Beef producers and manufacturers are putting a move on innovative chicken marketers. For the past eight years, they've worked to break down the barriers created by tradition, creating new and interesting retail products and re-establishing beef as the meat consumers love.
For example, new cuts from the beef chuck, created and marketed through efforts supported by the $1/head beef checkoff program, have extraordinarily impacted beef carcass value. Cattle-Fax analysis shows the increase in value of the chuck primal since 1998 has meant $75 more to each animal sold.
“It's difficult to isolate just one part of the animal,” says Cattle-Fax analyst Mike Miller. “But the chuck is 29% of the carcass by weight. It would be hard to argue new products from the chuck haven't had an impact.”
Miller notes Choice chuck value was at a record high in 2006, having increased 60% since 1998. That compares with a 45% increase for the rest of the carcass.
Valued value cuts
Isolation and development of the Flat Iron Steak and the Ranch Cut, among other new single-muscle chuck cuts, is one reason for this success, Miller believes. These and other Beef Value Cuts are available in more than 20,000 foodservice outlets and 5,000 retail stores nationwide.
Increasing recognition of these cuts by shoppers across the country is pulling demand through the system, says Kari Underly of Range, Inc., a Chicago-based, meat marketing consulting firm.
“That's why manufacturers are continuing to invest (in new product development) — because they're getting the requests,” she says.
Underly says retailers are asking their suppliers for the current Value Cuts — and more.
“They're now talking about other single-muscle cuts” besides the Flat Iron and Ranch Cut, she says. Because existing Value Cuts are becoming increasingly scarce, those requests come up at almost all presentations she makes to retailers, she adds.
Items now being studied through the beef checkoff for their potential are the chuck roll and the knuckle, according to Ellen Gibson, National Cattlemen's Beef Association (NCBA) executive director of new product initiatives, which manages the checkoff's new product development on behalf of the Cattlemen's Beef Board (CBB). Research into these muscles includes product evaluation and methods for cut enhancement.
But focusing solely on these products isn't enough, Gibson says. The industry must work harder to lead the pack when it comes to new product creation.
“New products have to be unique and superior,” Gibson says. “That's not easy.”
Gibson says looking at what other beef companies are doing and emulating their products won't take the industry far enough.
“‘Me too’ products compete on price, and then become a commodity,” she adds. “So then, consumers purchase the cheapest product. If a company delivers unique benefits and product value to consumers, it's a win-win for both.”
Make it snappy
Convenience has been the primary cry over the past eight years, says Underly, who worked her way through college as a meat cutter.
“The convenience side isn't going away,” she says. “Companies are also getting better at upgrading the quality of (convenience) products getting to the retail counter.”
Some retail convenience, Underly says, is presented through the frozen meat case.
“With the success of the chicken IQF (individually quick frozen) program, retailers are starting to welcome the new beef items,” she says. “It goes back to that convenience factor again.”
Underly says frozen staples such as steaks and kabobs — and other pre-packaged beef products, such as flank steak pinwheels, which are prepared before shipping to retailers — are evidence that convenience remains paramount. And it isn't just convenience that's being well received.
“Retailers today are labor-conscious,” Underly says. “They're trying to take that step out of their own process” and have manufacturers do the work.
Another new-product niche, Underly says, is natural and organic meats. Retail continues to see growth in these areas — as well as in niche outlets for these meats, such as Whole Foods Markets and others. In fact, Wal-Mart, the world's largest retailer, announced in early March its intention to double its organic product selection.
Jack Allen, Michigan State University emeritus professor of food marketing, agrees there's a growing natural and organic foods segment, and it's creating new opportunities for beef producers. He also sees packers doing more of the work through case-ready products. The impetus for these changes, however, isn't all in consumer demand. It's also in competition.
The Wal-Mart effect
“The dominant role of Wal-Mart has increased the incentive for other retailers to differentiate themselves,” says Allen, who closely follows meat retail trends. “Wal-Mart is setting the pace, reducing prices and saying ‘this is the way we (as an industry) will be.’
“The idea for other retailers is ‘change or I don't survive.’ That's strong motivation,” he says.
Allen adds there's a “quicker pace of change” in the retail meat industry today. And there are significant opportunities for the meat industry to create a stronger presence at retail (see sidebar).
One way a stronger presence will be created is through a long-range plan for creating new products, Gibson says. In June, NCBA, through its checkoff contract with the CBB, will begin development of a “roadmap” to guide checkoff-funded new product development efforts over the next three to five years. The roadmap will have input by producers, packers and processors, as well as retail, foodservice and packaging experts, and look at new products from an industry-wide perspective.
Also instituted will be a product-development process to create a more effective and efficient procedure for conducting new product efforts, Gibson says.
“It will help us use resources wisely and guide us in working on the right products for the industry,” she says.
Walt Barnhart is president of Carnivore Communications LLC, Littleton, CO, and has worked with the livestock and meat industry for more than 30 years.
Steps for demand growth
Jack Allen, Michigan State University emeritus professor of food marketing, believes the beef industry — to take advantage of growing opportunities at retail — must take things to the next level. That requires at least two steps, he says.
The first is “there's still far too much external fat in beef marketed at retail,” Allen says. He says producers and retailers have made good strides in this area, reducing fat by about 20% at retail since the 1970s. That's thanks primarily to a bold industry campaign to call for greater trim of external fat at retail, from ½-in., to ¼-in., to ⅛-in.
But consumers are still confronted by more fat than they want, Allen says, especially in premium cuts. It represents a perception and economic challenge producers must address, he adds.
The second step is retailers' adoption of a “meal approach” in their produce and meat departments.
“The meat and produce industries need to blend products at retail to have a more complete, seamless weave,” Allen says. What's critically needed is a strategic alliance between the meat and produce industries to develop a plan for encouraging implementation at retail.
Allen suggests checkoff leaders help lead a charge for improved store design and promotion in the meat and produce departments, making them more shopper- and meal-oriented, and gaining more attention from customers looking to purchase their perishables conveniently and logically.
“Looking to the future, we need to determine what can move the needle up in demand for beef,” Allen says. “So far, we've taken some evolutionary steps, and that's terrific. The next steps will need to be more revolutionary.”