HEALTH-MINDED CONSUMERS are reaching past the produce department, beyond the granola and over the Gardenburgers to seize what was once one of the most inaccessible natural/organic categories: beef.
The growth is evident at Marsh Supermarkets, Indianapolis, where the company has just launched its new line of "Marsh Premium Gold Ultra Black Angus" all-natural beef. Dewayne Wulff, vice president of meat merchandising, said that a successful summer rollout of Maverick Ranch all-natural meats at the company's O'Malia's locations convinced him that a growing base of consumers would pay a premium for beef raised with no hormones or antibiotics.
"It's the young professional, the health-conscious consumer, the younger couples who have children and are concerned about nutrition and food additives," said Wulff. "They've heard so much about the antibiotics, hormones and growth stimulants used to raise cattle, and they want to choose a product that they know will not contain those."
The antibiotic and hormone claims alone may not be enough to win a loyal customer, however. In a survey conducted by Kansas State University, 1,000 customers at Ball's Food Stores in Kansas City, Kan., were evenly split, based on loyalty card data, into two groups: "natural food eaters" and "beef eaters."
When asked to rank a list characteristics that would affect their purchase of natural beef, the natural food eaters said tenderness was most important. The presence of artificial ingredients tied for sixth with "presence of marbling" for that group.
The beef eaters ranked color first and tenderness second. Citing new marketing initiatives, Ball's declined to comment on the study.
"Basically, what we found was that the consumers who were buying natural beef thought it had a better taste," said Michael Boland, associate professor of agricultural economics at Kansas State and an author of the study.
Like most hormone-free beef, the product sold at Ball's was aged longer than conventional beef, which partly explains the difference in flavor and tenderness, according to Boland.
"Customers who go to natural food stores to buy meat are already looking for something that's hormone- and antibiotic-free," said Boland. "At conventional supermarkets, the all-natural claims might drive trial, but I'd think it's the aging process that keeps customers coming back to buy more."
If this is the case, marketing efforts focused on education and sampling are most likely to inspire customers to dig deeper into their pockets for these premium-priced brands.
D'Agostino Supermarkets, Larchmont, N.Y., recently hosted an event at its D'Ag Fresh Market locations in New York City featuring prize giveaways, costumed characters and a live remote with Radio Disney. Creekstone Farms was there to offer samples of its all-natural Black Angus brand straight from the grill, along with information and coupons ranging from $1 to $5 off their products inside. Buyer Pat Golia said D'Agostino began offering the brand in late summer after a successful June launch of Creekstone Farms' Premium Black Angus beef.
At Marsh, Wulff said his meat departments will aggressively promote the new Premium Gold Ultra brand through print advertising, direct mail, bag stuffers, window banners, informational brochures, in-store signs and point-of-sale materials.
"We're using any means that we can find to get this information into consumers' hands," he said, adding that food safety and mad cow disease scares had "absolutely" led to increased customer interest in all-natural beef. Brands marketed as hormone- and antibiotic-free must be fully traceable. "If there was any type of a recall, we would be able to tell our customers exactly where our beef came from, all the way back to the cattle's birth," he said.
He and other experts cautioned, however, against aggressively promoting the products based on safety, traceability or negative contrasts with existing products.
"You've got to do your marketing in a way that doesn't draw negative attention to any qualities of your existing beef," said John Nalivka, president of Vale, Ore.-based Sterling Marketing. "There are the people who already want to buy natural based on the claims presented on the package and POS materials, and they are going to buy it anyway. But other people will ask questions, and the employees at the service counter need to be able to answer those questions honestly and accurately. If they can't, that customer may walk away with a negative impression of one brand or another."
Sales of organic meat, fish and poultry, meanwhile, spiked almost 78% in 2003, according to the Organic Trade Association, making meats the fastest-growing major segment of the organics industry. But at $75 million nationally, those sales accounted for only 1% of organic foods sold in the United States last year.
The ranchers and marketers who discussed the issue with WH said demand for organic and natural meats has been strong from both the restaurant and food retailing industries, particularly within the past three years, with several citing "double-digit" growth.
However, there are signs that booming demand may be a mixed blessing for the tiny category. The average price per pound of organic and natural beef rose 22% in the 52 weeks ended July 31, according to data from Fresh Look Marketing, Hoffman Estates, Ill., which combines the two categories.
Wulff said the retail premium on the all-natural products at Marsh ranged from 50 cents to $1 more per pound than the company's regular premium brands. Prices for certified organic beef, which in addition to being hormone- and antibiotic-free must be raised completely on organic grasses and grains, can be much more expensive.
During months when the cost of meats rose across the board, the price spike put significant pressure on volume in several regions of the country, said Peter Swanson, director of client services at Fresh Look. On the East and West Coasts, the category has continued to grow despite higher prices, but nationally, "volume sales have fallen 12.5% during the past year."
The reason, Swanson said, is simple: "It's the price point. I think there's definitely consumer interest there, but when prices are significantly higher, many customers are going to reach for an alternative."
WHAT'S YOUR BEEF?
GRASS FED: Pasture-raised from birth to slaughter, grass-fed beef is typically leaner and richer in omega-3 fatty acids than grain-fed beef. Advocates said it's beef the way nature intended; detractors said grain-fed beef is more consistent in flavor and texture. Although the U.S. Department of Agriculture doesn't stipulate other restrictions to grass-fed marketing claims, most grass farmers also claimed not to use pesticides, added hormones or antibiotics.
ORGANIC: This became a federally regulated class of beef following the implementation of the National Organic Program in October 2002. Certified organic cattle are raised on pesticide-free pastures and finished on organic grains during the weeks before slaughter.
No supplemental hormones or antibiotics may be adminstered in any form during the cattle's life.
NO ADDED HORMONES, NO ANTIBIOTICS: These separate claims indicate that cattle have never received supplementary hormones, which some scientists believe are linked to human cancers; or antibiotics, which can lead to resistant strains of foodborne pathogens. However, USDA currently allows a range of similar claims, such as "no subtheraputic antibiotics" in the cattle's feed. Some ranchers, along with retailers such as Whole Foods, have told USDA that these other claims should be eliminated under simpler, stricter standards.
Natural: Under current USDA guidelines, any meat can be defined as "natural" if it contains no coloring, preservatives or additives, and is minimally processed after slaughter. Some ranchers hope USDA will adopt a stricter standard that prohibits the use of hormones and antibiotics. For now, most brands marketed and tracked as "natural beef" highlight each claim separately.