chain stres, and by stres lcated in the smallersize places and twns. Cnsiderable discussin is given t the majr reasns; they pint ut sme f the mre imprtant disadvantages in handling frzen brilers, and difficulties invlved in imprving the distributin f frzen brilers in retail channels. Custmers generally prefer fresh ver frzen brilers. Abut three-furths f all stre managers reprted that their custmers generally preferred fresh ver frzen brilers. The past experience f these managers indicated that when fresh-chilled and frzen brilers are displayed side-by-side, the custmers usually select the fresh-chilled bird. Mst stre peratrs believed that an imprtant factr fr cnsideratin is the cnsumer dubt as t whether frzen brilers are as high in quality as thse freshly chilled. Abut a third f the managers f 185 stres handling frzen brilers suggested ne r mre f the fllwing ways f ver- 12

14 II, C,hain Table 3. Reasns fr Stres Nt Handling r Selling Mre Frzen Brilers, by Size, Type, and Lcatin f Stre, 266 Grcery Stres, Tennessee, /960. ~,----_ ~ , Si,=-"f stre~il~~d T:~: s~:~e I Stre 10c'a:J ~:.p. f city I 'i I All 'I! Under and stres, 'I sm,a,ii M"ed. Large 'I- Ind. / ,999 ver n. _Rea~_I_----=~ 1_7~.! 4: 'Percent f stres reprting reasns fr nt handling frzen brilers (a) Custmers generally I. prefer fresh I 7/ II Slw turnver , 5/ Lack f equi pment r space I Price and ther j I reasns I II I ~~------!, I Type stre Stre lc. by pp. f city I Size f stre and n. and 1,-~;:;' n. I '~~; and n. Reasns I,smalll Med.ll,:-: " 112 I, 60 /3 I 92 I ,----,---,-----~~i Percent f stres reprting reasns fr nt selling mre frzen brilers (a) Custmers generally I prefer fresh Lack f advertising / Slw turnver Lack f equipment r space 2/ Price and ther reasns / ::; 2:~O;'I:::'. (a) Sme stre managers reprted mre th<ltl nc IT,ISOIl, therefre, the percentage in the clumns ttal mrc than 100. cming cnsumer skepticism relating t the quality f frzen brilers: 1) Displaying frzen brilers befre fresh nes t custmers in the usual flw f shpper traffic in the stre; 2) hlding frzen brilers in display cases at zer r belw zer degree temperature; 3) displaying frzen brilers in self-service cases; 4) develping a type f frzen pack which wuld enable the cnsumer t bserve the general appearance f the briler; 5) advertising frzen brilers frequently and in several different ways; and 6) spnsring educatinal prgrams designed t familiarize the cnsumer with the characteristics f brilers in frzen frm. Mre advertising needed. Abut tw-thirds f the managers f 185 stres that handled frzen brilers indicated that the lack f advertising by different methds was an imprtant reasn why 13

15 mre frzen brilers were nt sld. The data shwn in Table 6 tend t cnfirm this cnclusin. Frequency f advertising was assciated with increased annual vlume f frzen briler sales per stre. Slw turnver. Managers f 400/0 f 81 stres gave slw turnver as a reasn fr nt selling any frzen brilers. This als was listed as an imprtant reasn by 250/0 f 185 stre peratrs that were handling frzen brilers during the perid f study. In this study it was fund that display case turnver f frzen brilers averaged abut 2 weeks, but varied widely amng stres. The number f times the stck f frzen brilers in display cases was sld and replenished in a given perid f time was related t many factrs. Stres with display case turnver f brilers f less than 2 weeks, cmpared with thse having turnver ranging frm 2 t 12 weeks, generally were the larger stres. They sld bth fresh and frzen brilers in several different frms and had lwer markup n frzen than fresh brilers. They advertised frzen brilers by several media and displayed frzen brilers befre fresh nes and in self-service cases. T retard quality deteriratin, they held brilers in display cases at belw-zer degree temperature. Mre equipment r space required. Lack f display case, and lack f space in frzen fd bxes, were given as reasns fr nt selling frzen brilers by the managers f 370/0 f 81 stres which did nt handle frzen brilers in any frm. These reasns were als listed by the managers f 16% f 185 stres fr nt selling mre frzen brilers. This study revealed that althugh sme equipment is necessary in securing vlume sales f frzen pultry, the real prblem is hw t btain maximum utilizatin f existing display space thrugh better merchandising prcedures. Amng 185 stres, the annual sales f frzen brilers per square ft f display space ranged frm under 10 punds t ver 13,000 punds. The imprtant merchandising factrs assciated with increased sales f frzen brilers per square ft f display space were: 1) Attractive self-service display f high quality brilers f different frms every day thrughut the seasn; 2) lw prices f brilers in relatin t cmpeting prducts; 3) frequent advertising f frzen brilers in newspapers, radi, and TV; and 4) display f frzen brilers befre fresh nes t custmers in the usual flw f shpper traffic in the stre. The 33 stres reprting the highest average annual sales f frzen brilers per square ft f display space (1,464 punds) fllwed 3 r 4 f the abve merchandising 14

