Your Reading List

Certified Angus Beef Targets Canada

Rising beef consumption and the growing popularity of branded products are good news for the future of beef production. This is especially true for Canadian cattle farmers and ranchers, as a leading branded beef company based in the U.S. is turning its eyes northward to expand its supply.

Dr. Larry Corah, vice-president of Certified Angus Beef (CAB), arguably one of the most well-known global beef brands, is optimistic about the future of the beef industry in North America and sees Canada as a key player in helping the company expand global beef sales. He shared 10 key insights fuelling that optimism at the Beef Symposium held at the University of Guelph this spring.

1. Beef is the preferred animal protein. Both in restaurants and at retail, beef is the centre of plate animal protein choice. In the U.S., beef accounts for a 42 per cent share of the meat case; in Canada, the numbers are slightly lower at 38 per cent, but still ahead of chicken, pork and other meats.

2. Where we eat beef has changed. In 2005, 51-52 per cent of beef was sold in restaurants and 46-48 per cent at retail. The economic crisis reversed that ratio; in 2010, 52-54 per cent was sold at retail compared to 48-49 per cent at restaurants, although it is likely these numbers will shift again as consumer confidence begins to rise again.

3. Consumers are eating higher-quality beef. In 2006, the company sold 544 million pounds of product, rising to 777 million pounds in 2010. In Canada, sales of Certified Angus Beef Prime have skyrocketed from 496 pounds in 2006 to over 42,000 pounds in 2010, though still less than half a per cent of total brand sales in Canada.

4. We’re eating different cuts. Consumers like eating beef but the economic downturn meant not as many were willing to spend on steak. This led to a rise in consumption of end meat and grinds.

5. The “gourmet” burger. Premium grind has become a dining classification, establishing a new “gourmet” burger category, which focuses on whole muscle grinds. Ground beef sales from Certified Angus Beef packers have almost doubled, from 48.1 million pounds in 2006 to 83.7 million in 2010.

6. Global demand for beef has grown. Certified Angus Beef’s international sales have more than doubled since 2006, from 37.9 million pounds to 80.5 million in 2010. This trend is expected to continue as consumer affluence in countries like China grows.

7. Consumers are paying record prices for beef. The average fed cattle price of $83.16 in 2009 is projected to exceed $105 for 2011. What remains uncertain, however, is whether price will impact beef demand and if so, at what point this will occur.

8. Consumers like brands. Branded products represent predictability, trust and attribute consistency and shoppers are buying more store and national brands. Branded beef sales have increased 11 per cent from 2004 to 2010, compared to unbranded beef, which decreased from 38 per cent to 27 per cent during the same period.

9. Demand for information. Consumers want to know more about where the product is coming from and what’s in it. A link to a ranch or farm family is rapidly becoming part of the positive eating experience, and one that could potentially command a premium price. A study in Nebraska showed, for example, that consumers would be prepared to pay up to $4.74 per steak more if they know its State of origin and up to $8.75 more if it was linked to the actual farm of origin.

10. Natural and organic trends. Currently, sales of “natural” beef make up approximately five per cent of beef sales, a figure that has not changed significantly in the last three to five years. However, it does present a niche that producers could choose to target.

Canada is Certified Angus Beef’s No. 1 international market, consuming 28.7 million pounds of the branded product annually. Of that, only 15.7 million pounds — or the equivalent of 143,481 head — is currently sourced from Canadian production. Corah is eager to grow that number, both to better serve the Canadian market, but also to expand the company’s international business. Certified Angus Beef has set a goal of 60 million to 70 million pounds from the Canadian market by 2020, which Corah believes is achievable.

“Globally, most grain-fed fat cattle come from the U.S. and Canada, and Brazil and Argentina are a long way from having the infrastructure that’s needed,” he says. “Our challenge is to increase the per cent black in the Canadian herd. Currently we’re at 30 to 32 per cent and we’d like to see that at 45 to 50 per cent.”

A potential impediment to reaching that goal could be the one million head drop in the Canadian cattle herd in recent years, combined with unprecedented cost increases. However, Canada’s producers do have one unique advantage. The national cattle identification system provides for traceability that will allow Canadian beef under the Certified Angus Beef brand access to many global markets, including China and the United States.

“Your traceback system is absolutely wonderful and a huge global advantage,” Corah said in an interview following the presentation. “There is nice potential for growth here in Canada. There’s a good feeding network here and expansion of our program here could help stabilize the industry.”

About the author



Stories from our other publications