051014 Demand Created For New Beef Products

October 22, 2005

Dodge City, KS - "What's in it for me? That was the question from producers to retailers when the Cattlemen's Beef Board (CBB) and the National Cattlemen's Beef Association (NCBA) began promoting their Beef Value Cuts.

Based on checkoff funded muscle profiling research done in 1999, the meat industry was introduced to three new beef products.

A muscle profiling study was conducted in partnership with the University of Florida and the University of Nebraska to find important traits in individual muscles from the chuck and round. It discovered that there were muscles with high value potential that were not being utilized.

The new products were the Flat Iron steak, the Ranch Cut steak, and the Petite Tender cut. All three were developed through the $1-per-head Beef Checkoff Program and coordinated on behalf of Cattlemen's Beef Board and state beef councils by the NCBA. The raw material for these new cuts of beef is the chuck shoulder clod. A 22-pound piece of meat that had previously been ground for hamburger or used for roasts.

It was not an easy sales job. Harvesting the three new value cuts from the shoulder clods required packers and processors to learn new cutting methods and to do more cuts. This means slowing the line down and that costs money. This was accomplished by introducing the new cuts to chefs who are constantly looking for new entrees for their menus. Something to set them apart from the competition. Demand for the new cuts flowed back down the supply chain until processors and packers began looking for a way to meet this new demand. "NCBA had the vision and the courage to do this," said Craig O'Brien, with Quantum Foods, the largest portion cut steak house in the world.

O'Brien said that a project like this could not have been done by a company in the industry. "Companies who add cost to specifications are punished by the market," he said. NCBA created demand for these products and the industry followed the demand. "We are making serious money off these cuts." Quantum Foods markets beef products to several well-known, high volume steak houses.

Increased carcass value is what is in it for everyone. The Petite Tender that was ground into hamburger and sold for 99 cents-a-pound, but is now cut into a steak and sold for $4.99-a-pound. "It adds value to the carcass," said Monte Reese, COO of the Cattlemen's Beef Board.

The reception of these products by retailers has been rapidly expanding. The number of stores carrying the beef value cuts has risen from 42 in 2001 to 4,738 in 2005. The Flat Iron steak was the first breakout success of the three new products.

In July, Kroger Southwest in a partnership with Kroger, Tyson, and the Texas Beef Council, introduced the Flat Iron in 116 Houston outlets. The launch of this new product included 362 demonstrations, on-pack labels, radio spots, billboards, point -of-sale material, and an Hispanic outreach program.

This was the biggest launch of a single product ever for the Texas Beef Council. Russell Woodward, senior manager, product marketing with the Texas Beef Council says there is an opportunity for a national roll-out of this case ready product.

The final group to ask, "What's in it for me?" were consumers. The most important group in the introduction of any new product. The answer to their question is added value for their food dollar. The Ranch Steak, the Flat Iron Steak and the Petite Tender steak, cook and eat like cuts from the rib and loin but at a lower cost.


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