16 practices. Included in this grup were 7 small stres and 7 independently-perated stres. Price and ther reasns. Accrding t the managers f 41 stres, an imprtant drawback t sales f frzen brilers has been the higher price charged by prcessrs and whlesale distributrs fr frzen ver fresh ice-chilled brilers f different frms. This price differential averaged abut 6 cents per pund fr 10 different frms f brilers handled by 185 stres in The increased csts f prcessing and distributin f frzen ver fresh, whle, ice-chilled brilers arise frm additinal labr in cutting and packaging, package material, freezing, plant verhead, strage, delivery, and advertising. ;; Hwever, many f the stre managers indicated that the difference in price paid by retailers fr frzen brilers, cut-up and parts, ver fresh, whle, ice-chilled brilers is partly ffset by the csts f cnverting fresh whle t the frms f cut-up and parts. In this study it was fund that three-furths f the fresh brilers bught by the 266 stres were prcessed and sld as fresh cut-up r parts. The cst per pund averaged 4 cents fr cutting and packaging and 1.4 cents fr package material. Of the 266 stre managers, 28 listed several reasns ther than price fr nt handling r selling mre frzen brilers. Of these, 8 stated that cmpany plicy prhibited them frm handling sme frms f frzen brilers because these prducts had nt prved t be prfitable items; 5 had never tried t handle any frm f frzen brilers; 5 believed that the quality f frzen brilers was lwer than that fr fresh-chilled birds; 3 gave the reasn f "t much cmpetitin;" 2 stated that mst f their custmers prduced the chicken they cnsumed; and 5 were dissatisfied with the way frzen brilers were packaged. Advantages f Selling Frzen Brilers Sixty percent f the managers f 185 retail grcery stres selling frzen brilers indicated that the merchandising f them had ne r mre advantages ver selling the birds in fresh-chilled frm. Generally, a higher prprtin f each f the advantages was reprted by the peratrs f the larger stres and thse lcated in cities f 5,000 r mre ppulatin (Table 4). Fr the 110 stres where the managers reprted advantages f selling frzen ver fresh brilers, each stre averaged selling 5,600 punds f frzen

17 Stre 1 brilers annually. This cmpared with 3,100 punds fr 75 stres where the managers reprted n advantages. Table 4. Advantages f Selling Frzen Over Fresh Brilers, by Size, Type and Lcatin f Stre, 185 Grcery Stres, Tennessee, I \ I_ lc. by pp~ 'S~e_ f stre_~~~._ Typ=-~~re I f cit_y _and n. il I iii t Advantages f sell- - I i I Under -\ '. and ing frzen ver fresh Small I Med. - Large I Chain 1nd lver brilers I I II 42 l Percent 'f stres r~prting advant~ge f selling f~zen ;ver fr;;hb~';ile-;'~-( a Less labr required I \ I Less perishable \ Meeting cmpetitin I Cnvenience I _ (a) Frzen brilers included whle, cut~up. and parts. Sme stre managers reprted mre than ne advantage, therefre, the percentages in (:lumns ttal mre than 100. Less labr required. Sixty-eight stre managers reprted tw reasns why less labr is required in handling frzen, cmpared with fresh brilers. Crates f fresh-chilled birds hlding frm 24 t 30 carcasses cntain crushed ice equal t abut half the weight f the birds. The packaging and freezing f brilers at the prcessing plant eliminates extra labr required in transprting ice frm the prcessing plant t the retailer, and in handling the bulky crates f iced chicken in hlding rms and meat cutting departments f retail grcery stres. Merchandising brilers in frzen frm als eliminates labr invlved by the retailer in cutting up and packaging chicken t be sld as fresh cut-up r parts. Abut 75 percent f the fresh brilers handled by 266 stres included in the survey were cut up and packaged and sld as fresh cut-up r parts. The time required t cut up and package a fresh briler varied frm 6 t 120 secnds per bird amng stres with an average f 45 secnds per bird fr all stres. Less perishable. Fifty-ne stre managers reprted that the merchandising f frzen has an advantage ver selling fresh brilers because they can be held lnger withut fear f deteriratin r spilage. This enables the prcessr and retailer t better adjust fr the supply and demand f dressed brilers, since they will nt have t be sld within such a shrt length f time after being prcessed. Because frzen brilers are less perishable than fresh nes, the stre peratr can ften buy in larger quantities, keep different frms cntinuusly in stck, and avid the marketdemralizing practice f dumping. 16 All siii e

