Grassfed, Organic Meats Continue To Gain Market Share

CHARLENE M. SHUPP ESPENSHADE
Special Sections Editor

GRANTVILLE, Pa. — Pennsylvania is a state where country meets city. With more than 12.5 million people, opportunities abound for the state’s producers to meet the diverse needs of its residents. One of those opportunities is grassfed beef.

Pennsylvania Agriculture Secretary Dennis Wolff kicked off the 2007 National Grassfed Beef Conference last week at the Holiday Inn, Grantville.

Wolff spoke to the several hundred attendees about sharing the opportunities farmers have to impact their bottom line, including raising grassfed beef and direct marketing.

Programs such as Pennsylvania Preferred, a local food labeling program, have been successful because consumers want to know where their food comes from. “Value added is something we hear all the time,” Wolff said. “Grassfed has a lot of appeal to consumers.”

One reason is they like that the cattle are out on pasture. For beef producers, Wolff noted its value is a reduced dependence on grains to finish the cattle.
During the panel discussion on targeting customers for the grassfed beef market, Allen Williams of Tallgrass, a grassfed beef marketing company, and Angela Pridie, Organic Grassfed Beef Coalition, Vermillion, S.D., shared consumer trends for the grassfed and organic beef markets.

Williams shared information from a survey conducted by the American Meat Institute (AMI) on consumer preferences for meat products. The 2007 spring survey noted that 70 percent of consumers still purchase meat products from a grocery store compared to other outlets such as “super centers.” In the meat department, 21 percent have purchased natural or organic meats in the past three months. The group purchasing these products was the 25 to 39 year-old age bracket.

Pridie said her organization’s studies show that the majority purchasing grassfed beef are women who are younger, highly educated and more affluent.
Williams said the youthfulness of the group purchasing natural and organic meats was good for the grassfed beef industry, citing that this group will lead to future growth because they will influence their children’s food choices. The driving force for the purchases was health, animal welfare and better taste.

The limitation many cited was price of organic beef. If the price was lower, consumers would be willing to purchase more organic and natural products.
Williams believes this would not be as limiting if better marketing was available in the grocery store for grassfed beef. Consumers do not understand why it is priced differently from conventionally raised beef. His company, when beginning a partnership, will work with grocery stores and restaurants on how to market and prepare the beef.

Customers, Williams said, want more variety and consistency in their products. In addition, suggestions for the meat counter in the AMI study included better pricing, more sales, smaller portion sizes and better quality without deception.
“They (the consumers) are still feeling they are being deceived in the terms of how these protein and meat products are being represented in the meat case and the attributes that they do and do not have,” said Williams.

The demand for higher quality beef is going to rise in all sectors, Williams said, including the export markets.

Williams questioned the federal government’s position on a cheap food policy. For 2007, U.S. consumers are spending 46 percent of their food dollar away from home and this will continue to rise. By 2010, it will be 53 percent.
“For the past three decades, USDA has had a ‘cheap food’ policy. But, the consumers are saying we don’t necessarily want cheap food. It is not cheap to eat out,” he said. “The consumer is looking for more than cheap products, they are looking for attributes or an experience or something like that.”

Williams said the beef industry is in the era of “story foods” — the consumer wants certain attributes in addition to the cut of meat they are buying. “We have to have a story attached to the product,” he said.

Those wants could range from hormone- and antibiotic-free and animal welfare issues to organic and source verification.

Is there a future for natural fed and organic beef? Williams said the sector will continue to grow.

Studies by several organizations including Colorado State University and Auburn University showed a taste test preference for about 25 percent for grassfed beef. On average, about half of the respondents had no preference.
“Their choice in whether they buy grassfed or grainfed beef is going to be predicated on the other attributes you are going to sell on,” Williams said.

In 2006, there were about 2,000 grassfed beef producers, which raised between 45,000 and 50,000 head of cattle, resulting in more than $90 million in beef retail sales.

The next hurdle for the grassfed beef industry Williams predicts will be meeting the demand for convenience food. Surveys by supermarkets show that will be the area of expansion for their retail area to meet consumer demand. “We have got to be on that train,” Williams said.

Pridie said her office receives calls from women regularly saying they would purchase more organic beef if it was in small portions, precooked and preseasoned.

While the industry has great potential, Williams said the industry needs to go slowly to avoid low quality products making it to the marketplace. “Its going to grow slow, there is no way to have a rapid increase or what you are going to do is dump a lot of low quality product on the market and that will severely limit your ability to market it in the future,” Williams said.

According to Williams, the grassfed industry needs to continue to grow beyond the farm gate to reach the retail outlets and restaurants with economy of scale and strong infrastructure and be able to market grassfed beef year round.