2026.09.30 | TB | Consumer | US Processed Meat Market Expert

Client-led • 25 Sep 2026

Companies: COST US, TSN US

Expert Senior Procurement Executive at WinCo Foods Inc

Agenda

• Over 30 years' experience in the US processed meat market, focusing on supply chain management, operational efficiency, negotiations, inventory management and quality control
• Knowledgeable on processed meat categories, demographic considerations between the East Coast and West Coast, retail facings and product demand metrics
• Well-positioned to comment on retail slotting, assorting different proteins and premium products, noting Aidells and Amylu Foods' market positioning, as well as Costco's sausages and manufacturer relationships

Introduction

Client [00:03:05]: We're researching the broader processed meat market, particularly dinner sausages, in terms of category management. We'd appreciate your insights into the market, the brands you bought, distribution between different parts of the category and different brands and the stack of price points from premium to mainstream.

Questions

00:05:57] How do you break down the processed meat category during procurement? How do you divide your time among the different subcategories?

Expert [00:06:18]: Actually, we break it down into specific categories. Then, you go into turkey chicken, then we go into different proteins diving in a little bit deeper. Of course, when you say sausage, we go processed meats. Processed meats do indicate bacon, ham, chicken, pork and a lot of avenues as far as poultry and turkey, specifically, we break it down into different demographics, if you want to go into demographics, there are a lot of moving parts specifically.

Client [00:07:16]: How does the whole category break down? Does it comprise bacon, lunch meats and breakfast and dinner sausages? Are these sausages separate? How do you think about fresh vs processed meats? What are the 4-5 subcategories under processed meat?

Expert [00:07:40]: When we break it down into categories, we're looking into sliced meats, sausage. It could be dinner or breakfast, it could be that route, but then we go to authentics. Authentics will be like chorizo and linguiça, and then we go into a specific different ingredient as far as it being a different flavoured sausage. Processed meats will be broken down into bacon, lunch meat will be thin cuts and stuff like that, and then we go into speciality categories. It's broken into three categories if you're looking at processed meat specifically.

00:08:31] Do you consider breakfast and dinner sausages and the authentics as separate categories? Chorizo seems to be a separate category, especially in California.

Expert [00:08:44]: Yes. I would say it's speciality like chorizo will be speciality, linguiça will be speciality, that being different flavours, different, I guess, styles of it specifically. We don't break it down into dinner sausage vs regular sausage.

Client [00:09:11]: Was that how you approached it in the past, too?

Expert [00:09:17]: When we procure it, we only procure it as sausage in general. We don't go Jimmy Dean vs dinner sausage. Jimmy Dean Little Links vs if you're looking at dinner sausage, what's considered dinner sausage, kielbasa. We're looking at that. It's just all into one category.

Client [00:09:44]: Is the breakfast sausage separate from the dinner sausage?

Expert [00:09:53]: Here's the question. What's considered dinner vs breakfast? Is it the style or the ingredient?

Client [00:10:08]: I look at breakfast as being akin to sweetened maple links and patties.

Expert [00:10:15]: I got you.

Client [00:10:20]: You're the buyer.

Expert [00:10:24]: It just lumped in all.

00:10:32] How do you think about the demographics and the price stack? How do you gauge your selection as good, better or best? How do you think about which price range to buy and who you're trying to sell to?

Expert [00:10:50]: It's all the lower income, the EBT and the lower income shopper or consumer. Then the Costco, it's more of a value bulk item or bulk more for your money and better for you, so like Amylu will do a lot better because of the ingredient or the protein specific, be chicken or be a turkey will do better, but we're talking about demographics. The West Coast vs the East Coast, that will be a lot different.

Client [00:11:28]: What do you think is different between the East Coast and the West Coast in terms of product?

Expert [00:11:36]: Brats does well but not extremely well like into Wisconsin or a northwestern demographic. That being said, it's a beer brat, a jalapeño brat, a regular brat or a beef brat does well here, but doesn't do extremely well like, say, of course, Johnsonville in Wisconsin does very well around that demographic, the western vs the eastern demographic. Aidells do really well around here, if you're familiar with Aidells, they do chicken and all that. Everybody's health conscious around the West Coast. When I say the West Coast, it could be all the way from Arizona all the way to Washington specifically, does very well. Hillshire does very well, but it does a little bit better. Kielbasa is more of, say, dinner sausage, it's more of a dinner sausage. They have various flavours, and it's more of a demographic for specific clientele like demographically a Polish, a Russian or a Croatian descent. It's demographically positioned very well on the East Coast vs the West Coast. You say higher volume or like Costco specifically, two for ones or a little bit of a bulk offering, discounted offering more for your money, Hillshire does very well.

