Farm Talk

Ag News from Around the Country

July 17, 2012

Pleasing consumers key to BQA

Parsons, Kansas — Eating satisfaction rules when it comes to making beef lovers happy.

That was clear in early results from the 2011 National Beef Quality Audit (NBQA), but defining that satisfaction seemed harder to pinpoint.

“If producers get the right signal, and they are pretty good managers, they can hit the target,” said Keith Belk, Colorado State University meat scientist. “But they have to have the right signal.”

One constant beacon comes from the Q-word in that audit, which has run every five years since 1991: people at every link in the beef chain want quality. A call for more Prime and premium Choice beef rang out, with the target-consumer consensus suggesting five percent and 31 percent, respectively. Actual production levels for all beef in those categories during 2011 was two percent and 20 percent, 14 points short of expectations.

Science has proven marbling at those levels brings increased eating satisfaction, so it’s no surprise that the NBQA showed consumers want more of that beef.

The audit format asks customers who buy feeder calves, fed cattle, beef carcasses, subprimals and variety meats to define seven quality attributes. Those included food safety, eating satisfaction, cattle genetics, visual characteristics, how and where cattle were raised, lean, fat, weight and size. Once ranked, the survey burrowed deeper into the meaning and value of each.

On the production end, feeders, packers and allied industry ranked “tenderness” as the top definition for eating satisfaction, followed by “good beef flavor.” Respondents in the foodservice and retail industries had it just the other way around.  

“We need to continue striving toward improving eating satisfaction, and there will be an emphasis on flavor there,” Belk said. “Flavor has pulled to the top; once you have satisfactory tenderness, then flavor is all of a sudden elevated in its relative importance.”

In foodservice, 63 percent of respondents favored flavor as their definition, while 52 percent said tenderness and 29 percent called it customer satisfaction.

“This was the first year that we saw flavor mentioned more importantly than tenderness,” said Deb VanOverbeke, Oklahoma State University animal scientist. “Flavor really was emphasized by the end users, but it is still defined differently among those who are buying live cattle.”

All NBQA respondents were purchasers of live animals or beef product, and VanOverbeke said that divide reflects their views on the resale value of each quality term. In this era of branded beef programs that reward higher quality and consumer-based targets, performance further down the chain has become more valuable.

“They are looking at where to filter the product in once it is in their system,” she said, “trying to determine how to best spend and best capture each dollar.”

The terms by which eating satisfaction was defined may have differed among the segments, but their pursuit of that dollar never wavered. A new aspect of the study brought to light beef buyers’ willingness to pay for the traits they found most important.

While only two percent of those who purchase live cattle said that eating satisfaction was a requirement they must have in order to buy, nearly half of them said they’d pay a premium of 11.4 percent to guarantee that quality. That premium level ranked number one in the amount packers and feeders said they would pay above base price to guarantee any quality attribute.

VanOverbeke said readiness to pay that premium on the live-animal side may correlate to another term the NBQA worked to define: cattle genetics. Packers, feeders, retailers and foodservice professionals defined “cattle genetics” for quality as a predominantly black hide. Four out of five listed “genetic potential for marbling” as their second-ranked term.

Those definitions likely pertained to feeders who are supplying branded beef programs, she explained: “If they know what those genetics are going to get them, they might pay a premium for those cattle because of how they typically perform.”

More than 20 percent of respondents closest to end users said “eating satisfaction” was an absolute requirement for purchasing. That quality had the highest share (47 percent) of respondents willing to pay extra as well—about 11 percent more—to guarantee it.

Belk said taking a whole-industry perspective from the survey illuminates a clear path the success: “If you align a supply chain that addresses a specific consumer target and has specific process control all the way up and down the chain to address that target, then the whole system is more profitable.”

VanOverbeke agreed the bottom line comes down to tying all those surveyed industry segments together: “If you know who your customer is and you know what they are looking for, you are more likely to target some premiums that you might be able to earn by doing a few things differently.”

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