Hamburger is hamburger, and all ground beef is pretty much the same, right? A generation ago, most consumers would agree, but they are more discriminating today. They shop the retail meat counter looking for value beyond the price tag. They read labels. Beef costs a little more these days, so it is increasingly seen as an affordable luxury — provided it performs in the kitchen or patio and satisfies the palate.
From a producer perspective, it is exciting to consider the universal presence of beef grinds. A recent National Cattlemen’s Beef Association study reports 95 percent of foodservice operators use beef. More than 70 percent use hamburger or ground beef items, giving the “grinds” category the highest penetration of all beef sold into foodservice. At retail, grinds make up roughly a third of total beef tonnage. Yes, we’re just talking about ground beef, but keep in mind that it:
was one of the first convenience foods.
remains convenient and easy to use.
can be prepared by all cooking methods.
has nearly unlimited uses in meals.
crosses virtually all regional, ethnic and cultural preferences and income levels.
Comprising 60 percent of beef dining items, grinds clearly affect the value equations for prices paid to beef producers. But the demand base is shifting with consumer education. A decade ago, people began to note the lean-to-fat ratio in what they still called “hamburger.”
Now, more of them realize there’s a big difference between an 80/20 ground-chuck patty and a generic 80/20 beef patty, based on the source of raw materials. The latter can arrive at that balance with a blend of beef-derived raw materials from fed cattle or aged, cull bulls and cows. Ground chuck is exactly that. It’s never a question of safety, but one of quality that differs with the ingredients.
With the rise of beef brands, consumers have also discovered the greater value of high-quality ground beef from grain-fed, youthful cattle. They note a distinct advantage in flavor, juiciness, texture and color, due to the sources of fat and lean blend.
There is added value in these premium beef grinds. During 2004, the average box price for Certified Angus Beef brand ground chuck was 9 percent ($12/hundredweight) over the commodity grind weekly average.
That premium is passed along as a portion of the $50 million paid annually to producers of CAB-accepted cattle. Since 2000, CAB ground beef sales have increased from 42.2 million pounds to 61.9 million pounds last year, more than 12 percent of total brand sales.
We often hear these facts presented with different conclusions. Some say that since grinds are the single biggest driver in sales tonnage, we need to focus more exclusively on red-meat yield. But we can’t afford to orient grain-fed beef production solely toward the lean yield and the ground beef market.
The last time we did so, our industry experienced a two-decade decrease in market share of consumer spending. As we continue to improve the level of consumer satisfaction with higher-quality beef in general, demand will continue to grow, and the ground beef category will continue to evolve into a value-added opportunity for beef producers.
John Stika is vice president of business development for Certified Angus Beef.