Willing To Pay For Quality

Today's shoppers have high expectations for beef purchases, and aggressive retailers are reaping the benefits when leading with a “quality-first” mindset.

Consumers are going back to the basics — they want high quality, a personal connection, choices, value and their own way.

“That's according to Kim Essex, SVP for consumer marketing for the National Cattlemen's Beef Association (NCBA) in Centennial, Colo. “Woe to the company that can't deliver what we want, when we want it,” she says, noting, “It's very important in the beef industry that we don't fall into a commodity mindset.”

Essex shared these and other views at the “Trends and Trendsetters” Cattlemen's College session at the recent annual Cattle Industry Convention in Denver, where experts from various sectors of the beef business offered their insights on the high expectations consumers have for their beef purchases.

The seminar's retailer, restaurateur and packer panelists said their successes are a direct result of serving customer needs.

Art Wagner, VP of cattle procurement for National Beef Packing Co., said that this business model has led to carrying a variety of programs, including the Certified Angus Beef (CAB) brand. “We recognize the value of the brand,”affirms Wagner, adding that it helps the Kansas City, Mo.-based company “differentiate ourselves to our customers and meet their needs.”

At Buehler's Fresh Foods, a CAB-licensed retail chain based in Wooster, Ohio, customers come to the store expecting good beef every time. “Buehler's success is hinged on quality,” explains Dave Savidge, Buehler's director of meat merchandising, who related details of the regional retailer's latest move to feature CAB Prime Natural.

“Customers are willing to pay more for that,”says Savidge.“As it grows, who is going to supply that food chain? I think it's a trend worth considering,” he continues, noting his expectation that premium grinds will make up a big portion of Buehler's growth in 2011, based on the grocer's 2010 meat sales, half of which were generated by CAB Prime Natural grinds.

Restaurants such as Longhorn Steakhouse, Capital Grille, Red Lobster and Olive Garden — all owned by Orlando, Fla.-based Darden Restaurants — also try to stand out on the basis of atmosphere, quality and value.

Jeff Spotz, Darden Restaurants' VP of meats, commodity/risk management and purchasing, says customers expect a selection of quality steaks that's perfectly seasoned and expertly grilled. “A Choice steak doesn't always eat the same,” Spotz notes. “If we find a way to deliver the same eating experience the whole time, that would be a huge competitive advantage.”

Tom Ryan, founder and CEO of Denver based Smashburger, is also capitalizing on Americans'preference for a better burger. “That category is going to grow at 10 percent,” he says, compared with 3 percent overall in the $100 billion burger market.“Our goal is to lead the pack and set a new standard.”

The growth pattern at the CAB-licensed burger chain, which began three years ago with 10 stores and has since grown to 179, rivals that of many fast-food icons, including McDonald's. One big difference, however, is the premium-quality beef. “There is something really magic about CAB and our flat grill,” explains Ryan, describing the eatery's process of putting the burger on a hot grill, covering it with parchment paper and smashing it.

About 55 percent of Smashburger's diners come in for lunch and 45 percent for dinner, which Ryan says is unusual for this type of restaurant; typically, lunch makes up a larger majority of the business. “Smashburger and others like us are putting burgers back in people's lives,” Ryan believes.

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