from the hip Retailers have become very sensitive to negative perceptions of their products
Marketing a product at retail is much more than just offering great value or a sense of entitlement. It is providing the buyer with an opportunity to relate to the product through the story behind it. To understand what works for retail, especially in beef, we first must appreciate what today’s consumer will not tolerate.
Animal welfare is holding position as the No. 1 consideration when buying products from food animals. Today’s consumers have little and often zero tolerance for cages and crates. We can look over the fence at the poultry and swine industry and say that maybe they should do something about that, but it is more of a problem in beef production than we give it credit for. Increasing awareness and photographic evidence of beef in confined feeding operations has consumers on edge. They don’t like what they see nor are they convinced it is the right thing to do.
I was recently asked to describe the perfect cattle-feeding scenario and was unable to do so. It is complex because of the economics, yet its a very important question. Two things come immediately to mind — pen density and ration composition. We know that cattle do better in very small pens of 20 or so, such as a research pen. We also know they do well in large, light-density pens. Neither design is used extensively, even though critics liken the feedlot pen to the cage or farrowing crate.
The fact that most feedlot finishing rations are 80 per cent energy and some are now close to 100 per cent is seen as unnatural and tied to a host of disease-management issues. This diet is astounding to “foodies,” who believe that cattle should be on forage at all times. Their concept of wholesome beef is one of cattle raised on grass and out in the open. They cannot be fooled.
Young adults in focus groups do not believe that most of the beef animal’s life is out on the field. They know it is in the feedlot and they do not agree with that way of production.
Will they pay extra?
The question most asked is whether consumers will pay for product that is raised without pen, crate or cage. The answer is yes! They will pay up to 20 per cent more. The Whole Foods retail chain has proven it and food service is demanding it. Poultry and swine have some tight timelines to conform to if they want to sell domestic and international product, and beef will be next. This change will be dictated to retail by consumers who will pass on the news to the beef sector.
Consumers are also concerned about additives and processes. The perfect example of this is the pink slime debate. Lean finely textured beef is treated with ammonium hydroxide and resold in U.S. food products. The YouTube video by Jamie Oliver that exposed pink slime in early 2011 became a global obsession within days and shut down three processing plants. A thousand jobs were lost, and it cost the U.S. industry 25 per cent of its ground beef market.
To say that buyers of food do not know and do not care is simply not true. They want to know how the product was created and care very much about the process. Consumers either do not want these types of products on the shelf or at the very least have an expectation that they will be labelled correctly and are scrutinizing processing companies and retail outlets.
Antimicrobial use is a growing concern and is being played heavily by anti-use groups. At the centre of the debate is not so much that animals are treated, but that humans and animals are becoming resistant to the drugs used. Although there is no current evidence tying antimicrobial resistance in humans to antimicrobial use in animals, there is an assumed connection by the public. A recent poll indicates that 86 per cent of the buying public wants to have non-treated beef as an option at the store shelf. That speaks volumes to a retailer who is trying to increase traffic at the meat case.
The broader driver for consumers is their individual core values. If they believe that someone in the process has been wronged, they will react. In 2009, meat packer JBS agreed to both civil and legal arrangements in South America in which they would not buy cattle from deforested land, indigenous territories or from properties that were blacklisted because of the use of slavery. This month, Greenpeace publicly claimed that JBS had failed those agreements with the purchase of 687 cattle and alleged they also broke the trust on an additional 7,100 head.
The result was instant. Tesco, the world’s largest retailer, and three other food retailers from the UK, one from The Netherlands, and Swedish-based IKEA all cancelled their contracts for meat or leather from JBS. Why did retailers care? Because they knew the consumer would not tolerate such disregard to protect the environment. The chances of them buying meat sourced from JBS would be slim at best.
In this very transparent world, there is little wiggle room and even less forgiveness from the consumer. And it is this consumer from which all our wealth comes from. That is why what we do is so important at retail.