Client [00:13:50]: I've learned that Hillshire is not supposed to be fed to kids. I thought it's good, especially those Lit'l Smokies. Do you assort them?

Expert [00:14:04]: Very familiar, especially now football season kicks off. If you want to look at numbers, numbers don't lie. People do. I usually go with that phrase. That being said, Hillshire does very well into the winter months or into October vs February months, they do extremely well, Lit'l Smokies for gatherings. Dinner sausage, when we say dinner sausage, various flavours for Hillshire, rope style and different blends of ingredients specifically.

Client [00:14:44]: Were you buying for a specific region, or is that across regions?

Expert [00:14:56]: I covered the region specifically, and that was the Western region. I was concentrating mainly on processed meats and beef as a category specifically.

Client [00:15:07]: What does the western region include? Wasn't even California broken up into regions?

Expert [00:15:15]: It could be by now. It could be a region currently.

Client [00:15:27]: Were you covering the whole West Coast?

Expert [00:15:34]: I was covering a region specifically, and that was California, Oregon, Washington and Arizona. It was quite a heavy load, specifically if you want to go with tonnage, tonnage was very the number one feature in that aspect, pushing the quantity and pushing the pounds.

00:16:04] You're buying beef as well as processed meats. How would you decide how much beef to put in what cases vs how many facings of processed meat you would do?

Expert [00:16:19]: Of course, there's no slotting involved in Costco. If you're familiar with slotting, slotting is when the manufacturer pays for shelf space. That being said, they have a good partnership and a good programme with the current suppliers specifically. If you say beef, it was a retail box level, cutting boxed beef into, I won't say retail cuts or you say retail cuts with Costco. If you're looking at bacon or sausage, already a certain amount of SKUs that we already specifically carried and if we didn't carry it and if it wasn't a staple, a top 100 item, which Costco normally uses top 100, it's a staple for the item set for. If there's a new item going into Costco, reaching the Costco new item sales level, Department 19. Department 19 is a speciality case or all four speciality cases to alter or discover from our member service or our members going forward. If it's a new item coming in into Costco, it will be on a trial period, a 60, 90 trial period and it will be in the Department 19. It would not be in our glass doors, so it's not a top 100 item.

Client [00:17:56]: Does that mean you get to put in a different place, such as the coolers?

Expert [00:18:01]: The cooler doors will be like the bacon or be a certain sausage going into the cooler doors. That's a stapled item for Costco specifically. If it's an alternate item that you'll see coming into the doors will be in Department 19. It will be the upright, the region without the doors by the meat department going into Costco.

00:18:35] How would you decide whether a product gets off the trial and enters the staple item segment?

Expert [00:18:42]: One would be through the networking system that, say, a supplier or a new manufacturer will go into the showcase. The showcase Costco has once a year into Issaquah, you offer the product, you see if the buyers or the head of procurement will like the item and fit the need for the business for the demographic, the sales, the price point percentaged and what offerings does that manufacturer have? What doesn't it have, either unique flavours, package size, clean labelling, a unique label service attractiveness and demand following already test piloted through another location. Say, another location will be like a Vons Albertsons, Walmart, Sam's Club or another location, specifically like that. That will be a test pilot and then we'll move it to a smaller demographic, will be to a per location per store and then it will be on a SKU optimisation as far as it being a watch dog. It will be on a hot sheet. Hot sheet will determine if it's a product that's in demand, out demand or it's already plateaued, it's already reached its sales cap. It doesn't drive anything forward and it gets taken out of the location.

If it's a dead SKU, we try to uplift it and replace it somewhere in the store or the warehouse. It has more advantages or more eyes on that specific product. Then we have the samplers, it's called CDS, those sampling ladies to come out and sample it if it's an item, and if the manufacturer is willing to pay for that sales item to be sampled or a discounted item to be viewed more or to be more appealing to our members or our customers. Those CDS ladies do not work for Costco. Those are hired by the manufacturers to come out to sample the product. Basically, you're advertising that product to the members coming through.

