So what will it take to sustain the current momentum in beef demand? Some major shifts in market thought, inter-sector cooperation, commitment and plenty of dollars.
That's the message Bernie Hansen of Flint Hills Foods, Jonathan Rocke of RMH Foods and Chet England of Burger King carried to cattlemen attending the recent Range Beef Cow Symposium XVI in Greeley, CO.
But, the trio of food industry experts' message to cattlemen wasn't so much that "you're not doing enough" as an admission that "we all have to do more."
"If we don't understand and listen to what consumers are telling us, there won't be an industry for any of us," says Rocke, president and CEO of RMH Foods, Morton, IL, a firm specializing in convenience foods. Consumers, he says, are asking for convenience, consistency, taste and value. But, delivering convenient beef products carries challenges.
"Foremost is the recognition that this truly is a new category in the marketplace and must be viewed as such by all segments - producer, processor, retailer, and even the consumer," Rocke says.
"Until now, the money we've been playing with in this industry has been coming from within the industry," says Hansen, president of Flint Hills Foods. "When cattle were $80, the packers weren't making money, but you were. When cattle were $60, packers were making money, but you weren't. Where we have to get the money is from the consumer."
Busy schedules, a lack of cooking know-how and more disposable income are forcing and/or allowing consumers to look for something different. Determining exactly what consumers want is the first step, Hansen says. Following that, education, communication and cooperation among all segments are needed to build products that fit those desires.
"We have to stop thinking that price is how we sell our product," Hansen says. "Give them the convenience and consistency they're looking for and they'll pay for it."
Hansen says he's made a fortune his 30 years in the meat business by grasping opportunities and manipulating lower demand cuts to fill customer desires for consistency and value. He began by buying Kansas City strips and ribeyes from five neighboring packers in the 1970s and '80s and selling portion-controlled cuts to restaurants.
When packers began exporting those cuts to the lucrative overseas market, Hansen started looking again. He found chucks selling for 79 cents/lb., and spent $18 million developing new products - trimmed, pre-cooked, consistent and convenient.
"We now sell 17-oz. packages of pot roast in the store for $5.99. We include an 800 number for comments. We've never gotten one call about the price," Hansen says.
Rocke echoes those sentiments: "We all have to better understand that the consumer has a different price: value relationship than we do... You folks are not typical consumers. How you eat and operate at home is not how it's happening out in the world. The consumer of today does not have the time or the ability to deal with traditional product offerings."
Convenience Isn't New Convenience products aren't new, Rocke points out. TV dinners have been around for decades, but consumers generally have seen them as meals of last resort.
"What's new today is that we need to develop products that consumers want to eat, even if they had the time to cook," he says.
The evolution in convenience beef items began in the food service and mail order segments in response to customers' concerns for more convenience and consistency. It then evolved in the mid 1990s to retail, Rocke says, driven by innovative companies like Flint Hills Foods, Burnettes & Sons and his RMH Foods.
The next logical step is widespread presence at the retailer level. Unfortunately, that's where some of the greatest obstacles to convenient beef products exist. Retailers largely haven't embraced the concept of serving the consumer, Rocke and Hansen claim.
Rocke says most retailers rarely base a decision on carrying new and innovative products on consumers' needs and desires. Rather, it's a matter of profits and politics that drive the retail industry.
"It wasn't long ago that the retailer made the decision on what to put in his case based on what the consumer wanted. Today, the decision is strictly and solely driven by what the manufacturer will do for them," Rocke says.
"They'll put anything in that meat case, literally anything, if someone will give them enough dollars to sell it," Rocke adds. "And that $2 million price tag per item is frightening for small companies to try to attempt to surmount."
The retailer has shifted the responsibility to make the sale to the manufacturer, Rocke says. The result is there's no incentive to retailers to make a product successful at the retail level.
Yet, Rocke expects to see radical changes in retail marketing of beef products in the next five years. For one thing, control of the final battleground - the dinner table - is about to be decided. It's the last meal still marketed as a commodity.
