Wednesday, June 15, 2016

Beef Improvement Federation 2016: Beef as a consumer driven food business: Changing perspectives from cattle to food production

Dr. John Stika
Certified Angus Beef

Sometimes we think about beef production from a cow based focused. We think about our brand, the brand on the side of our cattle. Stika states we have seen a shift toward thinking about branded beef programs.

Stika states, "The only sustainable flow of dollars from which to continue to build the beef business comes from the consumer." Sometimes we see a bull sell for high dollars, and we hear questions about if that was "real money." The dollars that come from consumers is absolutely real money.

CAB's pull-through strategy:

  • Exceed consumer expectations
  • Build repeat business
  • create benefit across the entire chain
  • Strengthen demand for beef (increase supply and price at the same time)
When consumers make purchase choices, taste is still king.

The comparative retail price of beef is increasing relative to poultry and pork. To keep consumers happy, we have to provide them with better beef. Would you buy the same truck for a higher price? No. Would you buy a better truck for a higher price? Yes.

Demand for Certified Angus Beef has grown by 98% since 2009. Despite a weak economy and reduced cow numbers, sales of Certified Angus Beef increased over this time.

Branded beef programs continue to grow. 

There has been a $8 to $10 spread in choice vs select. There has been a $7 to $15 spread in choice vs high choice.

A high quality carcass is the most valuable thing we produce, but it is the last thing we get paid for. But, cow-calf producers get paid for cattle that do their job by adapting to the environment, producing a calf, and having that calf grow. But, we can do it both! We can select cows that do their job and produce a calf that does his job on the rail and on the plate. 

Consumers are not ignorant.
For consumers, trust and transparency are tops and the story matters. Buying beef is an economic decision made with emotion. We need to approach consumers from an emotional perspective.


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