00:21:29] What determines if someone gets on the hot sheet? How do you decide if it's in demand or plateaued? What metrics are you looking at?

Expert [00:21:39]: First, we ask if that product was on a trial run or was it actually already offered to another company, and how did it do? If it's an item that didn't do well and we think it will do well at Costco because XYZ because of the package size, the demographic and the price point, we're looking at that specifically. If you're a new manufacturer coming to me as a procurement manager, I'm looking at what does that product have to do better than the other existing products? Is it a flavour offering? Is it a price point? Is it a package delivery? Is that clean labelling? There are a lot of factors involved in that specific product to be entered.

00:22:39] Are there any specific sell-through metrics that you're looking at, such as dollars per week per club or stacks per week per club?

Expert [00:22:56]: That's a great point. We first ask how did they do on the trial run or how did they do on the offering specifically? Then what were the pros and cons on that? Did you get a lot of views on it? Were you offering at a higher price point than the other ones? Why was it offered higher, or why was it offered lower? You asked all those specific questions. That being said, when you first enter that product into a demographic or into a specific location, of course, it's on a hot sheet, you want to know what it does and what it doesn't do. If you're going to offer to the members and say, California, is it going to be a turkey sausage? Is it going to be a beef sausage? Is it going to be 100% beef, 100% chicken? What ingredients does it have? Does it have extra specific spices blends to it? Is it hot? Is it a mild sausage? You're looking at that. What we look at the package size, is the package going to be a bigger offering because it's a bulk item and it's a Costco. Is the member going to get more for its money? Those are the avenues. Then you're looking at 60, 90 SKU optimisation or SKU traction, so it becomes on a hot sheet. You're looking at the activity that it's going to drive forward. Maybe it's a location that we need to put on an end cap specifically. Why? Is it a wrong time or right place to right product? You're looking at the three Ps on that. That being said, there are a lot of questions and concerns.

Client [00:24:46]: Is there no other specific number that you're looking at to know if a SKU will get delisted?

Expert [00:24:58]: No, we're not looking at a high SKU. We're looking at a SKU that's going to be is it competitiveness at a price point level that it's going to be comparable to the competition. The price point has got to be there. We're not looking at a specific dollar amount if it hasn't been at the location specifically. It doesn't meet the demand that was agreed upon. Say if it's not going to agree upon, I don't know, one million pounds, say one million pounds. It's not going to reach one million pounds and USD 6m within 90-day cycle probably will be picked up on the manufacturer's time and day for available to pick up. Everything is negotiated prior to be put on the sales floor.

Client [00:26:14]: Will you set up targets at the beginning of a trial period?

Expert [00:26:17]: Correct. All that's displayed, you're looking at negotiated contracts, delivery times, price points, availability on manufactured coupons, advertisements, displayed items and how many flavour offerings is it going to be? All that's upon the first negotiation process start-up.

Client [00:26:57]: How about once it's in a regular assortment? When would you delist something?

Expert [00:27:05]: If it hasn't moved, if it's already plateaued and it's not receiving upward movement on sales, it's pulled immediately and for the manufacturer to pick it up. It's put in the back. It's not even out on display anymore. If we see it not being moved and there's no moving forward with the sales, it's immediately pulled and put back either store level or in the distribution centre for immediately to be picked up.

Client [00:27:45]: Is that more of a Costco thing?

Expert [00:27:49]: It could be more of a Costco thing.

00:28:01] How do you figure out if the product has plateaued, where it's selling the same every week? It doesn't sound bad if it's high. Is that right?

Expert [00:28:11]: Yes, if it's going down and if there's no demand on it, of course, everything is tracked through AS400 through ERPs. There's always traceability as far as that goes. We see vision, real-life vision. Then we have a four-week inventory cycle. We can see daily movement. We can even go 2-30-minute increments.

Client [00:28:43]: How do you decide if something is going down because it changes a lot between weeks. Looking at processed meat, you've got grilling season, which is up for 4th of July and down in October. How do you factor that in?

