AMS No. 040-04

Joan Shaffer (202) 720-8998

joan.shaffer@usda.gov

Billy Cox (202) 720-8998

billy.cox@usda.gov

WASHINGTON, March 8, 2004 - The U.S. Department of Agriculture today announced the release of a new report designed to help smaller meat processors develop more effective marketing strategies for a growing market segment.

Enhancing Commercial Food Service Sales by Small Meat Processing Firms, a study conducted by USDA and Texas A&M University, contains data that underscore the potential ability of smaller meat processing firms to compete successfully in supplying meat products to the commercial food service sector. Chief among these findings is the overriding importance of product quality over cost, suggesting that scale of operation may not necessarily impede a small firm's ability to compete successfully against larger processing operations.

The study, designed to determine potential areas of competitive advantage for smaller scale meat manufacturing firms in supplying local restaurants and other local commercial food service accounts, reports that geographic proximity and the ability to deliver meat products with superior freshness may grant significant marketing advantages. In addition, the practice among many restaurant and commercial food service operators to seek variety and innovation can create potential opportunities for smaller meat manufacturers, who can supply new and/or unique products for unusual recipes or frequently changing menus.

Beyond identifying these general trends in the overall survey population, researchers uncovered significant differences among the procurement preferences of specific segments of the commercial food service market, taking into account such variables as ownership structure, annual store sales volume, average dinner ticket price, and cuisine type. Such analysis suggests that meat processors intending to develop business relationships with commercial food service buyers can benefit from understanding the specific preferences of their targeted customer base and tailoring their sales materials to emphasize those products and services most strongly desired by a particular market segment.

The report, Enhancing Commercial Food Service Sales by Small Meat Processing Firms, can be viewed online at www.ams.usda.gov/tmd/MSB/msb.htm and will soon be available in hard copy. For more information on the project or to obtain a copy of the report, contact Debra Tropp, :USDA-AMS-TMP-MSB, Room 2646-S, 1400 Independence Avenue, SW, Washington, DC 20250, tel. (202) 720-8326, fax (202) 720-2848, or e-mail Debra.Tropp@usda.gov