18 Meeting cmpetitin. The managers f 15 stres stated that sme f their custmers purchased brilers nly in frzen frm and wuld d their fd shpping nly at stres where chicken in frzen frms was available. The extent t which stres lst business r sales because frzen brilers in different frms were nt ffered fr sale was nt determined. Hwever, the stres that ffered the greater variety f different frms f bth fresh and frzen brilers reprted the highest annual vlume f ttal briler sales (APPENDIX A). Cnvenience. Seven f the stre managers indicated that frzen brilers in varius frms were easier t handle than fresh nes. Under the categry f cnvenience was listed the advantages f easier t stre, eliminatin f the handling f crates f iced chicken which results in wet flrs in hlding rms, use f different frms f frzen brilers as fill-in fr fresh birds, and saving f cunter space. MERCHANDISING PRACTICES Origin f Frms f Frzen Brilers Frzen whle, cut-up, and parts. Of the 266 stres included in the survey, 185 handled sme frm f frzen brilers-whle, cutup, r parts. Nearly 610/0 handled frzen parts, 14% frzen cutup, and 7% frzen whle brilers. Thse frzen frms f brilers were prcessed by 20 different cmpanies and riginated in nine different states (Figure 2). Abut 56% f the 185 stres handling frzen brilers purchased frm five different cmpanies in Gergia; 14% frm tw cmpanies in Nebraska; 120/0 frm fur cmpanies in Tennessee; 10% frm fur cmpanies in Illinis; and 180/0 frm ne r mre firms in the states f Alabama, Mississippi, Indiana, Missuri, and Virginia. Abut ne ut f 10 stres bught frzen brilers frm mre than ne cmpany. Each cmpany selling frzen brilers had a particular brand name fr its prducts. Frzen chicken pies and dinners. Mre stres handled frzen chicken pies and dinners than frzen brilers-whle, cut-up, r parts. Of the 266 stres, 840/0 sld frzen chicken pies, 73% sld frzen chicken dinners, and 730/0 sld bth pies and dinners. These pies and dinners were prcessed by 14 different cmpanies and riginated in 11 different states (Figure 2). Abut 44% f the stres handling frzen chicken pies and/r dinners purchased frm tw cmpanies in New Yrk; 330/0 frm ne cmpany in Nebraska; 24% frm tw cmpanies in Tennessee; 220/0 frm ne cmpany 17

19 Refers t cmpanies supplying frzen brilers Refers t cmpanies sup-.6. plying frzen chicken pies and dinners Figure 2. Number f cmpanies supplying 266 grcery stres in Tennessee with frzen brilers and frzen chicken pies and dinners, in Missuri; 110/0 frm tw cmpanies in Illinis; and 240/0 frm ne r mre firms in the states f Gergia, Indiana, Iwa, Ohi, Pennsylvania, and Virginia. Abut 6 ut f 10 stres bught frzen chicken pies r dinners frm mre than ne cmpany. Each cmpany selling frzen chicken pies r dinners had a special brand name fr its prducts. Five f the 14 firms supplying frzen chicken pies and dinners als prcessed frzen brilers-whle, cut-up, and parts-and sld these in Tennessee. Based upn the reprts f three cmpanies distributing frzen chicken pies and dinners in Tennessee in 1960, the amunt f briler meat put in these prducts culd nt accurately be determined. These cmpanies reprted that frzen chicken pies cntained 140/0 and frzen chicken dinners 450/0' by weight, f cked, debned chicken meat. 18