Expert [00:29:05]: Of course, we're looking at sales. We're looking at time of the year. We're looking at everything. Meat Department usually does 10-12% of stores, store in general. If it's a decline in sales in the store level, then everything is already set for. If it's time of the year, if it's a sales decrease, everything is already set in motion. If the store does bad, of course, everything else does bad.

00:29:56] How are you looking for premium products in the processed meat space? How do you decide how much space to give premium products vs Hillshire? You discussed Aidells vs Hillshire. Is that how one should think about premium? Amylu is premium as well.

Expert [00:30:15]: They're premium. I consider them a premium product. Premium product will be, of course, not the price point atmosphere. It could be ingredient. How much shelf space, we try to be fair at the start to allocate a certain amount of shelving space to each. There will be two facings for each. That being said, a small section for premium products. We don't have a case structure or a structure for assortments or assorted products. We try to fade in as much as possible. That being said, there's not a five-foot for Aidells and a six-foot for Amylus. We try to be fair and have a two for two specifically, two facings of each representation of an item. It could be two Aidells and two Amylus. Then, of course, bolt-on will be on a specific offering. There's no favouritism or no slotting involved specifically.

00:31:43] How does the slotting work? Do you try to charge and the players pay?

Expert [00:31:52]: Slotting, I can't go into specific numbers, but slotting is when the manufacturer pays for shelving space. That being said, we try to be fair to all of them. We don't try not to discriminate. Of course, there will be favouritism, monopoly and everything else will be involved, fair trade infringement, all that specific will be involved. We're always fair. That's how it works. There's no buddy system. There's no favouritism. There's nothing like that, specifically. Everything is on paper. Everything is traceable in that aspect. Of course, COOL labelling, if you're familiar with COOL labelling, country of origin traceability through lot and through manufacture from where it's processed, where it's packaged and where it's sold. They want traceability of everything now coming into legislation. We're familiar with cool labelling, it's going to be on everything that has to do with meat specifically.

00:33:27] Were there any other brands besides Aidells that did well in California? Which players came and went?

Expert [00:33:46]: Come and go, if you are familiar with Juanita's, they're more of a sausage also, but they're more of a Hispanic Reynaldo's, if you're familiar with them. They've came and gone too, if you're familiar with them. It's more of a Hispanic following. It's a premium product that they did have a sausage, but it's more after the Hispanic clientele more than anything.

00:34:30] How about different proteins? Aidells has a lot of chicken sausage. In the Northeast, there's more pork. Did you pay attention to how you would assort different proteins and which one did better?

Expert [00:34:47]: How do I say this? We're trying to being somewhat fair of where we put certain items like certain cultures and certain ethnicities do not like pork, and they think that it's a different beast, so to speak. We try not to put pork next to lamb, but it has got nothing to do with sausage specifically, no. Are you familiar with it?

Client [00:35:34]: You'll be thinking about brands because there's beef sausage, chicken sausage and pork sausage that you try not to put next to each other, but (talking over each other).

Expert [00:35:46]: Yes, we try not to put pork. We separate and segregate certain species, of course. We understand the brands, but we try to put all the segregated, say, pork together. We try to put all the beef together, all the proteins together specifically so that they're more competitive and they're more reachable for the consumer.

00:36:22] What do you think about Al Fresco?

Expert [00:36:27]: I think they're a great company. They're more competitive to Amylu than anything, I would say. They're a great product. They're considered a premium product.

Client [00:36:48]: Is it the same as Amylu? I thought it had a different protein and different packaging. Do you think of them as similar or competing products?

Expert [00:36:58]: They're somewhat similar. I wouldn't say they're identical, but we consider them a premium product specifically. They do have a chicken line if I'm familiar with them. Amylu does have a chicken line. That being said, there's usually a following.

00:37:21] Aidells has a chicken apple product, and that's core to Al Fresco as well. How do you think about the packaging? Amylu is different. It's got purple on the packaging, which is unusual in the category.

Expert [00:37:44]: I would say their packaging is always well. They're vibrant, shall I say, but they have a following. They have a loyalty as far as their demographic and their age following. It's more of a specific age group following specifically.

Client [00:38:07]: Which age group is that?

Expert [00:38:10]: We consider somewhat of a gen Z-er, like a 30-ish range.

Client [00:38:20]: Are you talking about Amylu?

