Creating new beef chains

 

 

THERE'S greater returns to be had from beef for those who want to pursue them - but they won't come quickly or easily.

As Coles has flagged, consumers are increasingly buying beef based on "extrinsic" attributes, such as how and where it is produced.

Many of Coles' marketing cues come from the United Kingdom, where between 1999-2008, consumers more than tripled expenditure on "ethical food and drink" to £6 billion.

A similar trend was underway in Australia, according to Beef Co-operative Research Centre (CRC) researchers, Wendy Umberger and Garry Griffith, who contributed a chapter to the Australian Farm Institute report on public vs. private standards in supply chains.

Australia's domestic beef production is now largely channelled through four major processors and two major retailers, who are exerting greater control over suppliers and imposing their own private standards on beef, with implications through the supply chain.

"These private standards are likely justified," Dr Umberger and Professor Griffith wrote, "as consumer demand is changing and retailers are concerned about liability issues related to food safety and the integrity of product claims".

Meat processors were attempting to stall the power shift toward supermarkets with their own branded beef products, like JBS's King Island Beef and Tasmanian Premium Beef, marketed as "no added hormones, grass-fed and free range".

But as with Coles's hormone-free push, this imposed another set of top-down standards on producers.

Whether producers want to engage with these new chains should be the subject of a careful cost-benefit analysis, the authors said.

Alternatively, they may - despite the considerable costs and risks - want to develop their own value chain in the footsteps of pioneers like South Australia's Richard Gunner or Rod Polkinghorne in Victoria.

Dr Umberger was part of a trial last year that indicated the attributes consumers were willing to pay extra for.