Opportunity For Beef Progress Continues

To those raising beef, this year’s opportunities might look similar to the past. But for those in the business of selling the protein? The horizon looks quite different.

More than 1,100 people from 27 countries gathered online for the Certified Angus Beef ® (CAB®) Annual Conference last week, a record attendance for the event, to explore the possibilities.

Ranchers, meat packers, distributors, grocers and restaurateurs together in a virtual room made the supply chain feel smaller, each seeking go-to-market strategies to deliver high-quality beef to consumers.

“As we look at the COVID-19 impact, it hasn’t necessarily changed consumer demand for quality beef,” said John Stika, CAB president. “It just changed dramatically where and how they look to access it.”

Even with a pandemic recession about, the brand will end 2020 with more than a billion pounds sold.

“You have to be amazed, when you think of what we've gone through, that demand would stay this strong,” said Randy Blach, CEO of CattleFax. “And we've done it basically with one hand tied behind our backs.”

When public health ordinances shifted diners from foodservice to retail, it created one positive unintended consequence: consumers got more comfortable in the kitchen.

This creates retail opportunity, said Chris Dubois, senior vice president of protein for data analysis firm IRI. He encouraged marketers to marry tools with sales to keep beef at the top of the grocery list. CAB offers Roast Perfect, an app that shares how-tos, recipes and cooking inspiration.

Dubois said online food sales grew 50% to 60% this year, while meat e-commerce doubled.

“The retailers, processors and packers who get e-commerce right are going to have more success than those who ignore the trend,” he said. “This is where you’re really going to see the separation in the next three years.”

International business is slowly gaining momentum again, after an optimistic start to 2020.

“We feel like the fundamental demand for U.S. beef has remained quite strong in our key markets,” said Joe Schuele, vice president of communications for the U.S. Meat Export Federation. “For the global meat trade, especially high-end products to reach full potential, we need to return to normal economic activity.”

The brand continues to grow relationships, and highlighted personalized marketing tools such as French and Japanese versions of its logo and a new website for Spanish-speaking consumers, CertifiedAngusBeef.lat.

The CAB Prime brand extension offers another growth opportunity.

 “Is there enough high-quality Prime in the marketplace to build a business around?” Blach asked. “The resounding answer is yes.”

Prime beef production used make up only 2% to 3% of beef, but now makes up nearly 10% of the annual supply from fed cattle, or 2.6 million Prime carcasses.

In the past two decades, beef’s market share of consumer spending also grew. It makes up nearly half of the dollars spent on proteins compared to 40% in 1999.

Building on that momentum, CAB launched its consumer loyalty program in February. Steakholder Rewards™ invites customers to interact with the brand and earn rewards for beef purchases.  

While the foodservice division works harder than ever to sell much less, CAB facilitated discussions on keeping quality while cutting costs, offering up ideas such as live training, menu ideation and using value-added products.

“When I look at what the people are doing to drive their businesses forward during difficult times, whether cattlemen or restaurateurs, it’s really exciting,” Stika says. “And we’re just glad to be alongside them, helping to drive momentum.”

Remaining relevant in an ever-changing marketplace requires adaptation. Attendees learned about updates to the brand specifications and sustainability initiatives. CAB honored five cattle businesses for their commitment to quality, including the first-ever sustainability award, and they celebrate success in each segment of the business.

“This brand was started to create value for everyone that produces and touches it through the production and merchandising chain,” Stika said. “As I look at where we’re at today, I think we’ve been able to re-center on the things that are important to ensuring value moving forward for our partners.”