Expert [00:38:23]: Yes.

Client [00:38:24]: Do you assort any of them, or is that too premium to have?

Expert [00:38:33]: There's some, but not much Amylu's. Aidells a little bit, not much. I would say, if I recall, there are maybe three, if not two. I don't know anything specifically. That being said, I know there's two, if I recall, but they're more of a premium product.

Client [00:39:52]: Do you have a private label programme?

Expert [00:39:59]: There are co-packers that we specifically have.

00:41:03] Did you have any private label at Kirkland? What was Kirkland's presence in your category?

Expert [00:41:12]: Kirkland and Kirkland Signature is usually private label. There's no Johnsonville or anything like that. We do offer Johnsonville, but it's only like one facing or two facings, but it's more of our own Kirkland Signature. Costco has its own plants. We do process a lot of our own stuff. That being said or used to, I would say, Costco bought an old Pilgrim Farms chicken hatchery in Nebraska.

Client [00:42:06]: Is that similar to three packs of ground beef?

Expert [00:42:09]: We talked about that.

Client [00:42:13]: Are these processed by Costco-owned plants?

Expert [00:42:17]: There's a Costco. There's a plant in Tracy, California. We're talking about the three-pound saddle packs? If you're familiar with those, Costco has its own ground beef plants in Tracy, California. I can tell you everything about Costco.

00:42:58] Could you discuss Costco's sausages?

Expert [00:43:05]: Costco has its own. That being said, we have our own chub sausage. We have our own hot dog. We have our own facilities as far as our co-packer. I procure the raw products for the co-packers specifically to cut down on out-gouging or raw material grab as far as that goes. We do produce our raw materials for our co-packers to pack our private label, beneficial for the company's P&L. That includes everything from hot dogs to everything to chub sausage, to rope sausage, nothing specifically for speciality. When you go Amylu, Aidells or anything like that, it's more of a speciality product. They rather go to the speciality manufacturers to supply their product. Is there slotting involved? Yes, sir, there is. Is there a demographic watch, SKU watch? A specific 60-90 or 30-60-90 SKU optimisation to either add or subtract? Yes. Is there an offering for certain products per demographic? Yes, there is.

00:45:40] What did I not ask you about processed meat at Costco that I should have?

Expert [00:45:51]: If it doesn't do well at Costco, it's hard to bring back the manufacturer for a newer product because we already know it doesn't do well or something is not right. If they're recalled items, of course, they're going to be a manufacturer watch. If there's a disruption in the supply chain, so they're not going to be fulfilling their SKUs or their items, they're going to be on a manufacturer watch. Say if you cannot fulfil the demand that Costco drives and demands from the supplier or the manufacturer, there's no point of moving or negotiating their contract going forward.

Client [00:47:11]: If they fail, it's hard to get back in.

Expert [00:47:19]: Yes, it's make it or break it kind of a deal. There's a lot of leeway Costco does offer to the manufacturers. Labour disruption is somewhat a manufacturer watch, but if it's a recall, pain point logistics, that's almost a no going forward into a Costco. If Costco orders 20 tonnes of a specific brand of sausage, you could fulfil it once, but you cannot continuously fulfil it. That's a no-go with Costco. That happens a lot, to be honest, because they'll say, yes, and they do deliver on the yes, but then continuously deliver that tonnage and especially as it grows with Costco, there's no point of having that manufacturer back in the door because they cannot fulfil their agreement, and it happens quite often.

Client [00:48:37]: It has strict delivery times. I understand for the manufacturer (talking over each other).

Expert [00:48:47]: There's a schedule of delivery and a cycle period that they do have to deliver on those cycle times and the cycle deliveries. If they can't fulfil it, it's a good business practice, they can't fulfil it and they cannot do good business going forward with Costco specifically. Callbacks, recalls, it's very hard for a small manufacturer. If they can't deliver, it's hard to say no to money to a manufacturer or to a member that says they want to buy it, we can offer it.

Client [00:49:58]: Could you discuss lamb products? Do you have that?

Expert [00:50:08]: There's a co-op. Lamb, it's called Lamb Co. I think they have farms that actually provide lamb for the Lamb Co under one umbrella, under one label. It's called the Lamb Co.

Client [00:50:32]: Good name for it. You know what they sell at least.