20 Meat cntent f pultry pies is regulated by law. Pultry pies which are prepared frm cked meat shall cntain a minimum f 14% (lv8 unces per 8-unce pie) f cked, debned pultry meat. This percentage shall be exclusive f any skin, giblets, r fat which may be included in the prduct. G Prices Received and Mark-up fr Frzen Brilers Prices were btained fr 23 different frms f brilers ffered fr sale by the 266 stres during the mnths f June t September, Average prices received by stres fr fresh and frzen brilers in varius frms were cmputed by size and type f stre and by size f city. In sme cases the data were limited because f the small number f stres handling a particular frm f briler. Only 19 stres handled frzen whle brilers and 38 sld frzen cut-up. Only 31 stres handled fresh barbecued brilers. Prices receizjed by frms f brilers. The average price and range in price received fr fresh and frzen brilers f different frms by all stres reprting is shwn in Figure 3. The results may be summarized as fllws: 1. Fresh livers averaged 5 cents per pund higher than frzen livers. Bth fresh and frzen livers averaged higher in price than any ther frm f brilers. 2. Frzen chicken dinners averaged 38 cents per pund higher than frzen chicken pies. 3. Fresh barbecue chicken averaged 76 cents per pund. 4. Fresh breasts averaged 4 cents per pund higher than frzen breasts. 5. Frzen thighs averaged 6 cents per pund higher than fresh thighs. 6. Frzen drumsticks averaged 9 cents per pund higher than fresh drumsticks. 7. Frzen whle brilers averaged 7 cents per pund higher than fresh whle brilers. 8. Frzen gizzards averaged 5 cents per pund higher than fresh gizzards. 9. Frzen cut-up brilers averaged 3 cents per pund higher than fresh cut-up brilers. 10. Frzen wings and necks averaged 11 cents per pund higher than fresh wings and necks. 11. Frzen backs averaged 6 cents per pund higher than fresh backs. 12. The range in average price amng stres fr each f 10 different frms f fresh and frzen brilers actually exceeded r equaled the average 6 Rt'gilialins G01'f'fllillg tlte InsJ)f'rtill j POllltr')' and Pultry Prducts, Agricultural Marketing Sl'ni,,:-, L.S.D.A., Ma\' 1,

21 Fresh livers Frzen Frzen Fresh Fresh Frzen Frzen Frzen Fresh livers dinners barbecue breasts breasts thighs drumsticks thighs Fresh Frzen pies Frzen whle Frzen Fresh whle Frzen Frzen necks bcks Legend Average FM\'i\%"l bcks -Range-+ Fresh necks * Figures refer t number f prices reprted Cents per pund Figure 3. Average and range in price per pund received fr fresh and frzen brilers in varius frms, 266 grcery stres, Tennessee, price. Fr example, frzen thighs averaged 70 cents per pund but amng stres the price range was 79 cents r frm 47 cents t $1.26 per pund. 13. The price per pund f 10 different frms f frzen brilers was lwer than that fr fresh brilers f similar frms at ne r mre stres in different areas f the State. Fr example, the price per pund fr frzen thighs averaged 70 cents fr all stres but was as lw as 47 cents 20

