Six-month C.A.B. sales higher than expected
April 14, 2010
by Bryan Salvage
WOOSTER, OHIO – Over the past six months, sales volume was significantly higher than expected for the Certified Angus Beef (C.A.B.) brand due to a trend toward more Angus genetic influence in U.S. cattle plus higher quality grades.
Brent Eichar, senior vice president of C.A.B., a not-for-profit subsidiary of the American Angus Association, said the brand is “fortunate to have the supply to meet expanding demand, thanks first of all to our licensed packers.”
February began with a record 66% of the harvest mix being Angus-influenced cattle, he added, which helps to explain why three weeks in February each experienced more than 70,000 cattle qualifying for the brand – an increase of nearly 45,000 head over the same weeks in 2009. For the first six months of the C.A.B. fiscal year beginning Oct. 1, 2009, supplies for the brand are up sharply, met with record sales that average nearly 21% higher than the previous year. Four of those six months lead the list of historically high sales volume.
“The economy posed some problems, but presented just as many opportunities,” Mr. Eichar said. “As foodservice and international sales began to show modest signs of recovery from the economic recession, we saw retail sales explode. Our licensed retailers capitalized on the opportunity to offer consumers a high-quality steak at a very good value.
“Consumers place a great deal of importance not only on price but on quality when it comes to their beef selection,” he added. “If they’re not spending $100 to eat out, they may be willing to spend an extra $2 to upgrade their Choice steak to C.A.B.”
There are no worries about supply in the near term, assured Clint Walenciak C.A.B.’s packing director. “We will continue to have plenty of cattle qualifying for the brand, presenting a tremendous opportunity to bring on new sources of demand for the brand that once had supply concerns,” he added. “Even if the quality grades start to falter, the relatively greater share of Angus-influence cattle and total harvest level are favorable to our supply.”
C.A.B. is in a strong position for sales growth, Mr. Eichar agreed. “We have the supply to support aggressive marketing and featuring at the retail and foodservice levels,” he added. “This fiscal year alone, we’re seeing as much as a 30% increase in steak sales by our licensed foodservice distributors because they have the confidence to promote the business. This is also an opportunity to allow more customers and consumers to experience what the Certified Angus Beef brand is all about.”
Monthly numbers will be competing against last year’s records as summer approaches. However, sales volume could finish the year up 12% to 15%. At the upper range, that’s a 100-million-lb. increase over the 663 million lbs. in 2009, both men said.