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Canadians celebrate with steak

How will the industry keep the 'celebratory meal' affordable for everyone?

A rival to the traditional steak house, high-end burger joints, are making their mark in the food-service industry. This is part of the transition of the beef industry as it grinds its way onto the consumer plate. We know that folks buy ground beef to cook at home and they now choose the burger as a good alternative to other fancy entrees. From Paris to London, there is a hamburger on the menu — much to the distress of time-honoured chefs who once snubbed the poor man’s food.

It would stand to reason that the surge in biting into burgers would displace high-end steak houses but in an anomaly that cannot be explained, high-end steak houses continue to thrive. The difference, the cut is smaller and designer burgers join steak at the heart of menu offerings.

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When it comes to middle meats, the place where the tenderloin and its cousins reside, there is a weak market overall. In grocery stores, the middle meats were traditionally the profit centre and retailers struggled with selling end meats. Today, there is little challenge to sell lower-cost end cuts and the high-end middle meats have declined in domestic market share. From the perspective of shelf economics the middle meats are pulling down profitability.

In a recent study released by American Meat Institute (AMI), researchers found that folks always buying the middle cut were members of the $100K club, those who make enough money to support their delicious habit. When it comes to dining out, the demographic is not so clear-cut. In fact, customers of all walks of life still flock to steak to celebrate special events. Young people, including students will share a large steak or tend to order smaller portions. At the end of the day, steak, prime rib, tenderloin and the other cuts represent a passage of sorts, the all-North American dream of affording the best in taste for those special times in our lives.

Chefs indicated they need steak on the menu to create traffic — as it is the drawing card for all clientele. They also said that people who eat steak are diverse in income and age and they need to be provided with more than a memorable eating experience. They also need to know where that animal came from and how it was raised. Although you and I know the mammoth task of correctly pinpointing which steak came from where and how it was handled, it still behooves all eating establishments to try and find out. In other words, taste alone will not keep the middle meats alive in the future, but selling the story may.

We have all at some time been to a steak house offering the “free” meal if you can eat all 64 ounces with trimmings. This type of grunt and gulp mentality has been replaced by a request for smaller offerings of five to six ounces and a more intimate experience. In addition, a little familiarity or perception through branding goes a long way as 77 per cent of respondents in the AMI study said they liked the flavour of Angus beef (CAB).

At our house we don’t touch the tenderloin from our beef program, it is reserved for the international guests who visit. Much like we see in mainstream society, the best of beef is for special occasions. This has not, however, solved the problem of the diminishing position of middle meats on the beef shelf. The price may be up per unit but it is not enough to restore profitability at retail.

As was found in the 2012 ALMA Canadian Consumer Retail Meat Study, consumers are driven by a varied and fresh selection. A lack of newness in the middle meats keeps coming back to haunt the beef industry. Everyone understands that they like a steak but the absence of new offerings and new value-added presentations is driving the middle cuts to service only a complimentary economy, the elite who can afford it.

As most Canadian beef is exported, we have lost control of the value in middle meats at a level which will be exceedingly difficult to restore. Fostering continued interest with export partners other than the U.S. remains critical in renewing the value in middle meats. Although easy to sell offshore, we face a question of supplying appropriate volume and adhering to production protocols that are acceptable to buyers. As an added threat, the pending opening of the American market to all EU meats will have a strong effect on Canada’s ability to capture premium pricing on both end and middle meats exported to the U.S.

Canadians of all walks of life enjoy celebrating with steak — a smaller steak perhaps but still with steak. And although they want to know more about their meat they also want to spend less — and that is the tipping point for beef. How do we as an industry ensure that the celebratory meal of choice remains affordable for everyone and more importantly, how will we realign or redesign the middle meats so they regain their share of the overall beef category at the retail shelf?

New trade agreements that are country specific in nature and company-to-country specific will also influence the success of middle meats. While we stew about market access in regards to production protocols, nimbler trading partners are cutting deals with our future markets. It is not simply a declining value problem, but an internationally complex one, and the Canadian beef industry has more at stake than just a slippage in domestic volume.

Brenda Schoepp is an inspiring speaker, consultant and mentor who works with young entrepreneurs across Canada and around the world. She can be contacted through her website. All rights reserved. Brenda Schoepp 2015

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Contact Brenda through her website: www.brendaschoepp.com. All Rights Reserved. Brenda Schoepp 2018

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