051022 Branded Beef Programs Growing

October 22, 2005

Branded beef programs are gaining traction, fueled by consumer demand and driven by retailers looking to differentiate themselves in the marketplace. And that is creating opportunities for cow-calf producers and cattle feeders who are willing to be flexible.

“These programs are increasing,” said Tom Woodward, general manager of Broseco Ranch in Decatur and past president of Rancher’s Renaissance. Serving as panel moderator during a breakout session at the Annual Convention of the Texas Cattle Feeders Association, Woodward said the trend line is heading upward for branded beef products. “There are 70-plus branded programs recognized by USDA right now. And it appears that these programs are accelerating.”

James Henderson agrees. “I think some kind of specified product will become more the norm than commodity product at some point in time.” Henderson worked as general manager of B3R Country Meats in Childress before forming his own company called Synergy Beef. “I think there will be a myriad of specifications, and there will be more cattle than not fitting into some kind of specification program, probably in the next five years.”

The reason for that, according to Charlie Bradbury, is consumer demand. Bradbury, CEO of Nolan Ryan’s Tender Aged Beef in Huntsville, said sales of Nolan Ryan-branded products have grown more than 25% each of the five years the company has existed. “Retailers are not ignoring the fact that branded beef programs are having this kind of growth,” he said.

That means there will be more opportunities for cow-calf producers and cattle feeders to participate. However, all three members of the panel said it will require more recordkeeping and more flexibility. “I think cattlemen are going to have to start looking now at how they are going to adapt their feeding and recordkeeping, all those kinds of things, to fit into specification programs,” Henderson said. “I doubt that very many feedyards will tie into just one, so how do they get their system set up to be flexible enough to fit into multiple systems?”

The carrot, of course, is the extra value that is created for the cattle. However, increasing the intensity of management adds costs. “If you can put on a label, whether it’s to an American consumer or a Japanese consumer, that you know where this animal came from, there’s a value associated with that,” Bradbury says. “And of course, the good news is we can recover that cost from the consumer through a higher price point for the product, so we’re able to pass value back.”

Woodward used two common products to illustrate the power of branding—water and milk. “What does a bottle of branded water cost you today?” he asked. “How many brands of milk are there? Milk is milk and water is water, yet they have been able to differentiate themselves and generate a market following for their brand of product. I think the trend is there across the spectrum and I think it’s time for beef to move in that direction. If we anticipate that beef should remain a commodity product, then we’re leaving money on the table.”


Meat Industry INSIGHTS Newsletter
Meat News Service, Box 553, Northport, NY 11768