22 at ne r mre stres. During the same time the price fr fresh thighs ranged as high as 98 cents per pund at ne r mre stres. 14. The weighted average price per pund f 10 frms f frzen brilers was abut 6 cents higher than fr similar frms f fresh brilers As an average, the price f bth fresh and frzen whle brilers averaged higher than fr fresh and whle cut-up brilers. Part f this difference was accunted fr by the frequent special cut-up briler sales held by many f the stres that did nt handle fresh r frzen whle brilers. Prices received by size, type, and lcatin f stre. The price per pund received by small, cmpared with large, stres, averaged higher fr the fllwing frms: frzen breasts, drumsticks, thighs, gizzards, chicken pies, and chicken dinners. Small stres averaged lwer prices than large stres fr frzen whle, cut-up, wings, and livers (APPENDIX B). The weighted average price per pund f all frms f frzen brilers sld by small stres was nly abut 1 cent per pund higher than fr frzen brilers sld by large stres. The mst imprtant price difference ccurred in prices f frzen chicken pies and dinners. The price f frzen chicken pies and dinners at small stres averaged 8 cents per pund higher than that at large stres. Chain, cmpared with independent stres, averaged higher prices fr frzen cut-up brilers, but lwer prices fr frzen breasts, drumsticks, thighs, wings, backs, necks, livers, and frzen chicken pies and dinners. The weighted average price per pund f all frms f frzen brilers sld by chain stres was abut 8 cents lwer than that sld at independent stres. The weighted average price per pund received by stres fr all frms f frzen brilers decreased frm 60 cents in places under 1,000 ppulatin t 57 cents in twns f 1,000 t 4,999 ppulatin, and t 54 cents in cities f 5,000 ppulatin and ver. Hwever~ the prices n individual frms f frzen brilers varied cnsiderably. Stres lcated in places having under 1,000 ppulatin received the lwest average price per pund fr frzen whle brilers. Stres in twns f 1,000 t 4,999 ppulatin reprted the lwest average prices fr frzen dinners. Stres in cities f 5,000 t 24,999 ppulatin averaged the lwest prices fr mst ther frms including frzen cut-up, breasts, drumsticks, thighs, wings, backs, necks, and livers. Mark-up n frzen cmpared with fresh brilers. Individual stre managers were asked whether their average retail mark-up 7 The 10 frms f hri1er~ included: whle, cnt-up. breasts. drumsticks. thighs, wings. backs, necks. H\ers, and gizzards. 21

23 abve whlesale prices n frzen brilers was higher r lwer than n fresh brilers. Of the 185 stres selling frzen brilers, whle, cut-up, r parts, 600/0 reprted lwer percentage mark-up n frzen brilers. These stres handled 79% f the frzen brilers sld by all stres. The practice f lwer mark-up n frzen than fresh brilers was related t vlume handled per stre. This relatinship was cnsistent by size and type f stre and in stres by size f city (Table 5). The stres reprting lwer mark-up n frzen than fresh brilers generally charged lwer prices fr all frms f frzen brilers. These differences per pund averaged 6 cents fr whle, 4 cents fr cut-up, 12 cents fr thighs, 9 cents fr breasts, 5 cents fr drumsticks, 4 cents fr backs, 2 cents fr livers and necks, and 1 cent fr gizzards and wings. Table 5. Mark-u!, n Frzen, Cmpared with Fresh Brilers, by Size, Type, and Lcatin f Stre, 185 Grcery Stres, Tennessee, ~- ~--- I - ~~-\-T yp~~;;--ist;re lc.-];ypp. fci~-~-- I-~ ,--~I---~.-~----l- I Size f stre and n. I and n. I and n.! ~ All Mark-up n frzen I Ii I[Under! and stres, cmpared with I Small Med. Large Chain Ind.,1000 I 49991' ver n. fresh brilers I I 15 I Higher I 46 P~~c;;t-~f;~r~s ;::~~ting 4~;i~; ;3~~k-u~8n fr;~en b;~~~ler;--~~ Lwer I I I All stres ! I Thusand~ pu';-ds f frzenb~~ilers sld~~~uallyp~r-st;;;'e by-price mark:~p (a) Higher \ \ I Lwer All stres Av I (a) Fr7en brilers included whle, cut-up,,lild parts. Advertising Frzen Brilers Methds. Abut 65 percent f the 185 stres handling frzen brilers never advertised them. Their annual sales per stre averaged nly 1,400 punds r less than ne-third f the average fr all stres. The percentage f stres advertising frzen brilers increased as the size f stre increased, averaged higher fr chain than independent stres, and averaged higher fr stres lcated in the larger cities. Stres using newspapers in cmbinatin with radi r TV as advertising media fr frzen brilers shwed the highest average annual sales f frzen brilers per stre (APPENDIX C). Six stres, advertising by newspapers, radi, and TV averaged 22,900 punds f frzen brilers per stre. Seventeen stres using news- 22

