In the Beef Certificate Training for Texas A&M AgriLife County Extension Agents last week, we took a tour of H-E-B’s meat processing facility in San Antonio, and I thought I would relate some of the comments and experiences from the tour. Mike Jarzombek, the vice president of meat sales for H-E-B, and Jim Klein, meat plant manager, were our hosts.
Prior to 1972, the facility was a beef breaking plant where whole carcasses were broken apart into primals (chuck, rib, loin and round) and subprimals.
In the 1980s, when “boxed” beef began, they made it a retail packaging plant. The plant produces about 2.5 million finished pounds of beef, pork and chicken a week. The plant moved to “case-ready” in the 1990s.
The plant packages about 80 percent of the chicken and pork used at H-E-B stores but only about 20 percent of the beef. The reasons for having 80 percent of the beef cut at stores included maintaining beef color (it is more likely to change over time if cut days in advance), and H-E-B still prefers to “craft” its beef to their customer base in each store (size, portion, cut type, customer preferences/requirements, etc.). As a result, most H-E-B stores still have butchers.
They emphasized beef is critical to H-E-B; it has the highest value of all meat departments of all supermarkets. H-E-B sells about $850 million of beef per year. They also sell about $300 million of chicken and $450 million of pork.
The plant produces value- added products from all three meats. About 50 percent of the beef packaged in the plant is marinated (fajitas and briskets) along with more than 50 percent of the chicken. Processing and packaging at one facility reduces real estate costs (smaller stores), labor (fewer butchers in each store), equipment and product waste and improves safety (worker and product).
H-E-B has divided its customers into five groups: Ultra Value, Value, Core, Core with Tendencies, and Uber Up. The Ultra Value may have the least to spend on food. They look for lower-priced products – primarily chicken and pork but also beef.
They and the next purchasing level, Value, are the reason H-E-B went to thin-slicing steaks and pork. Hispanics are the biggest consumers of meat, especially beef.
The Core group are beef lovers and are usually baby boomers with a middle-class income.
The Core with Tendencies group tends to be younger and more apt to try novel or healthier products or even products that are ready to eat or cook. This group is growing.
The last group, the Uber Up, have the most disposable income. They tend to spend money on beef products grading Prime.
Of course, each of these groups has other buying habits, but this was primarily about the meat side of sales.
In addition to “local,” the other trend H-E-B sees is the importance of some sort of “welfare” labeling, and their Texas Brand product comes with an affidavit indicating raising and handling practices.
One of the last things we saw was their “ready-to-heat-and-eat” individual meals. They make and sell 1 million of them each week and are going to begin a second line soon. Obviously they know something about the direction of food preparation.
There are 320 H-E-B stores in Texas; nine Central Markets, usually with a service case; two Mi Tiendas, both in Houston; and eight Joe V’s, a discount, warehouse-type food store. There are also 61 H-E-B stores in Mexico.
If you ever get a chance to visit, I would highly recommend it.