Camera Grading: As described in my previous column, one the beef industry’s talkers recently described camera grading as:
“…the biggest farce in the industry right now…the consumers don’t know the difference so we’ll continue to take advantage of them. In the long run it’s going to hurt demand for beef because the people are not getting what they’re paid for…”
The column addressed improvement in grading consistency over time. Now we need to address the consumer aspect.
Consumer Perception: Sure, most consumers aren’t likely to understand the nuances of marbling scores and/or quality grades. But they do know what they like! (see Marbling Is The Anchor)
Dr. Daryl Tatum provides a definitive overview of that reality. Increased marbling improves the probability of purchasing a favorable product while avoiding risk of a negative eating experience. (see graph).
Tatum makes these observations about consumers (along with my interjection re the claim above). Note that Tatum’s white paper was printed in 2015, these are even more tangible today – and all point to the fact they indeed know the difference:
- “…as beef has become more expensive, beef consumers have become increasingly discriminating with respect to quality and value…”
- “…and have demonstrated a willingness to “trade up”, paying premium prices to obtain the kinds of beef products and eating experiences they desire.”
- “Recent demand trends suggest that many quality conscious beef consumers are unwilling to pay today’s prices for the level of performance provided by commodity beef…”
- “…and, instead, have opted to trade-up, purchasing premium beef products, thereby improving their odds of receiving a level of performance commensurate with the higher prices they are required to pay.”
(For more on the influence of de-commoditization see Producer Investment Deserves Straight Talk.)
Beef IS Winning: Now to the business. The most recent data from 210 Analytics (Anne-Marie Roerink) is significant (outlined in the table below).
Total meat sales through April are up $2.21 B. Then note the line below: beef sales increased $2.28 B over the past year. That is, beef (function of both higher volume and price) accounts for all the meat case’s growth (even compensating for some of the categorical losers). And all the while, consumers are especially cranky about food inflation thus providing them every reason, excuse, and/or opportunity to trade down. That’s not happening.
More Of The Right Supply: IF the camera isn’t working (i.e. “farce”), THEN there’s bound to be sketchy product selling at premium prices AND buyers would be squawking about inconsistencies and/or deficiencies going into the box.
All that would be further fueled by customer complaints. You can only cheat consumers once (or maybe twice) before they start walking away from the product. They’ll smoke you out right quick.
And there’s been plenty of opportunity for it to go wrong. Between 2010-thru-2023 over 333 M head of fed cattle have gone past the grading stand representing more than 285 BILLION POUNDS of beef. And yet, consumers aren’t walking away.
Following my previous column, Bruce Cobb (Executive VP Production, Certified Angus Beef) emailed his perspective related to grading integrity and its relationship to consumer trust and loyalty (emphasis mine):
Consumers expect quality and consistency and Certified Angus Beef is built on both of those attributes. The grading system is a tool to help us achieve that objective. We need more of the right supply in a CAB box. The right supply is defined as product that fits CAB standards and specs. We certainly do not want just any supply going into a CAB box.
Beef is gaining market share because there’s more of the right supply (see Yardstick of Quality) – not because of some conspiratorial “farce”.
Nevil Speer is an independent consultant based in Bowling Green, KY. The views and opinions expressed herein do not reflect, nor are associated with in any manner, any client or business relationship. He can be reached at nevil.speer@turkeytrack.biz.
