Certified Angus Beef brand partners enjoy record June
As Labor Day ushered in the fall grilling season, with a nod toward the season's more traditional pot roast, some in the beef trade were stewing over supply concerns.
While all beef costs more this fall, those selling the best can maintain confidence in consumer acceptance, as seen in June sales reports announced recently.
Partners with the Certified Angus Beef brand sold 74 million pounds of steaks, roasts, burgers and other products in June, 4 percent above a year ago and the highest monthly volume in the brand's 34-year history, said Mark Polzer, vice president of business development.
"We've been fortunate to continue growing in spite of the declining overall beef supply," he said, noting the result of recognized value for the money. "As beef prices in general have had to go up, that created an opportunity for our brand to set itself further apart. If you have to pay a bit more for beef, you certainly want an enjoyable experience, and I think that is what we deliver."
Promotions such as the retail "Steaks of Summer" and the foodservice "Middle Meat Smackdown" helped lift sales, especially among licensed restaurants.
"Foodservice business has been up all year, and June sales of 23.5 million pounds in that sector accounted for 31.8 percent of the total," said David O'Diam, CAB business development assistant director. It didn't hurt to have eight new foodservice distributors sign on this year, he added.
"Retailers had a harder time keeping CAB at a 'hot price point' on front-page flyers, the ads that drive about 70 percent of their sales, so they were down slightly," O'Diam said. "But they are rolling out some new strategies this fall to hit those price points."
International business was brisk and on pace for a new annual record. The 11.5 percent of June sales as exports to 54 countries compared to 10.1 percent of the smaller 2011 month and 9.6 percent of June 2010, Polzer reported.
Sales by primal cut favored the chuck and round, and grinds--drawn mainly from those end meats--were up most of all.
"We've seen that people are a little more adventuresome and willing to try more of the new cuts like the flat iron, teres major and boneless short ribs," Polzer said. Sales of those cuts were up 26.7 percent, 17.8 percent and 47.6 percent, respectively, June over June volume, the short ribs nearly doubling to 1.34 million pounds.
Fewer cattle have been accepted for the brand in fiscal 2012 to date, and overall USDA-inspected harvest was down 2.5 percent through June. Yet Certified Angus Beef brand sales are on pace to match or exceed last year's annual record.
Carcass weights averaging 15 pounds more for the year at 836 lb. help explain that, O'Diam said. "But it's more than that. Demand has been significant on the declining national beef cattle harvest," he said. "Our brand drives demand and packer profitability as shown by their willingness to put more pounds from each carcass in a box."
That average carcass utilization number was 248 lb. sold this June compared to 211 lb. the previous year.
Volume is only part of the story, added CAB Vice President Larry Corah. "We not only are selling a lot of pounds but at a significantly higher price point.
"The spread between CAB and Choice is twice what it was last year and individual cuts are as much as $1.50 higher per pound," he noted. "Grinds are 21.7 percent higher than last year--all of this is telling us consumers are willing to pay more for a great eating experience."
Summer months tend to be among the heaviest in Certified Angus Beef commissioned sales, O'Diam said. Over the past five years, June, July and August have accounted for 8.92 percent, 9.08 percent and 9.19 percent of annual sales, while other months range down to 7.4 percent. Given that trend, the next monthly record could be waiting in the late-summer reports.
Polzer assigned credit beyond the brand's marketing team: "It's our licensed partners who really do all the heavy lifting, getting the product into the proper channels. That it is paying off with these positive results."