Canuck beef a stateside hit
April 01, 2010
Marketing...
Rancho Markets, a five-store chain in Utah, proudly promotes Canadian beef (with Spanish and English signs listing the cuts and prices). BIC chair John Gillespie (photo).
Trailblazers never run out of setbacks and unanticipated problems. But sometimes heading into uncharted territory brings unexpected bonuses.
Such as, for example, finding out that a considerable number of Americans actually prefer Canadian beef.
“Canadian beef shipped to the U.S. has always been treated as a commodity and our AAA beef was priced at a discount to USDA Choice, the American equivalent,” says John Gillespie, chairman of the Beef Information Centre.
“So our objective was to find markets where we could sell it at the same price, instead of at a discount. But now we’re seeing there’s a real demand for our beef. We’re finding customers who say, ‘We want that Canadian product.’”
As the fifth-generation of a family that has been raising cattle for 180 years near Ayr, Ont., Gillespie is plenty proud of beef produced in this country. But even he never expected to find a preference for Canuck beef in some quarters of the U.S.
Then again, while Gillespie knows lots about his Scottish roots, he wasn’t familiar with Hispanics, America’s largest ethnic minority.
“The Hispanic community likes bright red meat and never any with yellow fat,” says Gillespie. “Actually, they’re more like European consumers. They like it very lean with little or no fat. For that community, lean is a real plus and it just so happens we have a lot of AA and A product that suits them very well.”
Oddly enough, this happy discovery might never have been made if not for the BSE, which forced everyone in the Canadian beef industry into a serious rethink – including the Beef Information Centre, the market development arm of the Canadian Cattlemen’s Association.
Although the 2003 discovery of BSE in the Canadian cattle herd closed the border to live shipments of cattle for more than two years – beef shipments (from cattle under age 30 months) resumed after only four months. But it was obvious that a serious selling job was needed to convince Americans that Canadian beef was safe.
Up until then, the Beef Information Centre was entirely focused on the Canadian market, but staff started making regular trips south, concentrating on two main areas, the U.S. East Coast and the Southwest. The goal was to explain that our beef industry had high health and safety standards, and to show that Canada AAA beef was just as good as USDA Choice, and Canada AA just as good as USDA Select.
Naturally, it wasn’t long before they ran into buyers for the Hispanic market, which today numbers nearly 50 million and is the fastest-growing demographic in America.
“That’s when we discovered that the Hispanic community really loved our product and, given a choice, would pick it over the American,” says Gillespie.
The reason is that American standards allow some darker meat in its top grades while Canadian ones discount “dark cutters” because the standard is for a bright red product. Yellow fat is also graded lower. In the Hispanic view, darker meat and yellow fat have unpleasant associations with spoilage – a cultural legacy of coming from warm-weather countries where widespread refrigeration was slower to arrive.
It was a lightbulb moment for the Canadians, and has driven their marketing efforts ever since. Today, the Beef Information Centre has three marketing reps on the road pretty much fulltime, attending not only trade shows but also meetings with packers. Those efforts have led to deals with Hispanic grocery chains such as Pan Am Supermarkets, a Maryland-based retailer.
Dealing with these smaller chains has also revealed another sweet spot for Canadian beef. The top priority for meat managers at any grocery chain is to never run out of product. Canada doesn’t ship enough beef south to service a national chain, but it’s a good match for regional ones, such as Stauffers of Kissel Hill, an eight-store chain in Pennsylvania. There has also been a concerted effort to sell to the kosher and halal markets. Al Safa Halal, the largest halal retail brand in the U.S. and Canada, uses Canadian beef for wieners, patties, meatballs, and other products sold in the U.S.
Although these have been nice ‘wins’ for Canadian beef, they were not enough to counter the Country of Origin Labelling law which came into effect in late 2008. It caused an immediate drop in demand from American packers for Canadian cattle which, in turn, pushed down prices for cattle producers in this country.
But now that Canadian beef – maple leaf logo and all – is finding its way to U.S. meat counters, the Canadian market development reps are finding, to their surprise, that plenty of mainstream Americans like both equally well.
It’s all been food for thought for Gillespie, even though it costs “a fortune” to do this sort of market development. The centre, which has an $11-million annual budget funded by producer checkoffs and matching grants, not only has to pay the salaries, airfares and hotel bills of those three marketing reps covering the U.S. market, but a host of other costs. Trade show space is expensive, you need a nice booth that must be shipped from place to place, the meat has to be trucked in to each location, and you need to hire a chef to cook it up.
No wonder no one was really keen to do marketing in the U.S. before BSE forced it on them.
Today, the attitude is much different.
“The example we always use now is New Zealand lamb,” says Gillespie. “Most people have this image of New Zealand lamb as a premium product. We’re branding the Canadian Beef Advantage. We’re branding Canadian beef.
“We just had the Olympics and this image of Canada as this great, pristine country going out across the world. Maybe we can build on that. As I said, we started out trying to get rid of the discount put on Canadian beef. Now we dream of the day when we can ship our product to the States and get a premium.”