24 and papers and radi averaged frzen briler sales f 11,800 punds per stre. Thirty-tw stres using nly newpapers averaged frzen briler sales f 8,600 punds per stre. Frequency. Amng the 185 stres handling frzen brilers, the frequency f advertising was assciated with the vlume f frzen brilers handled per stre. Fr 40 stres advertising frzen brilers frequently, the sales f frzen brilers averaged 13,500 punds per stre annually. Sales fr thse stres advertising frequently averaged 2.4 times as great as fr 25 stres that seldm advertised, and 9.6 times mre than 120 stres that never advertised frzen brilers (Table 6). Althugh nly 210/0 f the stres selling frzen brilers advertised them frequently, these stres handled 640/0 f the frzen brilers sld by all stres c Frequency f advertising frzen brilers Table 6. Frequency f Advertising Frzen Bilers, by Size, Type and Lcatin f Stre, 185 Grcery Stres, Tennessee, 1960.! Type stre I\Stre lc. by pp. f city Size f stre and n. 1 n. and n. 1 Sm aiii' Med. Large Chain i-~nd. 1.1~;;1.~d. ~~~:I\':~OI,,:: I i 93! 15 J 75 I i 185 :O--pe-rc-e---Cnt--f stres reprting frequency ~~f advertising frzen brilers. Never I II Seld m Frequently (a) I 0 II Ttal Thusands punds f fr-;;~-bril~~~jd~~~-;rly per stre by frequency f advertising (b) Never I I 1.4 Seldm , 5.6 Frequently (a) II All stres, Av (;I) :Mnthly r ftener at regular r irregular intervals. (Il) FnllCIl brilers included whle, Ctlt-up, and parts. The percentage f stres advertising frzen brilers, either seldm r frequently, increased as the size f stre increased, was higher fr chain than fr independent stres, and increased as the size f city increased up t 25,000 ppulatin. N relatinship was fund between the regularity f advertising frzen brilers and vlume f sales; that is, the sales per stre fr thse stres advertising frequently at irregular intervals averaged as high as fr stres that advertised frequently at regular intervals. Displaying Frzen Brilers Methd f display. Of the 185 stres handling frzen brilers, 920/0 displayed them in self-service cases and these stres handled 23

25 ver 980/0 f the frzen brilers sld by all stres. Stres using self-service cases fr display had sales f nearly 4 times mre frzen brilers per stre than thse using service cases, and 10 times mre than thse using clsed refrigeratrs (Table 7). All the large stres had displays f frzen brilers in self-service cases. Fr stres using self-service displays, mre frzen brilers were sld per stre regardless f size, type, and lcatin f stre. Kind f display Table 7. Methd f Displays f Frzen Brilers, by Size, Type and Lcatin f Stre, 185 Grcery Stres, Tennessee, I Type stre IStre lc. by pp. f _City '1_ Size f stre and n. and n. and n. ~ 1 ---I ----I --- (' 25000I All : Under and I stres, Small Med. Large Chain I Ind. [ ver n. 112 I : 53 I I ---I ~.Perc~~t~f stres reprti~gkind ~~fdi-;p1~yf-;;~-frze~~.;tters-- Self-service case I \ Service case 7 3 a Refrigeratr 4 a a I I 4 I 7 3 a 2 3 All stres ~ fh;usandpu~d~ f~z';-~b-;:-~iers skr-~nnualy by kind f clisplay~: Self-service case I Service case a Refrigeratr 0.5 a a I a 0.2 I 0.5 All stres, Av ~.1_..l~_-,"4_9.'...-~:!~ (a) Fn)fC'n brilers included,",'hle. cut~up, and parts. Lcatin f display. There was sme relatinship between the placement r lcatin f frzen briler displays and the vlume f frzen brilers sld per stre. In 350/0 f the stres handling frzen brilers, the frzen prducts were generally displayed befre fresh nes t custmers in the usual flw f shpper traffic in the stre. These stres handled half f the frzen brilers sld by all stres and averaged frzen briler sales f 6,400 punds per stre (Table 8). In 610/0 f the stres, the brilers were lcated s that custmers wuld usually see the display f frzen after the fresh prducts. These stres handled 490/0 f the frzen brilers sld by all stres and averaged frzen briler sales f 3,700 punds. Only eight stres displayed frzen brilers with, r in clse prximity t fresh brilers, and these averaged nly 1,700 punds f frzen brilers per stre. Amng all stres the data indicated that as an average mre frzen brilers were sld per stre, where the frzen were displayed befre fresh, but this relatinship was nt cnsistent amng medium-size stres and thse lcated in twns having under 1,000 24

