How to grow beef demand
How to grow beef damand
by Diane Henderson, Communications Manager, Cattlemen’s Beef Board
An interview with Dr. Ted Schroeder, professor of livestock marketing at Kansas State University and co-author of “Beef Demand: Recent Determinants and Future Drivers”
Consumer demand for beef is one of the most misunderstood concepts affecting today’s beef industry. At the same time, however, it ranks as the primary goal of the Beef Checkoff Program, in helping to meet the objectives of the Beef Industry Long Range Plan. Therein lies the impetus for the checkoff’s Joint Evaluation Committee, on behalf of the Beef Promotion Operating Committee, to commission a two-pronged research study in November 2012 to: Summarize the current knowledge available about consumer demand for beef; and identify the best opportunities for the industry to influence demand positively during the coming decade. Authors of the report, released in June, include Dr. Ted Schroeder, professor of livestock marketing, and Dr. Glynn Tonsor, associate professor of livestock marketing, both at Kansas State University, in addition to Dr. James Mintert, assistant director of extension for Agriculture and Natural Resources at Purdue University. In the following interview, Dr. Schroeder provides insight about the purpose and results of the study.
Q&A with Dr. Ted Schroeder
Q: Dr. Schroeder, would you please explain to us the purpose of the report and the opportunities that the results provide to the beef industry, in general, and the Beef Checkoff Program, in particular?
“Beef demand is incredibly important to understand because it offers so much value to everyone in the industry – and it’s changing …. What we set out to do in this project was to provide analyses of a host of information sources that the beef industry can use as it prioritizes expenditure of checkoff dollars and decides how best to enhance beef demand in the future.
“We reviewed a large body of previous literature on beef demand and surveyed nearly 1,000 consumers. We then did a unique survey of about 160 industry experts who had published research and been active in the industry. From them, we solicited information about the drivers of beef demand, but more importantly, about the feasibility of the beef industry and the Beef Checkoff Program to adjust to or target specific demand drivers as it strives to influence beef demand in the next five to 10 years.”
Q: What did you find that will help the beef industry maintain strong consumer demand?
“We found that we could categorize a wealth of different demand drivers succinctly into seven broad categories, which served as a framework for the rest of the research and ultimately targeted our results to identify specific things the industry can do. Those broad categories include: food safety; product quality; price; health attributes; nutritional components; social factors; and, finally, sustainability attributes.
“From that, we determined which drivers are most important to the future of beef demand and which ones the industry can influence most. Some drivers are simply external drivers that the industry has to live with, and others are things that the industry can influence through production or processing or marketing decisions and interventions. At the end of the day, if you intersect those two, you really have an opportunity to make some meaningful demand enhancements.”
Q: With that prioritization in mind, which of those seven key demand drivers offer the most promising opportunities?
: “Food safety, price and product quality came out as the most important to address for the beef industry to have the most compelling effect on beef demand, with the other four, in order, as health, nutrition, social aspects and sustainability.
“It’s critical to understand that all seven of these are important, as a group. So even though we go down the list and rank them, even the lowest-ranked of these seven are not irrelevant, and none of them can be ignored. For example, when issues around sustainability arise, the industry does need to be prepared and willing and able to respond to them.”
Q: We’d like to have you share briefly about how each of those top three attributes influences demand and how the beef industry can influence them. Let’s start with Price.
“It should come as no surprise that the retail price of beef greatly influences consumption of the product; in fact, price is a critical part of the definition of demand. And while price is an attribute that is generally outside the control of the beef-production sector – things like feed and land costs, energy prices, packaging and processing costs – investing in technology that enhances the end product for the beef consumer and advances production efficiency are very important to beef demand.
“The challenge that the industry needs to keep in mind is that, as production technologies are adopted, they must be adopted with the corresponding goal of enhancing – or, at least, not negatively affecting – consumer perceptions about the two other key demand drivers: food safety and product quality. In other words, if we adopt technology that can make beef production or processing more efficient, that will help the beef industry maintain competitiveness with other proteins at the retail meat case. And if those technology options can also improve food safety and product quality, they look like real grand-slam kinds of investments to us.”
Q: Speaking of Food Safety, what can we do to affect that demand driver to the most compelling degree possible?
“Based on the findings of this research, there are two very important dimensions we need to think about when it comes to food safety. The first is dealing with food safety issues present in our industry – issues surrounding things like bacterial contaminations and other contaminants that can get into our production and food supply. The beef industry – as a whole – must invest in interventions and meticulously manage to reduce the incidences and problems associated with these kinds of food-safety occurrences. In addition, we need to continue to help consumers recognize their role in food safety.
“The second component that is very important here is consumer perceptions about food safety. A consumer might have a food-safety concern that really has nothing to do with food safety – for instance, lean finely textured beef – and we know that those things can influence demand. Ultimately, perceptions drive demand, so it’s dealing with both the actual food-safety issues in our industry and with the misconceptions that people have about things that are actually completely safe but about which consumers may have concerns at times. Together, that investment can help enhance the food-safety dimension of beef demand.
Q: The third key driver you listed was Product Quality. Tell us how that fits into the puzzle, if you would, please?
"Ultimately, consistent and highly desirable eating experiences are what attract consumers to beef products. The industry simply must eliminate products that fail to deliver exceptional flavor, tenderness, juiciness and other quality dimensions to consumers. All players, from input suppliers to seedstock geneticists, ranchers, feeders, processors, retailers and food preparers play important roles in beef quality assurances. All of these sectors must work together to achieve the most enjoyable eating experience by those who eat beef and beef products.
“Our study also highlighted the importance of product freshness to shoppers. Since so much beef is sold fresh, its presentation in the meat case is critical to attracting consumers to the product. Beef products that are not fresh, are discolored or have other visual flaws immediately turn consumers off. Offering the most visually appealing and freshest products possible in our meat cases is essential to alluring shoppers to purchase beef.”
Q: Any final points you’d like to make to beef producers about how we use this research to bolster demand in the future?
“Everyone in the industry has the opportunity to influence consumer demand. We hope this study will provide information to help folks in the beef industry identify what their individual priorities are and define their roles in advancing beef demand. It’s very important to remember that even if a producer is serving a boutique or niche-type market, food safety and product quality are still going to be important drivers. There are heterogeneous consumer preferences out there but, ultimately, we must maintain keen awareness of major drivers that are going to influence everyone.”
To see an executive summary, the full research report and additional interviews with the researchers, visit Demand Determinant Study.
Tags: Beef Issues Quarterly, Questions and Answers, Summer 2013
September 4, 2013