Indiana Correspondent

DENVER, Colo. — As domestic sales of beef broaden from commodity only to following the trend of natural-branded beef, where the mind goes the sales will follow, so to speak. Natural beef, while still considered an infant by U.S. beef sales standards, (experts estimate natural is about 2 percent of beef produced) is being launched overseas to targeted, high end markets.

“The natural beef market in places like Japan was just beginning to grow before BSE (bovine spongiform encephalopathy). Of course, now our primary emphasis is to get back into the market with them, not necessarily to differentiate between niches,” said Lynn Heinze, vice president of information services for the Denver, Colo.-based U.S. Meat Export Federation (USMEF).

While the USMEF tracks tonnages of a variety of protein exports, Heinze said presently there is no accurate record of the amount of U.S. natural beef moving overseas. “Natural is not well defined yet,” he said. “This is definitely likely to change and the market is growing rapidly, but when it’s just a few percentage points of the total (volume of beef sold), it’s just hard to define.”

Organizations of every size and scope are beginning to sell internationally as markets closed as recently as 2006 open up once again to U.S. export. One of America’s most recognized beef brands, Certified Angus Beef (CAB), added a natural program in 2002 and began offering CAB Natural to international distributors last year.

“In the last twelve months, eight different exporters have moved a total tonnage of 12,000 pounds of CAB Natural,” explained Mark Spengler, Director of International for CAB. Spengler added that about six million total pounds of CAB Natural was marketed in the last twelve months, but he sees the export of natural product growing. “The volumes are still fairly small for CAB Natural, but just this year our natural exceeded our CAB Prime production.”

Presently, outside the U.S. the interest in CAB Natural has mostly been from high-end restaurants. “We’ve got no viable retail (overseas) for natural right now. We’re looking for restaurants that want to differentiate their menus,” Spengler said adding that domestically, however, retail is a dominant component of CAB Natural’s overall sales. In fact, retail exceeds the food service sales. Barriers to exporting natural beef exist including price, country-specific source verification requirements, an inconsistent understanding of what the word ‘natural’ means and communicating the value of a higher priced product. Yet, one of the largest kinks starts at home.

“Internationally, consistency of supply is a big thing,” Spengler pointed out. “There is some reluctance to get heavily involved and put something on the menu because of uncertain supply.”

Working with Tyson Fresh Meats to market their Star Ranch Natural Angus brand, the Beef Marketing Group (BMG), based in Great Bend, Kan., is just gearing up to export natural beef. Even networked with a heavy-hitter like Tyson Foods, they, too, recognize supply as a major factor in establishing lasting export business. “I’m telling customers, that it’s not like commodity beef, you can’t just jump in and jump out. You’re going to have to commit to a consistent supply,” said John Butler, general manager of BMG. “Right now we don’t have a lot of natural beef (to export), but what we do have, we’ll have available to distributors consistently.” BMG and Tyson are working to sell their product at the retail level; a market segment that they believe will eventually allow more profitability throughout the chain.

“Food service puts too much focus on middles. Retail makes the most sense for us because that’s the best carcass utilization,” Butler said.

The NCBA (National Cattleman’s Beef Association), located in Centennial, Colo., also doesn’t track tonnage totals for natural beef, however they do keep up with producer marketing trends.

“Natural, organic and other specialized types of beef still make up a very small portion of the beef business overall, both domestically and overseas,” began Joe Schuele, NCBA communications director.

“But, as long as consumer interest continues to grow, cattle producers will certainly respond to that demand. Differentiating their product in this way can be a great strategy for some cattle producers to add value to their livestock and bolster their profitability.”

What is the opportunity for producers? Even in the Southeast and Midwest, producers can sign up to feed for natural brands. Butler said that producers willing to raise cattle to fit specific criteria will have great opportunities to fit in.

“There are two basic types of customers. The first area is Asia, especially Japan and the second is Europe,” he added. For CAB, the market right now is the Caribbean, though Spengler also sees Japan as increasingly interested in U.S. natural product. “The big opportunity in Asia is because of the accountability and traceability. These assets are already by-products of natural programs that add value,” Spengler said.

Attractive producer incentives are the standard in natural programs though changes in production practices and record keeping may dissuade some producers. Companies such as Maverick Ranch Natural Meats, also based in Denver, are even adding specific incentives for producers to raise beef for export by developing their own Export Certified Ranches. Maverick is also offering to cover export certifications fees of nearly $5,000 for producers that sign up. As growth blooms for natural beef at home, so, too may the ‘natural’ next step be selling beef abroad. “We’re not sure what the volume will be yet, but we’re just in the beginning stages of cultivating customers internationally,” Butler said.