During the September Operating Committee meeting held in Denver, Colo., 10 Cattlemen’s Beef Board members and 10 State Beef Council members that sit on the committee chose to increase retail marketing program funding by $100,000 in the area of national beef promotions and partnerships. This tactic aims to develop and execute retail promotions domestically that build consumer demand for beef by stimulating incremental consumer purchases of beef throughout the year. Good examples of these retail promotions include the Kraft A1 Steak Sauce in-store promotion, Anheuser-Busch holiday promotions and the middle meats promotions that took place during summer 2009.
Why the increase? To better understand, we need to take a look at the domestic retail landscape. Foodservice beef sales are down slightly since the recession, by just a point or two, but that point or two translates to some deep losses in the sector. In response, the checkoff has remained committed to targeting programs in order to stay on menus so, when consumers head back to white tablecloth restaurants, the industry won’t have to rebuild share.
Meanwhile, exports are flat. This equates to domestic retail being the primary market moving U.S. beef.
Retail volume is up, but retailers have dropped prices, and in turn margins, across the store in order to try to capture consumers. And, most of what is sold is as a result of feature advertising instead of usual retail prices. With beef already available at great prices, consumers also have given new meaning to “bargain hunting” – coupon redemptions are up 23 percent from the first six month of this year versus last year.
“The checkoff has taken note that consumers are cooking more at home and this provides an excellent opportunity to move more product through retail than in recent years to make sure there’s a market for our cattle,” says Manning, Iowa, cow/calf and seedstock producer Helen Wiese, Operating Committee member and chair of the industry’s retail committee. “All sectors of the industry are working together to promote beef – that’s a big benefit for us right now. Retailers are feeling the economic ‘crunch’ just like producers. But the good news for us is that for every dollar invested, our partners in the retail sector contribute between $5-10. That’s a large return on investment in an effort to sustain a market for our product.”
Retail marketing for 2010 will remain geared at moving middle meats, helping to keep the price point palatable for consumers and ensuring a market for U.S. beef.
“The investment we’ve made through the checkoff-funded muscle profiling study and in new product and culinary initiatives is still showing positive results,” says Wiese. “Look at how far we’ve come in adding value to the chuck. Now, retail programs are expanding on these results and keeping the momentum going by educating consumers and retailers. Producers should know and have confidence in the fact that we’ve seen a lot of success at retail in the last year and that’s why the Operating Committee found extra dollars in a tight budget to reaffirm that commitment to a program that’s helping build and maintain demand for beef.”
For more information about checkoff-funded retail programs, visit www.BeefRetail.org.