|
|
|
CAB at 30The first pound of Certified Angus Beef sold Oct. 18, 1978, at Renzetti's IGA, in Columbus, Ohio, under the leadership of its first executive director, Mick Colvin. By 1983, the program's licensees were marketing a million pounds a month, a benchmark achieved every few hours these days. Thirty years after that initial sale, the brand that revolutionized the beef industry is celebrating the milestone from its headquarters in Wooster, Ohio. "The introduction of this brand, based on high-quality carcass characteristics, was a huge paradigm shift," says Bill Rishel, 1996 CAB board chairman from North Platte, Neb. "The idea ranks as one of the greatest of all time, a catalyst for changing the whole economic picture of an industry." CAB debuted when Angus influence had fallen to one-third of the nation's herd and USDA quality grade standards had been lowered. Consumers still wanted consistent, highly marbled beef, but producers needed incentives for hitting that target. "The pull-through theory worked exactly as it was envisioned, of course, building demand for Angus cattle," says Henry Bergfeld, Summitville, Ohio, board chairman from 1997 to 1998. Today, Angus influence is at 60 percent of the cowherd base while 18 percent of progeny qualify for the brand that helped define value-based marketing. The CAB supply development team began working in 1980 to forge a closer link to producers, but the first premiums weren't noted until 1986. By 1995, the company accessed 80 percent of the U.S. packing base, and in 2000 the first Canadian packer produced the brand. By 2007, packers had paid a cumulative $250 million in premiums, just for the CAB component of their value grids. That's all possible because licensed restaurants and retailers--13,500 of them in 39 countries today--send demand signals back through the system. "We really strive to differentiate ourselves from other retailers," says Ed Steinmetz, vice president of meat and seafood for Giant Eagle, based in Pittsburgh, Penn. "The CAB brand is one way we do that. It has a proven track record and a selection process that's second to none." It was the first USDA certified program, and built entirely on science-based carcass specifications. "Back in 1978, we sold a lot of carcass beef," says Bob Norton, chairman of the board in 2003-2004 and 2006. "Over the next two decades an evolution occurred in the way we process cattle. Most of that external fat is taken off in the packing plant now." At the same time, the trend toward bigger cattle produced rib eyes too large for foodservice and retail. In 2006, the board voted to replace the yield grade 3.9 cap with more specific limits: a rib-eye area of 10 to 16 square inches, hot carcass weight less than 1,000 lb. and external fat thickness less than 1 inch. In addition to increasing uniformity, CAB has further differentiated itself in its recent history by adding CAB Prime in 2000 and CAB Natural in 2004, under the leadership of then-president Jim Riemann. That "never-never-never" program requires the same 10 CAB specifications, plus cattle must not receive antibiotics or hormones, nor consumer animal byproducts in feed. The brand has branched into value-added product categories like deli meats, frankfurters and heat-and-serve entrees--products highlighted at the 2002 Olympic Winter Games in Salt Lake City, Utah, where CAB was the beef supplier. The international division has grown steadily over the years, and bounced back after bovine spongiform encephalopathy was found in a U.S. cow. The export share of CAB sales dropped from 17 percent in 2003 (prior to BSE) to 9 percent in 2005, but the division used the disaster to strengthen ties down the road. "Our efforts better positioned us moving forward as the markets reopen," says current CAB President John Stika. "We're growing our CAB business at a quicker pace than even U.S. beef overall, recovering volume share in these same markets." The shift in focus led to a 51 percent growth in Canadian sales in 2007 and another 25 percent this year as that country sits atop the list of international markets with 23 million pounds. Similarly, sales to Mexico increased by 20 percent in each of the last two years to reach 18 million pounds. CAB, once called a niche program by many, certifies nearly 8 percent of all cattle in the mix today. "With the combination of a high-quality product, brand integrity and great people promoting the product, the brand looks toward a future of a billion pounds sold annually within the next 10 to 15 years," says Brent Eichar, CAB senior vice president and 21-year employee. "That's not automatic. It's going to take a lot of continued hard work at every level and by each link in the chain." 10/20/08 Date: 10/15/08 Advertisement
Copyright/Privacy
Copyright 1995-2009. High Plains Publishers, Inc. All rights reserved. Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com |
Market Snapshot Inside Futures |