Rocke says we as an industry "expect the consumer, who is used to having their needs taken care of (with brands and convenience) at the breakfast and lunch table, to settle for some traditional value equation at dinner," Rocke says. "That just doesn't work anymore."
Major consumer brands - like Hormel, Sara Lee and Oscar Mayer - are coming to claim the dinner table, Rocke says. In addition, expect to see meal groupings, rather than individual meat product offerings, sweep into retail stores.
"The meat case is dead," says Hansen. "They just haven't announced the funeral yet." He says it will be aggressive companies with strong brand images, quality reputations and deep pockets that will affect the change.
Producers can help, Hansen says. While he admits there are some problem cattle, he doesn't believe drastic genetic changes are needed.
"Most of these cattle, if you just use good management practices, will make the grade and work," Hansen says.
A big need, however, he says, is research dollars. Producers can help with checkoff dollars.
"You need to double your checkoff fees," Hansen says, something Rocke also favors. "We as an industry haven't spent hardly anything telling consumers what we do for food safety, what we do for the environment," Hansen says.
Rocke says the credit for the positive changes that have come about so far in the convenience category of beef products can be laid at the feet of the checkoff program. He particularly credits the "Best New Beef Product In America" Contest held in 1998. It was a checkoff-funded contest that offered a $250,000 award for the best new beef convenience product.
"That contest really was the beginning of the recognition that this category is important for your industry," Rock says. "You have to remember that the predominant value of that beef animal is not in the loin or middle meats but in the end meats. If we're going to make a serious impact and not have to sell the entire animal except the middle section as ground beef, then we have to continue to make changes."
There's A Safety Role To Play Chet England, director of quality and food safety for Burger King Corp., Miami, FL, says food safety must be from farm to fork. Why?
Number one is liability. England cited the principle called "due diligence," which means an entity is doing everything possible to make and distribute a safe product. The principle has proven to be a successful tactic in many successful lawsuits of legal industries over alleged wrongdoing, he says.
"If you're not doing everything possible, then you're not following due diligence and you have a liability," England says.
More than half of the consumer food dollar today is spent outside the home, England reports. If beef producers want to protect market share and livelihood, it's imperative they make food safety a primary focus.
* To forestall regulation, which is creeping upstream.
* To protect the sales base - both foreign and domestic.
"Food borne illness outbreaks related to beef and beef products are bad for everyone," he says. "Outbreaks bring media attention, which leads to less confidence in our product by our export markets and our domestic public."
* To protect the product image. "The better our product image, the more likely consumers will buy it. Protecting our customers by managing food safety is the right thing to do. That's the bottom line and the ultimate reason we should care," he says.
England says Burger King has long taken a proactive approach to beef safety. HACCP (Hazard Analysis Critical Control Points) programs have been in place in Burger King's supply system for better than a decade, long before the government required it.
In addition, Burger King has put more rigorous in-restaurant safeguards in place and implemented extensive food safety training of all supervisors and crew. The company also has enhanced scrutiny of its suppliers through testing and audits.
"We have specification mandates for microbial interventions at the slaughter and fabrication levels. We use every piece of technology we possibly can to reduce or eliminate pathogenic organisms," he says.
England says producers have an important part to play in the food safety effort. Number one is education on food safety principles and a better partnership between production and retail.
"We need to keep E. coli 0157:H7 and other pathogenic microorganisms out of the meat chain - simple things like clean water troughs and clean water for cattle," England says. "You need to manage wet feeds and silage to limit microorganisms. Minimize contamination by not using loader buckets to clean the yard and then transport feed grains."
A huge need, England says, is just more research. "We need to learn more about sources and pre-harvest interventions."
He says industry work on minimizing hide contamination to prevent microorganism transfer to the carcass during the hide removal process is a must. Better, more practical ways to minimize stress, improved manure management practices, and innovative ways to bolster cattle's immune response or feeding regimes that minimize E. coli are other areas to consider.
"Burger King customers buy our products believing they are safe. We buy your products believing they are safe," England says. "If we breach that trust, consumers will go someplace else, like chicken. I encourage you to engage fully and completely in the area of food safety for your products."