What is in this article?:
A brand is only a brand if it delivers on the promise to consumers every time. Industry experts take a look at the future of beef industry alliances.
“We can’t be a commodity competing with the vertically aligned systems in the pork and poultry industries,” says James Herring, president and CEO of Friona Industries LP, based at Amarillo, TX. “It’s not sustainable, and the sooner we understand that as an industry, the better off we’ll be.”
That’s why Herring believes the alliance concept must grow in the beef industry.
For a definition of beef industry alliances, think in terms of two or more beef industry sectors working together in order to provide consumers with more value. Implicit in this definition is the notion that folks participating in these alliances must derive more benefit than cost; otherwise, they wouldn’t participate.
Alliances take flight
The alliance concept took flight in the beef industry with the Strategic Alliances Field Study in 1993. It was undertaken to determine how much of the estimated $280/head of fed cattle — identified in the 1991 National Quality Beef Audit — could be recovered if industry segments worked together more closely. The savings revealed by the study were significant, including $43.50/head by doing things that improved beef quality, consistency and competitiveness, as well $31/head saved in feeding costs.
Since then, a bevy of players and pretenders have operated beneath a variety of alliance banners. They’ve come, gone, morphed, succeeded, failed, and become so enmeshed within the business fabric of the industry that they’re often taken for granted, if recognized at all.
Of the public, carcass-based programs in this year’s BEEF alliance listings, the 11 sharing volume accounted for about 3.4 million total head in 2012. The average premiums ranged from $20 to $175/head. The cost of participation ranged from free to a one-time membership fee of $3,000, plus an annual marketing fee.