In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with John Stika, president of Certified Angus Beef, who says Certified Angus Beef Prime continues to be a major success story as consumers show strong demand for higher-quality beef.
Certified Angus Beef Prime Reaches Record Levels
Stika says Prime is no longer the niche product it once was, with Certified Angus Beef Prime making up a record share of the brand’s carcasses. “Certified Angus Beef Prime has been phenomenal, and we’re seeing more Prime in the marketplace than ever before,” Stika says.
Today, Certified Angus Beef Prime carcasses account for a record 16% of all Certified Angus Beef carcasses available. Stika says sales are also showing the strength of consumer demand. “Our Certified Angus Beef Prime sales are on record pace, up 13% for our brand at a time when our brand as a whole is relatively flat,” he says.
Stika says the push toward higher quality is happening across multiple segments of the beef marketplace. “This push towards quality is real, and consumers continue to respond to that,” Stika says. “It’s not for every consumer, but what we have found is there are both domestic and international consumers that seek out a higher quality product with Certified Angus Beef Prime.”
He says Prime is no longer limited to traditional high-end dining. “This isn’t limited to the white tablecloth restaurant like we used to think those products were sold at,” Stika says. “It’s retail, it’s food service, it’s domestic, it’s international.”
Prime Has Gone Beyond a Niche Market
The growth in Prime has been significant enough that Stika says the beef industry is entering new territory. “This year, for the first year ever, we will produce more Prime than we will Select, and we’ll do that in a fairly large way, as well,” he says.
Stika attributes the shift to a combination of intentional industry efforts and strong economic signals from consumers. “I think it’s been the intentional effort, very loud economic signals in terms of pull-through demand from consumers that said they want more quality,” he says.
With Prime production continuing to increase, Stika says the industry will need to continue communicating the value of high-quality beef to consumers. “With Prime levels where they’re at, I think the key is that programs like us, the checkoff, the beef industry as a whole, we need to continue to make sure consumers understand the quality of that product, so we can continue to keep premiums in the market for Prime production,” Stika says.
He says the growing supply of Prime is ultimately a positive challenge for the industry. “But that’s a good problem to have,” Stika says. “We’re willing to take that problem and challenge on as we continue to see Prime levels continue to rise and consumers to have great experiences with that product.”
Quality Signals Continue to Reward Producers
Those premiums are also an important part of encouraging cattle producers to prioritize the specifications needed to qualify for the Certified Angus Beef program.
Stika says producers have responded strongly to the economic signals coming from the marketplace. “There’s no doubt that this industry is very committed to doing the right thing and putting a higher quality product out there is the right thing to do,” he says.
However, Stika says producers are more likely to make those management decisions when the economics support them. “At the same time, doing that right thing is easier to get accomplished when the economic signals support it and aren’t working counter to where we feel we need to go as an industry,” he says.
According to Stika, those signals have been clear. “The economic signals have been very loud, very clear: put more quality in the market,” he says. “Producers have responded to that. Consumers have won. Producers have won.”
Stika says that increased demand for quality beef is especially important during a period of high cattle prices and tight supplies. “In a time of high prices and tight cattle supplies, that demand that we’ve built as a result is probably why we’re being able to see these record-high prices for live cattle that we see today,” he says.
“It’s just honestly, it’s just a great story to tell that everybody ought to take a great deal of ownership in,” Stika adds.
Ground Beef, Multicultural Sales Among Future Opportunities
Looking ahead, Stika says Certified Angus Beef will continue building on the demand for Prime while also looking for new opportunities across the beef marketplace. “I would tell you specifically, with what we’re seeing here over the next few years, and prices probably going to remain high, growing more premium ground beef category, growing our sales in that ground beef category continue to be a focus,” he says.
That includes Certified Angus Beef Prime ground beef. “I’m not just talking Certified Angus Beef; I’m talking Certified Angus Beef Prime grinds,” Stika says.
He says ground beef will be an important area of growth for the brand both domestically and internationally. “That ground beef category is going to be a focal point for our continued growth, both domestic and internationally,” Stika says.
Stika also points to multicultural sales at domestic retail stores as another opportunity. “Multicultural sales at domestic retail stores is an area that we know offers considerable opportunity for us as a brand and the beef industry as a whole,” he says.
Value-added products will also remain a focus as consumers look for convenient ways to purchase premium beef. “We can’t make these products convenient enough, you know, for consumers today,” Stika says.
He says premium beef has opportunities across a wide range of outlets, including traditional retail, restaurants and convenience stores. “There is a shopper looking for a premium product, and usually value-added products become a really good solution for that venue,” Stika says.
Certified Angus Beef Remains Focused on Its U.S. and Canadian Supply
Stika also discussed the ground beef market and the use of imported lean beef in traditional ground beef blends.
Certified Angus Beef only certifies carcasses in the United States and Canada, meaning the brand’s ground beef supply comes from cattle certified through its program.
“We only certify carcasses here in the U.S. and Canada,” Stika says.
He explains that Canadian Certified Angus Beef grinds generally remain in Canada, while U.S. Certified Angus Beef ground beef uses raw materials from cattle certified in the United States.
“So I think we’re kind of removed from that broader conversation that’s taken place about imports of lean raw material to be mixed with the fat trim that we have here,” Stika says.
“That, again, makes a wholesome product for the consumer here, but really doesn’t necessarily directly apply to the brand today,” he adds.
Consumer Information Will Help Shape Future Labeling
When asked about the “Product of USA” label and whether it could play a role for Certified Angus Beef, Stika says the brand will listen to what its customers and consumers value. “We were thinking about some of this based on what our customer has to tell us,” he says.
Stika says Certified Angus Beef can help retailers, restaurants and other partners communicate information that matters to their customers. “We’re here to make sure if the customer sees value in that, then we’re sure here to help them market that as a part of their message with Certified Angus Beef,” Stika says.
Ultimately, he says the goal is to give consumers the information they value when making beef purchasing decisions. “It’s really making sure that the consumer has the information that they want and they value on the labels,” Stika says. “We’re in a spot to be able to help our individual retailers and restaurant partners and so forth communicate that message as they see fit.”
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR above for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
