Winnipeg Free Press - PRINT EDITION

A&W's 'better beef' boast challenged by producers

Chain switches to meat without hormones, steroids

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Anyone who frequents the cereal aisle or yogurt department in a major grocery store learns pretty quickly success or failure in the food business comes down to the ability to differentiate.

Through varying recipes, packaging and marketing, the name of the game is to give customers the perception -- if not the reality -- that your product is the best.

Product differentiation can be emotional as well as tangible. For example, free-range eggs don't look or taste any different than conventional ones. The price may be higher, but there's a market for them among customers who like the idea of the animals that produce their food having a life too. Different cereals have varying quantities of sugar and fibre, relative to whether the target is children or seniors.

So it goes in the burger business, where the battle for customers has moved beyond offering the most food for the lowest price to extracting value from differentiating products based on consumer preference.

In this vein, fast-food giant A&W announced recently from here on in it would only buy beef raised without hormones and steroids. What's more, it's buying from producers willing to operate that way, whether or not they are Canadian.

As marketing ploys go, it's a gamble for Canada's second-biggest hamburger chain. Beef purchased from sources not using these production aids will likely cost the chain more without providing any noticeable differences in the product consumers eat. Its value is purely based on whether consumers believe it's better. Hence the slogan "Better beef."

A&W doesn't say its beef is safer or more nutritious; it simply says it's better, based on what it is hearing from its customers.

"What we've observed from our customers is there is a lot more interest in the food they're eating, where it comes from," A&W's chief marketing officer Susan Senecal said in a Reuters report. "We've discovered that things like no hormones, no steroids are very, very important to our customers, remarkably so."

Growth promoters are widely used in the North American beef business because they create more beef more quickly with less feed. That means fewer animals, lower costs and a smaller environmental footprint.

Europe and several other major importers don't accept them. Just last summer, processors in North America stopped accepting cattle treated with a growth promoter called Zilmax when meat-plant auditors noticed cattle treated with it had difficulty walking. A&W is among several major food retailers in North America moving to offer customers the hormone-free option.

Meanwhile, organizations representing cattle producers across the country are pulling out all the stops to defend current production practices. They point out these promoters have been used for nearly four decades with no known detrimental human health effects. Without naming A&W directly, the Canadian Cattlemen's Association issued a terse statement assuring Canadians all beef is perfectly safe.

A recent Manitoba Beef Producers opinion piece worried about "foodie trends" and strategic marketing efforts that mistakenly romanticize past production methods as healthier, and which "want to push producers and farmers back to the rural lifestyle and production practices of the 1940s and 1950s. In other words, houses with no running water, wood heat, a standard of living below poverty, one-room school education, even longer work hours, etc."

Alberta Beef Producers (ABP) also chimed in, saying hormone-free beef "is different from the vast majority of beef that is produced in Canada, but in our view, it is certainly not better beef." It goes on to criticize these companies for seeking supplies from off-shore if local sources can't be found.

"We are disappointed these companies are effectively turning their backs on over 68,000 Canadian cattle producers and more than two billion pounds of safe, nutritious, high-quality Canadian beef that is produced annually from cattle raised using highly ethical and sustainable methods."

There are two ways of looking at this. Are customers abandoning beef producers or are beef producers so stuck in a commodity mentality that they are willing to pass on a growing market segment?

 

Laura Rance is editor of the Manitoba Co-operator. She can be reached at 204-792-4382 or by email: laura@fbcpublishing.com

Republished from the Winnipeg Free Press print edition October 12, 2013 B6

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