26 ppulatin. These data appear t indicate that in many stres the lcatin f frzen briler displays was nt as imprtant a factr affecting vlume f frzen briler sales as were ther merchandising practices discussed previusly. Table 8. Lcatin f Display f Frzen Brilers, by Size, Type and Lcatin f Stre, 185 Grcery Stres, Tennessee, Lcat=--:ff::ze:-rs;~e f stre and n:'l T:~~ ~:~e IStre lc'a~~ ::.p. f city I briler display in i---..., I I, All relatin t usual \ I underl and stres, flw f shpper i Small Med. Large Chain Ind ver n. traffic in the stre! I 12 I , 53 42, 185 -I Percent ~f stres reprting lcatin f frzen briler display Befre fresh I I With fresh i After fresh I I All stres Thusand -p~-unds f frzen 'brile~sld annualy~p'er stre by lcatin f display (a) Befre fresh I I 6.4 With fresh!i After fresh I II 3.7 All stres, Av. i (a) Frzen brilers included whle, nil-up, and parts. Size f display. As the size f stre increased frm small t large, the frzen briler display space increased 2.9 times, but the vlume f frzen brilers sld per square ft f display space inceased 4.7 times (Table 9). The better utilizatin f display space fr frzen brilers by the larger stres was largely attributed t differences in merchandising practices fllwed by large stres. As indicated tn Table 5, a higher percentage f the large stres reprted lwer mark-up n frzen than fresh brilers. The per- Table 9. Size f Display f Frzen Brilers in Relatin t Vlume Handled, by Size, Type and Lcatin f Stre, 185 Grcery Stres, Tennessee, T"'i t_' tre ~::r:rlll~:~:yi ~,: h:~ \_'"1 f ::~- 1::C~~ frzen brilers I Small I Med. i_larg=- _Chain_.lnd. 1000, ver (a)-n. i Frzen briler dis- i play space per! stre-sq. ft. Frzen brilers sld per sq. ft. display-lbs. All stres, n. i I! I (~) Frzen brilers induded whle, cut-hp, and parts

27 centage f stres advertising frzen brilers increased as the size f stre increased and a higher prprtin f the larger stres advertised frzen brilers regularly and by mre than ne methd (Table 6 and APPENDIX C). All f the large stres displayed frzen brilers in self-service cases and a higher prprtin f the large stres displayed frzen brilers befre fresh nes t custmers in the usual flw f shpper traffic in the stre (Tables 7 and 8). Sme small stres btained high utilizatin f display space in the handling f frzen brilers. Amng the 13 that averaged 2,270 punds f frzen brilers per square ft f display space, 2 were small stres. Amng 20 that averaged 685 punds f frzen brilers per square ft f display space, 5 were small (APPENDIX D). The imprtant factrs assciated with the high turnver f frzen brilers at these stres were: 1) Sale f several different frms f bth fresh and frzen brilers; 2) cntinuus supply and display f brilers; 3) lwer markup n frzen than fresh brilers, 4) frequent advertising f frzen brilers; 5) use f self-service display cases; and 6) display f frzen befre fresh brilers t custmers in the usual flw f shpper traffic in the stre. Y emperature in frzen briler display cases. The increase in vlume f frzen brilers in Tennessee and ther states has brught abut prblems in maintaining the quality f the prducts. Temperature is ne f the mst imprtant factrs in maintaining quality. A study cnducted by the State Department f Agriculture in 1958 indicated that a frzen fd prduct temperature f OUF. r belw in every step f distributin f frzen fds is recmmended.~ Data were secured n the temperature indicated by display case thermmeters in each stre where frzen brilers were sld. Althugh few checks were made as t the accuracy f the thermmeters, it is believed that the recrded temperatures as an average shw what the general situatin is with respect t the displaying f frzen brilers at the retail level (Table 10). Abut 76% f the stres handled 920/0 f all the frzen brilers. They displayed them at an average temperature f abut 9( belw zer with a range amng stres f abut -1 t -20. Anther 170/0 f the stres handled 30/0 f all frzen brilers. They displayed them at an average temperature f slightly abve zer with a range f 0" t +5 abve zer. Seven percent f the stres handled 50/0 f all frzen brilers and failed t meet the staterecmmended requirement f hlding frzen fds at 0" r belw. "42nd Biennial HI!J)()l"f f tlte Tnl1less('(' Dej}ln-Imnlf at A f{rif'ulfllrf'. Jlll~ 1, 1956 t June :W. l%r, pages 6R