ILC examines new marketing trends
By Larry Dreiling
The cattle industry must adapt to emerging new demographics if it wants to capture new market share.
So said Dr. Lowell Catlett, regent's professor and dean and chief administrative officer of the College of Agriculture and Home Economics at New Mexico State University.
Catlett, considered a leading agricultural futurist, was the keynote speaker at the third International Livestock Congress, held recently at Denver, Colo.
Catlett prefaced his remarks with a simple sentence.
"I'm weird as hell, folks, so bear with me."
Catlett described the good old days when he was a child in the 1950s on his family's Texas Panhandle ranch, being told by his parents to clean his plate.
"Why'd we have to do that? Starving children in China. Comfort food we call it now, but back then it's what we ate. That's the world we lived in, a world where we made sure there was enough food to eat," Catlett said. "Our folks told us to shut up. Be happy you got it. On the farm, it used to be you could slaughter an animal, cut it into the primals and get it ready for the table. Since we live in town now, we want filets with no extra trim."
That's because Catlett, admittedly, is part of the 82 million strong Baby Boomer generation.
"We didn't grow up. We protested on college campuses, were into free love, smoked dope, did drugs. We still do drugs, except now it's Metamucil," Catlett said. "If you are in this generation, you spend money. If our parents had money, they didn't spend it. They didn't grow up that way."
Today, Catlett said, everyone from baby boomers to millenials live in what he calls "dream space"--a place where wishes need to be fulfilled in hopes of reaching the pinnacle of psychologist Abraham Maslow's hierarchy of needs--that of self actualization.
"That's known as finding yourself. I can hear my father now, if I was leaving home to go find myself. He'd tell me to go find a job," Catlett said. "My father's generation would go, 'What the hell are you thinking?' I mock it because he would say be happy you got food."
Now people have money, Catlett said. Money changes everything.
"It changes beef. It changes lamb. It changes chicken. It changes asparagus. It changes everything. In this world, there is no such thing as just organic.
"Instead, it's things like, 'I want my chickens free range and farm fresh. I want the farm miles to be low, so that you can slaughter the chicken and bring it to the restaurant within five miles. Please, no antibiotics in the feed. I want Prime steak. I want a skinny latte with a twist.'
"Only when you get into dream space, in the consumer world, do you have people start differentiating or segmenting and they start saying things like this," Catlett said. "All those things aren't wrong. It's the consumer. People afford what they want."
That means consumers will pay extra above standard commodity prices for beef that is segmented into targeted markets.
"I'm not opposed to organic. I won't pay more for it, but I know some people who will. There is a whole bunch of people who will," Catlett said. "They want it all kinds of ways. You give me enough money and I'll wrap it in gold foil. Understand again, people afford what they want."
People around the world are able to afford what they want more than ever, Catlett said. As more than one billion of the world's population moved from abject poverty to middle class in the last 15 years, there has been a four-fold increase in the worldwide consumption of beef.
"Fifteen years ago, we had a billion people in poverty. Today, we have 370 million Indians, 331 million Chinese, 42 million Brazilians, and 39 million Mexicans, all of whom lived in abject poverty, and now are in the middle class.
"It's just one-tenth of the overall Chinese meat consumption but it's growing," Catlett said. "As people move into dream space, the pounds of beef will go up primarily in countries where there was none before. The ones that have had beef before will now want it free range or grass fed, organic, or green or whatever. They'll want it to be Angus or Hereford. I'm not making fun of it, but it's the new world. Find out what people want and give it to them."
The dream space demand also comes from the generational change that what was a luxury to one generation is a necessity to the next.
"As people start moving up from poverty, they start differentiating and segmenting in ways you'd never dream possible. Think of the clothes dryer," Catlett said. "My daddy would just say 'The sun is the perfect dryer.' Now if my dryer goes out, in five minutes I'm at Sears. It's that way with beef."
Cattle producers will have to be nimble enough to look at a differentiated market that is global in reach, Catlett said. What an Australian wants may be different than an American or Chinese.
"They want beef and want it in their form. Give it to them. Also, give them the ability to see cattle in open spaces, with the sunshine. You cannot separate plants, animals and people," Catlett said.
Not only will nationality have a role to play, but age, marital status and sexual orientation also will be key demographic targets for cattle producers of the future.
"If you are a female over 60 in the U.S., Canada, Europe, Japan and Australia, half of you do not have a significant other," Catlett said. "They are the most significant and profitable demographic of the travel industry. They are the second largest purchaser of homes in the U.S. and Canada. They purchase them at a rate three times as much as single men. They buy in upscale places like Cherry Creek in Denver, where they can walk to shop, eat and maybe even work.
"Over the age of 60, the demographic is 57 percent heterosexual women to 43 percent heterosexual men. Women with a spouse six years or more years younger total 3.3 million. They call them Cougars.
"Another demographic to look at is homosexual men. They outnumber homosexual women two to one. In the U.S., that translates to 5 percent of the population. Because both groups-women over 60 without a significant other and homosexual men-are conscious of their appearance, what they want are smaller steaks. That means growing smaller animals to make smaller middle meat cuts that will fit nicely and look attractive on the tray in the meat case."
Older men with children also are an important demographic that requires more attention.
"Men 50-plus with a newborn 15 years ago was less than one in 25 in the population, now it's one in 10," Catlett said. "We don't have a name for it, but if I'm 80 with a teenage son I want to play ball with, do I need more conjugated linoleic acid in my diet? Yes."
With so many new demographic units, there ought to be plenty of ways for producers to profit, Catlett said.
"I'm not making fun of anyone. This is the world today," he said. "It's filled with so many different food opportunities, that everyone can make money and be happy. You can give me plain old hamburger meat or give me a filet from a free range steer.
"The world likes beef. It likes organic beef and it likes non-antibiotic beef. It likes beef from happy cows. Whatever you can deliver, people want what they can afford. It's more than about calories. It's about entertainment. It's about fun. Go produce it."
Larry Dreiling can be reached by phone at 785-628-1117, or by e-mail at email@example.com.