If there was an easy to make money in the beef industry everyone would do it, right? But could there a way to add value to existing beef markets rather than constantly seeking new ones?
Speaking at ONE18, food marketing guru Kathryn Britton said that primary producers should capitalise more on specialist consumer demands.
Layering programmes
Britton, who is the senior director of operations and marketing at Where Food Comes From, said: “An opportunity isn’t infinite. We are either always waiting for the next opportunity, or we just missed an opportunity in the marketplace.
“It’s similar when we talk about these value-added programmes. We want to try to layer them to maximise our value and take advantage of that opportunity when that arises.”
One way, she said, was to look at the carcase and decide to maximise utility.
A second way, she said was that consumer demands for reduced antibiotics and hormones, higher animal welfare, age, cuts, nutrition and particular sources could all form the basis for value opportunities.
“They are all driven by different market factors,” she said. “What’s active today in the US marketplace are drivers for animal welfare and use of hormones.”
Britton explained that already, the demands are putting certain producers’ beef at a much higher premium in the US.
Working with brands
“We have Wendy’s coming out today saying by 2019 they are going to sourcing 100% of their beef from BQA [Beef Quality Assurance] trained feedlots.
“BQA is the base animal handling and care and management system of the US beef industry. It’s a voluntary system which are beef industry are operating today – but Wendy’s is going one step further and saying, ‘I want to see that certificate. I want to know that this operation has been trained’.
“This is one example of how animal welfare is driving an ask from a brand with over 6,500 stores – that’s a lot of beef that they will buy, and I bet if they ask for it, beef producers are going to do it.”
Price differential
Britton said that beef from the Non-Hormone Treated Cattle (NHTC) Program had been offering a premium of $8-10 per 100lb.
Per head, she said cattle which were in the NHTC programme were fetching on average $150 more and those on the Natural Verified programme an average of $200 more.
When you add quality grades you are almost doubling your money – your premium money. This isn’t your price; this is just the premium on top of your price.
“By participating you are opening doors and gaining access to opportunities and they should be paying for themselves,” she said.
