It was 2007 and for the first time in my life I walked into the grocery store to buy beef. Two thousand miles away from my Mitchell, S.D., ranch, I was on a summer internship in Washington, D.C. for the U.S. Department of Agriculture (USDA). No longer could I just swing open the freezer door and have everything from tenderloin to ground beef at my fingertips. I stood there overwhelmed.
Just like every consumer, I wanted to trust that the beef I was buying was safe, wholesome, tasty, and nutritious. While all meat is USDA inspected before it’s sold at a retail outlet, negative media headlines about beef—ranging from pink slime to mad cow disease to beef recalls—although not always factual, have stirred up enough doubt in consumers’ minds that they want and need to know more about the beef they are putting on their dinner plates. Consumers now want the complete pasture-to-plate story before they make their purchase. I had always known the story of my beef. Heck, we raised our burgers from birth. But standing by the fluorescent glow of the meat counter, I curiously found myself wanting to know more about the beef I was buying.
That summer, I ended up buying a lot of Laura’s Lean Beef; the company was known to purchase Limousin cattle, the same breed of cattle that my folks raise. In essence, I was looking for a particular story, and the story I wanted was something that mimicked what I was used to eating back home.
While I had no qualms about meat safety, I was further thrown into the typical consumer’s shoes by having to determine the right cut of beef for the appropriate meal I was making. I had to dig through the endless sea of labels and find one that interested me. Plus, I was on a college-kid budget, so I had to find one that satisfied my highly developed beef palate along with my very limited spending allowance.
My background and industry knowledge made that first hurdle manageable. Clearing the next hurdle, however, was not so simple.
I was an 18-year-old kid who grew up in a state where cows outnumber people four to one. My roommate at George Washington University was Meredith, a worldlier 21-year-old vegetarian from New Jersey. Wait, there are people out there who don’t eat meat?
Over the course of the summer, the stink from her veggie burgers was almost more than I could handle, but Meredith had seen a YouTube video of animal abuse on a California dairy farm, and she was convinced that all livestock producers mistreated their animals. Regardless of her disdain for beef, each day I would tell her a little bit more about my family, our cattle, and the beef at the grocery store. Little by little, she started to ask more questions.
Is it organic? Is it grass-fed? How about natural? Hormone-free? Antibiotic-free? Prime, Choice, or Select? Who raised it? What was the farmer like? What does this label mean? What’s the difference between a rib eye and a rump roast?
Being peppered with all of these questions definitely tested my own knowledge. After all, I had always taken for granted a freezer full of home-raised beef. I knew where it came from. I knew who raised it. I knew how the cattle were cared for. I loved the taste. It was my beef, and I was proud of it.
John Lundeen, executive director of market research for the National Cattlemen’s Beef Association (NCBA), is charged with reading the fickle tea leaves of consumer demand for the industry and reaching people like Meredith. He offered some insights on what his research is showing the consumer wants when shopping for beef.
“The biggest change I’ve seen in the meat case in the last decade is now the majority of beef is branded,” says Lundeen. “As soon as something is branded, you start to have a product that is different from the next one. Consumers who have certain preferences will lean toward one brand over another, thus creating brand loyalty. This brand loyalty opens the door for producers to make their beef stand out in the meat case.”
From coast to coast, there are beef producers finding their niche in the meat case. John-Scott Port started his own beef label, Clarion Farms Beef, in Clarion, Pa., as a part of a senior project in high school. The homework assignment quickly expanded to a butcher shop, farmers’ markets, and a demand so high that they usually sell out by the end of each week.
“Consumer outreach is everything,” Port explains. “There is some nasty stuff floating around out there about beef production and the people involved with it, and the only reason those types of things get started is because most consumers don’t associate actual people with food production anymore. Consumer interaction is the only way to make that connection again. If people have the opportunity to discover that it is indeed other people producing their beef, I think many of those horrendous assumptions about beef production would disappear.”
