Pandemic underscores beef demand trends
By Abbie Burnett
It’s been a year: A long, arduous year since last March when grocery stores and restaurants around the world had their business plans radically changed in just a few days.
As they adjusted day-to-day operations, one beef industry trend resonated louder: Quality matters.
Retail sales
David O’Diam saw it unfold from his perspective as vice president of retail for the Certified Angus Beef (CAB) brand. Retail beef sales during the pandemic displaced much of the trade usually enjoyed by foodservice.
It took 2.43 million cattle to supply the 608 million pounds of CAB cuts sold by 3,000 retail partners in Fiscal Year 2020. This is more than the volume of all U.S. Department of Agriculture graded Select beef.
“Most folks were working from home and had more time,” O’Diam said. “They were cooking more than they ever had, so they educated themselves on what quality meat is. This helped drive demand for high quality, like CAB, to all-time historic levels.”
For a fraction of the price, their expensive nights out became affordable at home, according to O’Diam, but sales extended beyond steaks. The chuck and round primal cuts gained value on their middle-meat counterparts. Consumers looked for the logo they recalled from their favorite restaurants.
Restaurant service
With more entertainment dollars diverted to retail, those who did continue to venture out to dine concentrated on a high-quality eating experience. Restaurants are still struggling.
“There is a big hole to dig out of,” said Sara Scott, CAB vice president of foodservice, but after a long 12 months optimism has returned to the scene.
“The ones remaining are the best of the best. They are nimble and progressive,” she said.
As seating capacity ramps back up, diners are choosing places based on their pre-pandemic reputation.
“Now is not the time for them to cut quality,” Scott says. “If they’re known for a great eating experience, people will be expecting the same.”
During the height of closures, regular demand patterns were upended – middle meats decreased in value in relation to ends, like the chuck and round. Last winter, ribeyes were more expensive than tenderloins at one point. It was hard for foodservice meat buyers to predict the market.
“This a pretty black-and-white indicator that restaurants drive value to the entire carcass,” Scott said.
Enjoying more beef at home this past year has greatly educated shoppers, which could sustain higher retail sales of premium beef even as restaurants reopen here and abroad.
Tourism and exports
On the export front, Cody Jones, CAB vice president of international, said partners around the globe were doubling down on their commitment to quality.
“They’re telling us, ‘yeah, we’re not downgrading at all. We think this is our chance to shine above the competition,’” he said.
Tourism took a hit during the pandemic as did CAB sales where there was a less established CAB retail presence like the Caribbean and some parts of Latin America. On the other hand, Taiwan saw in increase in CAB sales and the brand continued to its one-quarter share of all U.S. beef exports to the Middle East.
Four of CAB’s top 10 countries are in Asia and expected to anchor 40 percent of the world’s economy by 2030 thanks to their surging middle class. Export sales depend on trade policies, market dynamics and maintaining close relationships.
“Whatever the method, pre- or post-COVID-19, our job is to help our partners promote the brand, drive demand toward the logo and seek any opportunities we can,” Jones said.
As tourism begins to reopen, that logo recognition from retail stores and restaurants will boost demand across borders.
For some, worldwide lockdowns and quarantines reprioritized the trends in quality that CAB was already watching and helping to promote. What was important a year ago is even more important now.
Abbie Burnett is the producer communication specialist for CAB. She can be reached at aburnett@certifiedangusbeef.com.
