I think it’s value. I really do. The product has performed.
foodservice distributor Merit Foods
Tucson, Ariz.-based foodservice distributor Merit Foods has half a century of history, but a new facility and an expanded product line added in 2008 started the company on a fast track toward growth – a pattern that continued last summer, when Merit entered a partnership with Canada’s Beef Information Centre to source product.
Since then, Merit’s beef sales volume has increased 30 per cent, according to General Manager Scott Butler. About 90 per cent of the company’s business is foodservice-related, but the Canadian product it sells also goes to further processors and retail stores, many of those Hispanic-focused. Butler expects Merit to post $27 million in sales this year, which would reflect double-digit sales growth compared with 2009.
Butler spoke with Meatingplace about Merit’s rising fortunes and the role Canadian beef has played in the company’s success. Q:What sorts of Canadian beef products have you been selling? What kinds of product characteristics are important to your customers?
A:We buy both (Canadian) AA (comparable to U. S. Select) and AAA (comparable to U. S. Choice). Whether the product goes to the markets or to the further processors, what they’re looking for is quality-to-price ratio. They’re looking for value.
If you’re buying from us, you can buy AA Canadian that is coming from better cattle, with more uniform size at about the same price point that you had been paying [for less-consistent U. S. product]. You get more predictable size, more predictable trim specs. You can get product that will be really consistently high quality at about the same price point that you can buy Select product from the plants around here.
Q:Why did you decide to partner with the Beef Information Centre? What concerns did you have, and how did you address them?
A:They approached us. We went to Canada and looked at some of the product, and the product looked really good.
I’ve bought Canadian product in the past. I knew Canadian product, and I liked it because you weren’t raising cattle to beat the heat. The cattle that you raise are northern breeds, and it’s a lot more consistent in the feedlots.
I was concerned about going out to customers and leading with the fact that we’re buying Canadian beef. When we started out, what we were trying to do was… lead with the fact that it’s a better product at a comparable price.
You have to get the customer in spite of themselves to just start trying something. We marketed Merit Foods. Merit Foods is who they know, and we’re their neighbours. Beef from Canada is not something that they’re going to say “oh, please, bring it in.” You have to bring it in. You have to have a lot of it. You have to have it at a price point that’s attractive to them. Then after they start using it, they say it’s good. Now you’ve got a receptive audience.
Q:Why do you believe selling Canadian beef has helped your business grow?
A:I think it’s value. I really do. The product has performed. It’s been really consistent. The trim specs have been great. The cattle are obviously of really good quality. The workmanship has been good. There’s been good availability.
Q:How do the price points of the Canadian products compare to U. S. alternatives you have?
A:They’re good, because of the way we’re buying and moving loads. It’s been a good value, and sometimes a little cheaper. The price has been really competitive, and the quality generally has been better. Q:What feedback have your customers given you about the Canadian product?
A:They like the trim specs; the trim specs are really good and really consistent. They like the quality of the beef.
We sell all kinds of grades. If the customer wants to buy it, then I’ll sell it. For us, even on the Select product, the Canadian product compares favourably with product from the upper Great Plains, which is where the best stuff comes from in our market. Our whole Select line has gone up in quality without going up in price.
Q:What do you expect from your partnership with BIC going forward, and how do you expect your sales of Canadian product to evolve?
A:As long as we’re getting the kind of supply, service, quality and value pricing that we’re getting, there’s no reason why our business won’t grow. Our business is going to grow anyway; we’re in a growing part of the country. It’ll grow with this product as long as everything is going like it’s going now.