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Agrimarketing : November December 2008
FOCUS ON:MARKETING TO BEEF PRODUCERS CERTIFIEDANGUSBEEFTURNS30 T byMiranda Reiman, Industry Information Specialist, Certified Angus Beef LLC he first pound of Certified Angus Beef (CAB)was sold October 18, 1978, at Renzetti’s IGA supermarket, Columbus, OH, under the leadership of the program’s first Executive DirectorMick Colvin. By 1983, the program’s licensees weremarketing amillion pounds a month, a benchmark that is achieved every fewhours these days. Thirty years after that initial sale, the brand that revolutionized the beef industry is celebrating the milestone fromits headquarters in Wooster,OH. “The introduction of this brand, based on high-quality carcass char- acteristics,was a huge paradigm shift,” says Bill Rishel, 1996 CAB Board Chairman fromNorth Platte, NE. “The idea ranks as one of the greatest of all time, a catalyst for changing thewhole economic pic- ture of an industry.” CAB debutedwhenAngus influ- ence had fallen to one-thirdof the nation’s herdandUSDAquality grade standardshad been lowered.Con- sumers stillwanted consistent, highly marbledbeef, but producers needed incentives for hitting that target. BUILD DEMAND FOR ANGUS “The pull-throughtheoryworked exactly as itwas envisioned, of course, building demand forAngus cattle,” saysHenry Bergfeld, Summitville, OH, BoardChairman 1997 to 1998. Today,Angus influence is at 60%of the cowherdbasewhile 18%of prog- eny qualify for the brand that helped define value-basedmarketing. The CAB supply development teambeganworking in 1980 to forge a closer link to producers, but the first premiumsweren’t noted until 1986. By 1995, the company accessed 80%of the U.S. packing base, and in 2000 the first Canadian packer pro- duced the brand. By 2007, packers had paid a cumulative $250million in premiums, just for the CAB com- ponent of their value grids. That’s all possible because licensed restaurants and retailers—13,500 of 42 AgriMarketing s November/December 2008 (Above, L to R) American Angus Association CEO Bryce Shumann, original CAB Executive DirectorMick Colvin, and current CAB President John Stika toast the program’s thirtieth anniversary. (Inset photo) This billboard is one of a series created for FarmFresh Supermarkets, Virginia Beach, VA, promoting the CAB brand. In addition to increasing unifor- themin 39 countries today—send demand signals back through the system. “We really strive to differentiate ourselves fromother retailers,” says Ed Steinmetz, VP/Meat and Seafood forGiant Eagle, Based in Pittsburgh, PA. “The CAB brand is onewaywe do that. It has a proven track record and a selection process that’s second to none.” SCIENCE-BASED Itwas the first USDAcertified pro- gram, and built entirely on science- based carcass specifications. “Back in 1978,we sold a lot of carcass beef,” says BobNorton, Chairman of the Board from2003 to 2004 and 2006. “Over the next two decades an evolution occurred in the waywe process cattle.Most of that external fat is taken off in the pack- ing plant now.” At the same time, the trend toward bigger cattle produced rib eyes too large for foodservice and retail. In 2006, the board voted to replace the yield grade 3.9 capwith more specific limits: a rib-eye area of 10 to 16 square inches, hot carcass weight less than 1,000 pounds and external fat thickness less than 1 inch. mity,CAB has further differentiated itself in its recent history by adding CAB Prime in 2000 and CABNatural in 2004, under the leadership of then-President JimRiemann. That “never-never-never” program requires the same 10 CAB specifica- tions, plus cattlemust not receive antibiotics or hormones, nor con- sumer animal byproducts in feed. BRAND EXTENSIONS The brand has branched into value- added product categories like deli meats, frankfurters and heat-and- serve entrees. The international division has grown steadily over the years, and bounced back after bovine spongi- formencephalopathy (BSE)was found in a U.S. cow.The export share of CAB sales dropped from17%in 2003 (prior to BSE) to 9%in 2005, but the division used the disaster to strengthen ties down the road. “Our efforts better positioned us moving forward as themarkets reopen,” says current CAB President John Stika. “We’re growing our CAB business at a quicker pace than even U.S. beef overall, recovering volume share in these samemarkets.” AM
American Seed Trade Association