Deli suppliers vie for slice of market

Marketplace Staff Jan 11, 2010

Deli suppliers vie for slice of market

Marketplace Staff Jan 11, 2010


Steve Chiotakis: In a lot of industries, brand names rule. Cars, clothes, even ketchup. But it’s a tougher job to earn name recognition for, say, sandwich meat. Boars Head has built a billion-dollar business in large part by signing exclusive deli deals to market their meats. That includes signs, posters — the marketing works. Now the marketing war is getting ugly. And reporter Alex Goldmark investigates the big battle of the baloney.

Alex Goldmark: There’s only one way to order cold cuts here on 80th and York in Manhattan:

Customer One: Thinly sliced.

Customer Two: Very thin! It’s the only way.

Customer Three: Mortadella and prosciutto.

Customer Four: It has to be sliced thin!

Deli meats are serious business here at D’Agostino’s Supermarkets in New York. So fourth-generation owner Nick D’Agostino thought carefully when he decided not to go with Boar’s Head.

Nick D’Agostino: We have one prominent brand of deli meats we carry, Dietz and Watson, and we chose that ’cause it’s a good family company — they’re based out of Philadelphia, and so they’re local to us.

That mom-and-pop angle is exactly what Dietz and Watson has been pushing hard since the summer as part of a freedom of choice campaign to get supermarkets to drop their exclusive Boar’s Head deals. And competition is heating up. One distributor in upstate New York left this message on a Dietz and Watson voicemail:

Aggressive Voicemail: Hey Dietz and Watson: I dare you BLEEPers to come up here with your BLEEPing product. I’m a Boar’s Head guy. You bring your BLEEPing little BLEEPing circus up here, I’ll bury you BLEEPing guys.

Boars Head’s headquarters in Florida declined to comment. And the independent distributor in New York that left the message, according to caller ID, told me they don’t know anything about it and the owner there is “a mellow person who wouldn’t do something like that.” Either way, Dietz and Watson saw a marketing opportunity and jumped.

Here’s the editor of Deli Business Magazine, Jim Prevor:

Jim Prevor: I do think that that kind of bullying plays right into the hands of Dietz and Watson.

Who are trying to paint their competition as a corporate giant more than twice their size, throwing their muscle around and preventing diversity at the deli counter. But Prevor says that might not be enough to get supermarkets to make a change:

Prevor: Now the problem with all this issue is that it’s hard to motivate consumers to really, you know, man the ramparts and fight to the death for the brand of salami they can buy in the deli.

And most customers are happy with Boar’s Head. Well, as long as it’s thinly sliced.

Customer Jeanette Senko: Half a pound of sweet sopressata sliced very thin. And if you go over that’s fine. It’s bad, but I don’t care.

In New York, at the deli counter, I’m Alex Goldmark for Marketplace.

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