Beef as a consumer-driven food business:
Changing Perspectives from Cattle to Food Production
by Troy Smith, field editor
MANHATTAN, Kan. (June 15, 2016) — For most beef cattle producers, “reality” is comprised of what’s happening on and near their own farms and ranches. Reality is something different for a great majority of consumers. They see things from different perspectives. Cattle producers need to become more in tune with how consumers view beef and the ways it is produced. That’s reality.
John Stika explained the approach taken by quality-focused companies, like CAB, calling it a pull-through strategy that strives to exceed customer expectations and build repeat business, thus benefiting all segments of the supply chain by strengthening demand for the product.
John Stika, president of Certified Angus Beef LLC (CAB), shared that message with the audience gathered in Manhattan, Kan., for the 2016 Beef Improvement Federation (BIF) Annual Meeting and Symposium. The conference’s opening general session focused on opportunities for beef industry participants to become more efficient and more profitable. With that in mind, Stika stressed the fact that the only source of new money for the beef industry comes from beef-buying consumers.
Said Stika, “Consumers respond by spending real dollars; sending real signals indicating their preferences.”
He explained the approach taken by quality-focused companies, like CAB, calling it a pull-through strategy that strives to exceed customer expectations and build repeat business, thus benefiting all segments of the supply chain by strengthening demand for the product.
According to Stika, it’s to the industry’s advantage that a majority of consumers inherently like the taste of beef and are willing to pay for what they really like. He noted, however, that consumer purchases are influenced by price, relative to value. They will spend more for a product perceived to deliver more value for the money.
Stika said supplies of cattle qualified for the Certified Angus Beef® (CAB®) brand have grown, increasing total pounds of CAB product, which has sold at increasingly higher prices.
“Consumers perceive value relative to price and demand has grown,” said Stika. “When supplies and price increase at the same time, it puts you in a strong position.”
Stika said CAB is one of some 180 branded programs to focus on high-quality beef, and he believes this has helped drive increased production of carcasses grading USDA Choice or better.
Commenting on the growing consumer interest in where and how food is produced, Stika said that while many consumers may be naïve and not have a practical understanding of production practices, they are not stupid.
“They want to understand what we do and why, but consumers won’t blindly accept what they are told,” warned Stika, advising producers to be transparent and to engage with consumers, but to avoid responding to their questions and concerns with too much science. Buying beef is a decision that involves emotion, and producers are wise to remember that.
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