990391 IBP Hires Group to Create Branded Beef, Pork

Chicago - IBP Inc. is looking to put its brand on meat. The Dakota City, Neb.-based processor this week tapped Fallon McElligott, of Minneapolis, to help develop a line of convenient fresh and prepared beef and pork products.

In so doing, IBP joins dozens of smaller processors in focusing on convenience foods that appeal to time-crunched consumers, who typically spend just 30 minutes in the kitchen preparing meals. The effort, in effect, is designed to regain market share lost to the chicken industry, which has aggressively pursued value-added and branding strategies.

To develop its products, IBP will lean heavily on strategic and communications advice from Fallon and its Duffy Design unit. Fallon won the business following a two-month review that included Chicago shops Foote, Cone & Belding and DDB Needham. Billings were not disclosed, but Adweek reported the account to be worth $10 million to $20 million.

“We're really designing a brand from the ground up,” Rob White, president of planning at Fallon McElligott, said. The agency will be involved in everything from developing a brand identity to positioning the brand and advertising.

“We'll be working very closely with the client in developing the most appropriate product line within the brand strategy,” White said. “Obviously, they're the product experts. We'll be spending quite a bit of time in their processing plants getting to know the business from the ground up,” he said. The agency also will conduct consumer research to determine unmet needs.

“What's driving all of this is that more and more, instead of buying ingredients, consumers are buying ready-to-cook or ready-to-eat foods,” said IBP spokesman Gary Mickelson said.

The Denver-based National Cattlemen's Beef Association projects 20% growth in the heat-and-serve beef category this year, adding to the more than $17 billion consumers already spend on beef annually. Such items include fully cooked pot roasts and beef stews that can be microwaved and ready to eat in 10 minutes.

To help stir consumer interest in the growing array of heat-and-serve beef products, the cattle group in January launched its own $25 million integrated marketing effort. The campaign, which includes new advertising from Leo Burnett Co., Chicago, brings back the familiar “Beef. It's what's for dinner” tagline.

The ads are designed to build awareness of the so-called “easy beef” options from companies such as Burnett and Con, Flint Hills Foods, RMH Foods Inc, No Name Steaks and Lloyd's Barbecue, all members of the Cattlemen's association.

While beef continues to be the nation's No. 1 selling source of protein, demand has flagged for less expensive cuts such as chuck and round, which account for more than 60% of beef carcass by weight.

“Basically, for the last 15 years, the beef industry has continued to lose market share directly to chicken,” said Mary Adolf, vice president of consumer marketing for the National Cattlemen's group. Since 1980, beef's market share has fallen 13.7%age points to 40.2%.

Chicken, meanwhile, has gained 10.1%age points to 26.2% in 1998, Adolf said.

“The chicken industry has been very aggressive in offering value-added products and branded products. Almost 100% of the chicken case is now branded. A good 75% of the offerings are value-added to some extent,” she said. “When you go into the beef section, it looks basically the same as it did 20 years ago. You don't see a lot of fully-cooked, marinated or single-serve packaging.”

Adolf said IBP's move into branded meats reinforces the trend. “They are the major packer. I think it's a signal that their research and sales figures also point to the fact that there is a need and an opportunity in this product category. We're hopeful they will put some strong marketing effort and dollars in building this brand effort to consumers,” she said.

Though IBP may be behind in entering the branded category, the company believes there is still plenty of room. “There are others in our industry who are involved in producing branded meats, but we feel the field is still wide open for us in establishing a leadership position,” IBP's Mickelson said. “We feel we have established our reputation for quality. We want to leverage our reputation through the production of branded products.”

IBP has no set timetable for bringing its products to market. “From our perspective, it's more important to be slow and right, than fast and wrong,” Mickelson said.

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