Sixth record sales year for top quality beef brand
CAB celebrates another record despite market challenges
Amid U.S. cattle and beef supplies curtailed by economics and drought, Certified Angus Beef LLC (CAB) reported record sales of its signature brand for a sixth consecutive fiscal year that ended September 30.
More than 16,000 licensed partners around the world made that possible by capitalizing on the consistent dining experience the premium brand brought to consumers as prices for all beef continued higher. Sales totaled 811 million pounds, surpassing last year’s record by 4 million pounds and up 49% from just six years ago. During that period known for its challenging consumer economy, Certified Angus Beef ® brand sales advanced from representing 5.6% to now more than 9.6% of all federally inspected cattle harvest.
That continued growth speaks to brand partners’ commitment to provide and serve the highest quality Angus beef available, and attests to increasing consumer demand for premium products, said company president John Stika.
“It is only because of our partners’ dedication and commitment that we see gains. Their hard work and leadership of the quality beef movement is what makes this brand relevant and successful,” he said.
Sector success stories
Growth varied between company sectors, led by the foodservice and international divisions. Across all areas of the business, partners with the greatest success did so by stepping up their commitment to the CAB brand using innovation, creativity and targeted promotions. Sales hit all-time highs in March, August and June with the most growth seen in clod sales from the chuck and in all the grinds.
Comprising more than 32% of total CAB business volume, foodservice sales grew more than any other area at 4%, setting an annual record of 260 million pounds. That came mainly from end meats and grinds, up 6 million and 10 million pounds, respectively.
With consumers more closely monitoring expenses and tracking favorable dining experiences, direct sales to licensed restaurants climbed 16%. Those establishments recognized the continuing demand for high-quality beef, and took steps to add brand messages on restaurant menus, magnifying their ability to communicate the value advantage to consumers.
Though retail sales declined a slight 2%, the division finished strong with summer grilling months among the highest ever for sales. Partners with the most sales tended to have the most brand features in their advertising circulars. Of the top 25 CAB licensed retailers, those with increased sales also had an average of 10% more front page ads compared to 2011, and placed 47% more brand ads overall.
The return to record-setting international sales is particularly notable since that finally moved past the global U.S. beef sales setback of 10 years ago. Record sales months in February and March demonstrated that market access issues and product flow disruptions would not keep international sales from rising 4%, reaching 94 million pounds in 55 countries. Canada and Mexico remain the strongest foreign markets, and the brand was introduced in Colombia, Peru and Chile.
The value-added products division’s record 21.5 million pounds blew past its 2011 record by 16%. That success was led by the introduction of such convenient, high-quality items as retail-packaged marinated cuts and fully-cooked refrigerated and frozen entrees.
With drought conditions across North America factoring into an overall decrease in supplies, 3.24 million cattle were accepted for CAB, down 320,000 head from 2011 but still the third-largest number to qualify in any year. The key to sales records in spite of lower cattle supplies came from the increase in pounds sold per carcass. That utilization increased 10% from 2011, demonstrating additional packer commitment to meeting demand for the premium brand.
The opening of the Education & Culinary Center in Wooster, Ohio, last February should advance further collaboration with partners and bridge the gap between ranchers and consumers through innovative education, Stika said. Since its opening, more than 40 groups have participated in programs that included menu merchandising, discovering and using new cuts, beef science and more.
On the supply side, the GeneMax™ DNA test for gain and grade potential, just introduced at the middle of the fiscal year, saw orders for more than 3,000 test kits from more than 70 Angus ranches by year’s end.
“As we and our partners enter fiscal year 2013, continued success depends on staying focused on listening and understanding consumer demand,” Stika said. “We must prepare for anything but stay intentional on providing a memorable dining experience that delivers time and time again.”
The brand’s 16,000 businesses partners worldwide generate an estimated $4 billion in consumer annual sales. Introduced in 1978, CAB is a cut above USDA Prime, Choice and Select thanks to 10 added quality standards. For more consumer information, visit www.certifiedangusbeef.com, or the blog at www.GoRare.com. For producer information, go to www.cabpartners.com or follow the brand on Facebook and Twitter.