Cuts from the loin, sirloin, and rib “help keep the lights on” for Canada’s beef industry, but it needs niche markets to capture value from the whole beef carcass, says Canada Beef’s director of North American market development.
“The middle meats are obviously highly valuable, but they only make up a certain percentage of the entire beef carcass,” said Marty Carpenter at the recent International Livestock Congress.
“We need to be able to extract value from each component of that carcass.”
Almost half of Canadian beef, worth $1.3 billion, was exported last year and it is critical to find the right market to maximize the value of each cut, he said.
“It’s a large amount of product, and we need to be able to access those markets and have the ability to maximize them,” he said. “Beef needs to find its niche within individual markets around the globe.”
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Right now, Canada’s single largest market for beef is — “believe it or not” — California, where the large Hispanic population leans toward cuts from the chuck and the clod that are undervalued in domestic markets.
“Hispanic consumers want food that they’re familiar with, and beef is one of those key items in their diet,” said Carpenter.
“The average U.S. Hispanic consumer will eat three times as much beef as the average Canadian consumer. You want to chase those kind of customers down.
“It certainly has huge volume potential for us with cuts that we don’t utilize here domestically.”
But there are opportunities to sell more products, such as Halal beef in Islamic countries and offal in Asian countries.
“That’s going to be a growth market for years to come, and we need to be able to… work with our clients in those markets to ensure we’re maximizing the opportunities within those emerging markets,” he said.
“It gets back to finding the right customer for the right cut.”
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Growing domestic demand
Despite the growing demand in emerging markets, Canada is still “our most important market,” said Carpenter.
“It’s the most loyal to the product, and certainly, Canadians love Canadian beef,” he said.
“It’s really important that we work to build understanding and momentum for Canadian beef right here at home.”
But Canada’s product mix is “relatively narrow.”
“Ground beef still does rule the meat case,” said Carpenter, adding that the affordability and approachability of ground beef has made it a staple for Canadian families.
But the face of Canadian families is changing, says an insider at one of Canada’s largest retail chains.
“Immigration continues to rise, and our population mix is shifting,” said Jamie Nelson, vice-president of retail operations for Overwaitea Food Group.
“Alberta, in fact, is Canada’s third-largest province for Asian immigration after B.C. and Ontario, with growth three times faster than the rest of Canada over the last decade. This is very significant.”
In 2011, Overwaitea piloted a new store design that would cater to Asian consumers in its store in Richmond, B.C., where three-quarters of the population is Asian.
“When it comes to developing sales through new and emerging trends, we’ve had a great deal of success with customized offerings in store,” he said of the “east meets west” store model Overwaitea developed.
Half of the store features imported Asian goods and a meat counter with cuts that Asian consumers prefer, while the other half has the traditional offerings that consumers can find in most western grocery stores.
“This is part of the new world of food retailing,” said Nelson. “We’ve been well accepted in this market, and sales are strong and growing.”
Retailers such as Overwaitea Food Group continue to adapt to the changing demands of consumers — “but satisfying the customer these days is getting more complicated all the time.”
“We know our traditional western customers are increasingly looking for smaller steak sizes but thicker cuts,” he said. “Make no mistake that in retail, it’s becoming increasingly challenging for us to deliver the beef products traditional western customers are looking for.”
Consumers are looking for cuts of beef that are “the right thickness, the right size, and the right price,” which all depends on the size of the animal.
“There’s a natural tension between what ranchers are bringing to market and what the largest majority of consumers is looking for,” said Nelson.
“Sales are naturally dropping, and we see this as a significant and continuing challenge as we move forward.”
Nelson urges a “co-ordinated approach” at all levels of the value chain to meet the demands of both traditional western customers and emerging niche markets.
“Times have definitely changed, and with them, we need to continue to change to deliver on what customers are asking for.”