Oscar Mayer Claims Its Share Of Deli-Counter Segment

By Karla Paris

Consumer demands drive Oscar Mayer to invest in product innovation

The Daily Meal reports on April 7 Oscar Mayer has released new Deli Fresh BOLD flavors to its existing lineup of Deli Fresh lunch meats. According to The Daily Meal, Oscar Mayer was, “Inspired by a consumer demand for healthier and more flavorful options at the deli counter. The whole line is gluten-free, 97 percent fat-free, and contains no artificial flavors or preservatives.”

So, what is behind the bold stance Oscar Mayer has brought to market? There are several factors to consider.

The battle between packaged and deli-case brands has been pretty much a wash. As of 2012, deli brands maintained a slight edge, with a combined 51.5 percent share in dollar sales in the $12.6 billion lunch-meat market, compared with 46.6 percent for prepackaged meat, according to the latest data from market researcher Mintel.

Mintel forecasted the deli-counter segment to grow sales by 11 percent to about $7.2 billion from 2012 to 2017, compared with 15 percent growth to $6.8 billion for the packaged-meat business.

Another factor for the product line enhancements is maintaining and expanding Oscar Mayers’ market share. Kraft, with its Oscar Mayer brand, dominates the packaged refrigerated sliced lunch meat segment with a 38.6 percent share.

Other brands in the segment have already introduced flavorful, yet healthy enhanced products in an effort to meet consumer demand for a more flavorful deli-meat experience, so Oscar Mayer has its work cut out for it.

• Hillshire Brands' Aidells brand, for example, is plugging flavors such as Chipotle Pineapple Smoked Chicken Breast. The flavor "is actually infused directly into the meat. So there is no other product like this in the United States," Hillshire CEO Sean Connolly said earlier this year at an investor conference.
• Tyson puts itself in an excellent position to take away a portion of the market from competitors like Hormel and Hillshire by entering the realm of prepared foods.
• Hormel continues its acceleration of its Hormel Natural Choice meats brand. Hormel Natural Choice products are 100 percent natural with zero preservatives and no artificial colors or MSG. No nitrates or nitrates added, and they have no gluten-containing ingredients.

Growth in the packaged segment is expected to be driven by flavor innovation and healthier options for consumers, according to Mintel, and Oscar Mayer seems to be in position to claim its share through product innovation.