Producing the most nutritious food in the world doesn’t count for much if you don’t have any buyers. Luckily for cattlemen who target high-quality beef, that’s clearly not an issue.
Those who purchase meat for foodservice and retail outlets say they want the highly marbled beef, because that’s what their customers want.
“We sell to people who are going to cook product and please guests—they’re not buying for themselves and they’re not shopping for price,” says Mort Kent, U.S. Foods of Denver, Colo. “They have a reputation to uphold and their customers expect consistency and quality, and they’re willing to pay for it.”
A recent analysis of Urner Barry wholesale beef pricing data supports that claim. During the two years from July 2010 to July 2012, the value difference between USDA Choice and Select grade beef was $62.31 on an average 830-pound (lb.) carcass.
The wholesale price for the Certified Angus Beef ® (CAB®) brand over Select was more than double that at $127.10 (see chart 1). That’s $15.31 per hundredweight (cwt.). The analysis is part of an updated “Black Ink Basics” technical report from CAB.
“I look at it that I am the purchasing agent for my customers, and so how can I do the best job for my accounts? Because I am really representing them,” says Franklin Hall, the third generation to operate Lone Star Foodservice, in Austin, Texas.
Just as a cattle buyer fills orders for a certain type and class of cattle, Hall acts on requests from his high-end restaurant clientele.
“My job as a processor and distributor is to make sure I am purchasing the best product at a fair price and when I receive that product the systems in our company are set up to respect that product—to properly age that product, to artfully cut that product and package and deliver it in a way that helps our customers and makes them look good.”
“Our goal is to have their guests have a wonderful eating experience,” he says.
If that means paying more for better beef, they’ll do it.
“We need to be able to have everyone in the chain of distribution make a little bit more on CAB than on a commodity product, otherwise it becomes a commodity product,” says Mark Polzer, vice president of business development for the brand.
That’s why distributors typically pass along that higher price they’ve paid to their customers.
“The foodservice market that we’re in is much more quality driven than it is price driven,” Kent says. “So producing the highest quality, most consistent beef with the best genetics is critically important.”