In Winfred, S.D., about 20 miles from my ranch, fellow Limousin breeder John Bruner has also created his own beef label, Dakota Natural Beef, with the slogan, “Premium Lean Limousin.” In addition to the breed distinction on the label, he also markets a lean product for the health-conscious shopper. His beef is carried in restaurants and grocery stores, and each weekend, his family drives to farmers’ markets to sell product.
In California, Matt Byrne of Tulelake markets his family’s beef label, SunFed Ranch, with the slogan, “Pure grass-fed beef ... Nourished by the sun.” The trendy label can be found at several stores in the area, and Byrne uses social media to promote his brand. On the SunFed Facebook page, fans can see photos of steaks on the grill, Byrne on a horse, cattle grazing on lush green grass and, fun graphics showing ways to cook different cuts of beef.
“SunFed Ranch is a label produced by three ranching families who have all been in the cattle business for 100-plus years,” says Byrne. “Looking at the marketplace, there are large and small players. As smaller players, we had an opportunity to explore more limited niches, so we had to identify a place in the market that would extend our cattle business but not change it. It’s really heartening to have the immediate feedback from customers on Facebook who say they appreciate what we are doing on the ranch. In generations past, we were a lot further from the customer; now we are much more connected.”
As these smaller outfits carve out a niche to tell their beef stories, the big boys have created a lot of brand loyalty in major retail outlets, as well. Familiar labels like Meyer Natural, Creekstone Farms, Certified Angus Beef, Certified Hereford Beef, Coleman Grassfed, Harris Ranch Beef, and Strauss Brand all have their own unique marketing techniques to try to reach different consumers and meet individual needs.
“Without a doubt, consumers want more of the beef story,” adds Lundeen. “Now, where is it going to go in the future? We’ve seen the rise of organic and natural, but what’s next? I bet the consumer will want a different set of criteria a couple of years from now. If producers can align their product with consumer’s needs, then that’s great.”
One ranch outfit, Lakeview Hutterite Colony near Lake Andes, S.D., is trying to get a jump on the next big trend: genetically modified organism (GMO)-free beef. On May 25, 2013, the “March Against Monsanto” was launched with events taking place on six continents in 36 countries, in over 250 cities. The March Against Monsanto is fighting for the right for consumers to vote with their dollars by buying organic foods while boycotting companies that use GMOs in their products. They seek to have GMOs labeled on all foods, so they can make educated buying decisions. Lakeview is in the process of releasing a GMO-free beef label in the hopes that consumers will be willing to pay a premium to know that the cattle that produce their beef were never fed GMO corn in their lifetimes.
Whether it’s GMO-free, organic, natural, grass-fed, or simply a desire to meet your farmer, every consumer is looking for something different. Yet, despite the heated rhetoric in the news calling for these unique production methods, Lundeen says the majority of consumers still buy conventionally raised beef.
Natural and organic beef only accounted for 4.1% of the total U.S. beef market share for 13 weeks ending on March 24. That means 95.9% of beef sold was conventionally raised or the standard store label offered in major retail outlets or restaurants. However, per pound sales of total beef has dropped 2.4% from this first quarter compared to the year before. Meanwhile, organic and natural sales have risen 0.4%, according to the same market research.
One problem the beef industry faces is internal bashing of one production practice over another. It’s common for organic or natural beef producers to claim superiority over conventionally raised beef, thus creating more doubt in the consumers’ minds about whether the store label is good for them.
However, Trevor Amen, NCBA’s director of B2B market intelligence, says that as more labels are created to reach consumer demands, it only makes the entire beef industry better.
“This competition between retailers, restaurants and different beef labels is very healthy for strengthening demand for beef,” Amen says. “Of course, competition is a very important part of this business—it will drive the retailer’s marketing strategy to have the best beef in town. It continues to add premiums.”
On conventionally raised beef, Lundeen is quick to point out that the consumer can feel confident they are getting a great product.
“Every retailer has to meet consumer needs, so their product is going to be high quality, no matter what the label,” says Lundeen. “I can’t see where the specialty meats are going to hurt the conventionally raised beef that is marked at a lower price, but it’s nice to have different options for the consumer to choose from. Price still drives a lot of folks, so budget-friendly beef is still going to be a priority for many when shopping.”
