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How a verified quality assurance initiative that boosted Canada’s wine industry could have lessons for beef producers

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

This week we spoke with Mark Sheridan, president of Hester Creek Estate Winery in B.C., to learn more about the Vintners’ Quality Alliance (VQA).

The wine industry’s VQA program was instigated in the late 1980s when NAFTA eliminated the differential tax structure. At the time, Canadian wine producers lost their preferential tax rates, and realized they needed a recognizable quality standard to give their industry an edge with consumers.

“It gave us instant credibility on the worldwide market because it’s a verified quality standard that is in line with other standards from around the world,” said Mark.

How a similar program could work for beef producers

The wine industry’s quality assurance program assures consumers that they are buying a product that will meet their expectations.

“Consumers are increasingly wanting to know the story behind the wine – Where is this wine from? Where were the grapes grown? What makes that area unique and important?” said Mark.

VQA

Consumers also want to know where their beef comes from, how it was raised, and how it was cared for. The beef industry’s Verified Beef Production Plus (VBP+) program has the potential to provide consumer assurances in a similar way to VQA, but is currently evolving and has not yet attained certification from a recognized certifying body.

Another program that provides the assurances demanded by today’s consumer about animal health and welfare is the National Cattle Feeders’ Association’s Canadian Feedlot Animal Care Assessment Program, which is certified by the Professional Animal Auditor Certification Organization (PAACO) and recognized by both the Canadian Roundtable for Sustainable Beef and the National Farm Animal Care Council.

How would a quality assurance program differ from beef grading?

In an earlier post we explained how beef grading provides a quality rating for individual cuts of beef. A quality assurance program could provide the deeper level of information increasingly demanded by consumers – for instance, where the beef comes from and whether it was raised humanely.

In a highly competitive global marketplace it would give a further edge to Canada’s beef producers. “We have the best beef in the world so let’s take advantage of all the good things we do and position our product to get the best return we can”, says Bryan Walton, president and CEO of the Alberta Cattle Feeders’ Association.

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.