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Can Canada’s beef producers benefit from online sales?

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This is the second post in our Spotlight on the Speakers series, featuring speakers from February’s Alberta Beef Industry Conference.

In our first post, we looked at the changing faces, places and consumption patterns of the Canadian beef market. This week, we’re learning how the retail trend toward online sales will affect beef producers.

Don Close, vice-president of food and agribusiness research at Rabo AgriFinance, explained that brick and mortar sales are flat, while online sales are growing and evolving. “I don’t think it’s necessarily detrimental to the beef industry,” he said. “It’s more that it provides an opportunity to access consumers via a different channel.”

“The biggest change,” Don said, “will be experienced by beef processors. They should expect changes in where they are delivering, servicing and distributing products to consumers. For most individual producers there will likely not be any meaningful change.”

Online opportunities

For those beef producers keen to take advantage of the trend, the online market offers a unique opportunity to establish their own branded products. “It opens up a new marketplace for individual producers, particularly if they have cattle with an exceptional set of genetics and want to capture a premium price for their premium product,” said Don.

Online sales could potentially provide beef producers with the ability to promote beef to consumers who are more typically non-consumers, or light-consumers, of beef. It could also provide an opportunity to persuade beef eaters to try different cuts or products.

Don explained that the biggest hurdle to creating meaningful sales via the online market is the investment required in branding, marketing and online sales tools.

“The tendency of the consumer is to choose large, national brands with a known identity,” said Don. “They have a high level of trust with those providers and they know what to expect. They are less likely to try the smaller, lesser-known brand.”

The sales and marketing resources necessary to make an impact on the online food market could potentially be more accessible to groups or collectives, rather than individual producers, he added.

You can hear more from Don in this video entitled ‘From the cart to the keyboard: how food purchasing habits will impact the beef industry’.

 

How population changes are driving the beef industry

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This is the first in our Spotlight on the Speakers series, featuring speakers from February’s Alberta Beef Industry Conference. This week, Andrew Ramlo, executive director of Urban Futures, spoke with us about the changing faces, places and consumption patterns of the Canadian beef market.

How age, ethnicity and lifestyles are changing the domestic market

Andrew, whose company, Urban Futures, specializes in demographics, explained that the domestic market for beef, and indeed all agricultural products, is undergoing a significant change on three major fronts:

Age: For the first time in decades, the baby boomers are no longer the dominant generation in terms of numbers. There are now more Millennials and Generation Xers than post-war boomers. This shift is having an impact on all factors of the market, including  what people consume and how they consume it.

“This younger generation demands to know where their food comes from, and how it was produced, giving rise to the popularity of niche products such as hormone-free, grass-fed and organic,” Andrew said. They are also increasingly in tune with diet and health, and this affects their food choices.

Lifestyle: “One of the major drivers of the market will be convenience,” Andrew said. “People have busy lives and kids to feed, so they need to have convenience in the ways things are prepared and packaged.”

Ethnicity: With a population that is increasingly ethnically diverse, the types of food eaten by Canadians is changing, and so is the way it is purchased and prepared. Canadian food producers must pay attention to the ethnicities of their consumers, and their eating habits or preferences.

An export market driven by growth

While the domestic market is being driven more by change than by the potential for significant growth, growth can be expected in the export market.

“The Asia-Pacific markets are going to be very significant,” said Andrew. “Particularly in China, there are a lot of consumers who have not historically eaten beef, but who are starting to be able to afford it.”

How immigration could affect beef production

We know immigration is affecting what Canadians eat, and how they prepare their food. But there is also the potential for more immigrants to be employed in the beef production industry.

“The Canadian government has increased their immigration targets from what it has historically been – between 275,000 and 300,000 – to about 340,000 by 2021,” said Andrew. “This is being done by and large in response to our aging population; to give us the ability to fill in the labour force as the baby boomers head toward retirement.”

“The government really needs to look at aspects of our labour market and do more targeted recruitment among potential immigrants.”

You can read more about the impact of demographics on the beef industry in Changing demographics mean changes at the dinner table.

Watch for future ‘Spotlight on the speakers’ posts.

Why ‘hormone-free’ beef is no better for people or the environment

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Last week on this blog we busted some common myths around beef production, including the ‘hormone-free’ myth. This week, we offer more facts about hormones and beef.

Foods and hormones

Dr. Roy Lewis, a veterinarian at Westlock Veterinary Center in Westlock, AB, told us that roughly 98 per cent of cattle in Canada are implanted with hormones, but in quantities significantly lower than would be naturally present in an intact (uncastrated) bull.

“In fact,” he continued, “many healthy, nutritious foods contain more hormones, serving for serving, than beef – foods such as cabbage, eggs, alfalfa sprouts and soy”.

Hormone levels in foodsNo one would suggest eliminating these healthy food options because of their naturally occurring hormones, and yet beef contains considerably less.

Research has also shown that hormones consumed in food are broken down in the stomach during digestion. They do not result in hormone spikes, even when consumed in high levels.

The environment and hormones

Cattle are implanted with hormones to promote growth. “This allows beef producers to produce more beef using less grain, less water and less time,” said Dr. Lewis. “The environmental benefits of producing more with less are significant.”

How marketing creates misconceptions

“There is no such thing as ‘hormone-free’ beef,” said Dr. Lewis. “All animals and plants produce hormones as part of their natural life-cycle.

The ‘hormone-free’ movement is a marketing scheme that attempts to create a differentiation that doesn’t exist. It seems to me that we’re taking a step backwards to promote this as something special, because there are no food safety benefits, and they’re suggesting that a less sustainable production method is somehow superior.

You can learn more about beef hormones, and read about food safety research on Alberta Beef’s Worried about Hormones? web page.

Check out the other myths we addressed in ‘Busted! 5 beef myths that don’t stand up to the facts’.