According to FreshLook Marketing and USDA Market News, “The average price per pound for beef increased versus a year ago (+2.5%) to $4.51/lb. The rise in beef is lower compared to the increase for chicken (+5.0%), while average pork prices decreased (-3.7%). The average price per pound for beef is running greater (+4.7%) than the same period from the prior year for the latest 52-week period.”
Competing proteins like pork and chicken are produced in a more vertically integrated manner, so the price points for these options are much lower than beef. Lundeen says that consumers are looking for a more economical product.
Another popular place to buy beef on a budget is fast food restaurants. During the 20-minute lunch break consumers might have during the workweek, a quick dash to a local McDonald’s is typical for many Americans.
McDonald’s—the U.S. beef industry’s biggest customer—is jumping on the pasture-to-plate trend that consumers are interested in. In early 2012, McDonald’s unveiled a new ad campaign featuring the farmers and ranchers who grow the beef, potatoes, and lettuce that goes into a McDonald’s cheeseburger and french fries.
Steve Foglesong, a rancher from Astoria, Ill., was interviewed for one of the McDonald’s advertisements as one of the company’s beef suppliers.
In the ad, Foglesong describes his life on the ranch and his passion for beef: “We are producing food for people around the world. It takes a lifetime to build a ranch, and that’s what we’ve been doing. It’s worked out pretty good for us. It’s a good place to raise a family. We take a great deal of pride in what we do here. Beef is what we do. The fact that we produce beef for McDonald’s is a big deal. They have a certain set of expectations that absolutely have to be met. You can’t get good taste without good quality—there’s no way to cut corners on that. As a parent and grandparent, it’s great to see those kids take an active part in it. One of these days, I’m going to ride off into the sunset, and it will be nice to know someone will carry on the tradition.”
Undoubtedly, Foglesong’s testimony has touched the hearts of Americans who want a quick meal on the go that they can feel good about, too. McDonald’s knows that their customer wants to know more about their burgers, and this ad campaign aims to answer some consumer questions.
While the advertisements have been wildly popular for McDonald’s in the United States, the company is taking a more digital approach in Australia. McDonald’s recently unveiled the “Track My Macca’s” app, which refers to the Australian nickname for McDonald’s. The app tracks the chain’s most popular menu items like the Big Mac. The app uses the customer’s location and a scanned barcode found on the side of the burger’s container, along with the date and time, to tell the user the source of the beef in their Big Mac. Users can then listen to the story of the farmer and rancher who supplied the ingredients for their lunchtime treat.
I asked my grandmother what she thought about “stories” on her meat label, and she laughed. After all, her generation made everything from scratch. They raised their own beef, grew their own gardens, made their own soaps, and sewed their own clothes. It was hard for Grandma to fathom the idea of scanning a barcode on a cheeseburger to find out where the ingredients came from, but times are changing.
The global population is expected to exceed 9 billion people by 2050. With that, the growing middle class means there are more people who have extra spending money to put meat on the dinner table, instead of just beans and rice. So while there are fewer of us in the beef industry, the scale that we must produce to continues to grow.
Pondering the complicated future of the beef industry almost makes my head spin. Sometimes I wish I could go back to being that 18-year-old naive farm kid, who took for granted the freezer full of beef that my dad raised. Now that I’m in the cattle business myself, I know that I have to think globally, as well as locally, to try and raise a safe, wholesome, high-quality product that will satisfy my friends and neighbors, as well as the daunting responsibility of feeding the rest of the world.
And if you’re wondering about Meredith—my vegetarian roommate in Washington D.C.—well, I may be a naive farm kid, but I’m nothing if not persistent. By the end of the summer, she had ditched her veggie burgers for beef. Now when she has questions about a negative headline in the news about ranchers, she doesn’t believe it at face value; now she asks me for more information. If we’re going to sell beef to the next generation, we have to earn their trust, and we have to be willing to tell our story. Anything less than that might get left on the shelves.