The fourth quarter of 1999 produced what many are calling the story of the decade for the improving consumer demand. After 20 years of declining beef demand and lost market share, market analysts record beef industry improving consumer demand. After 20 years of declining beef demand and lost market share, market analysts recorded moderate gains for your product through improved retail demand and consumer spending.

Consumer spending on beef for 1999 was projected at $48.56 billion, nearly $2 billion above 1998 and a 4 percent increase. Analysts believe several factors helped improve demand for beef during 1999: a healthy national economy, rising wages, low unemployment, low inflation, increased consumer spending and more convenient beef products.

Greater demand for beef the past year has put dollars in your pocket. How much? Industry analysts believe last year’s increased demand added $3.50 to $4.00 per hundredweight to the price of a fed steer. That’s $35 to $50 per animal. Other factors also contributed to stronger cash cattle prices the past year, but increasing demand is one that gives producers the greatest reason for long-term optimism.

Your checkoff dollars played a major role in helping spur recent increases in beef demand. In late 1998 the National Cattlemen’s Beef Association, as a contractor to your Cattlemen’s Beef Board, initiated the first leg of a long-term demand-building strategy. The focus was to make beef more convenient for modern consumers. With checkoff funding, NCBA helped introduce a new category of convenient, branded beef items that can be heated in the microwave and served in about 10 minutes. Several manufacturers of these products have reported double-digit sales and distribution increases since the beef industry launched its 1999 national marketing campaign to build consumer awareness.

The beef industry’s new product development initiative introduced more than 30 new products in 1999 using currently undervalued beef cuts from the chuck and round. New products such as a rotisserie beef roast for the deli, beef appetizers for restaurants and pre-marinated steaks are making chuck and round products more convenient and appealing for consumers and more profitable for the beef industry.

Marketing efforts to build on the gains beef made last year are underway. Responding to a commissioned study on the issues most likely to increase consumer demand for beef, a $30 million marketing effort has been built around convenience and nutrition. This dual-driver strategy is focused on improving the perceptions of beef with today’s momÑthe primary shopper and keeper of the family meal.
The industry’s marketing strategy will help deliver on those needs through retail and foodservice marketing, health professional partnerships, advertising and public relations. Building on the gains beef has made with convenience products, much of the new promotion strategy will focus on beef’s nutritional benefits. Beef is one of the most nutrient-dense proteins, providing high concentrations of key nutrients such as zinc, iron, protein and B vitamins.

NCBA’s CEO Chuck Schroeder is confident the entire beef supply chain will benefit from a stronger, more integrated focus on convenience and nutrition. ÒWe are now approaching beef not as a commodity but as a branded product. We will continue working with manufacturers, retailers and foodsservice operators to increase brand awareness and penetration as well as build equity with consumers.