Earls says it learned lesson from beef controversy

Phil Gallagher got right to the point at the Manitoba Beef Producers meeting in Brandon.

Less than 30 seconds into his speech, the executive chef for Earls apologized for the restaurant’s decision last year to buy its beef from an American supplier and sell steaks as “certified humane.”

“We hurt a lot of people. We hurt a lot of people’s feelings, and we hurt a lot of people who work hard every day to produce the food that we consume in Canada,” Gallagher said Feb. 3 at the MBP meeting.

“I learned a really hard lesson this year. Not only do I have to listen to my guests, I have to work harder with industry … when we decide to make a change of this magnitude that we’re in conversation and we’re doing the best thing for our partners (beef suppliers).”

Many of the ranchers in the room applauded Gallagher’s mea culpa, including Betty Green, who farms near Fisher Branch, Man.

She said his words, plus the commitment to work with cattle producers, was meaningful.

“We’ve had these other retailers put out these claim s… and never an apology,” she said.

“Never a full discussion to understand what they’re saying is problematic.”

Following his apology, Gallagher spent 15 minutes talking about the company’s decision in April to switch to an American supplier and how the company backed away from “certified humane” beef following a ferocious public backlash.

Steak sales at Earls’ 67 restaurants had been falling, and company leaders were seeking a solution. They decided to try beef raised without antibiotics or added hormones to measure customer response.

After some experimentation with price and serving size, they learned that many Earls customers preferred beef raised without antibiotics to Certified Angus when both were on the menu.

They couldn’t find a single company to supply all of the Earls restaurants with beef raised without antibiotics or growth promotants, so they went with a U.S. supplier.

That company, Creekstone Farms in Kansas, had become a Certified Humane ranch, which means a third party had certified its operations as humane.

The combination of buying beef from the U.S. and promoting its beef as “certified humane” was too much for cattle producers and many Canadians.

The backlash was immediate and fierce as Canadian producers lashed out at the idea of “certified humane” beef.

“We insulted them,” Gallagher said.

“We insulted them with the Certified Humane moniker of the third party (auditor). (It) implied they weren’t humane.”

The response was most intense in Alberta and Saskatchewan. Earls noticed the impact as the number of customers and sales dropped on the Prairies.

Of note, the response was different in other parts of Canada.

“In B.C. and Toronto, it registered in a far more positive way,” Gallagher said.

Earls’ other mistake was going with a U.S. buyer.

Gallagher said the company should have spoken to more Canadian ranchers before making such a decision.

“I think if we entered into conversations earlier we would have realized there could have been a different solution,” he said.

“We could have made contact with (Canadian) ranchers who were already doing that (no antibiotics or growth hormones).”

Earls is now working toward sourcing all of its beef from a Canadian supplier.

It is buying beef from Beretta Ranch in Ontario, which produces beef without antibiotics or added hormones. It has partner ranches across Canada, mostly on the Prairies.

On its website, Beretta Farms says its cattle are:

•    prohibited from receiving antibiotics of any kind

•    receive no added hormones or steroids

•    sustainable

•    humanely raised

Beretta is supplying Earls with enough beef for its restaurants in Manitoba, Saskatchewan and Alberta.

“We’re working hard with Beretta and (others) to get Canadian beef back into British Columbia and Ontario,” he said.

“Our prediction is between July or August all of our Canadian stores will have Canadian beef back on the menu.”

Earls has moved forward since last April, and in-store sales on the Prairies have rebounded. However, its decision may become a case study in the food and restaurant trade.

In December, CBC business reporter Diane Buckner called Earls’ “beefgate” one of the worst business blunders of 2016.

Gallagher learned from the mistake, but he reminded cattle producers that expectations around beef and food are quickly evolving.

“The thing about the restaurant business is it moves fast,” he said.

“If you don’t react fast enough to things happening in the business, then somebody else will.”

Contact robert.arnason@producer.com

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Comments

  • richard

    Gallagher is dead right….”expectations around food and beef are quickly evolving”…. And grain and pulse growers will experience the same bewilderment of market forces if they dont respond to consumer shifts to “less is more” (chemical free, environmentally friendly, nutrient dense)….. the logical counterpoint to fifty years of excess and blind ambition in food production……

  • Kissing optional

    With the province establishing livestock tracking regulations
    http://panow.com/article/643945/cattleman-association-welcomes-new-livestock-regulations
    There should be an application in this database to track animals’ feed and supplements too.
    That way producers can supply consumers that don’t want beef that was fed antibiotics as growth stimulant, or other animal species by-product as protein, or skittles fed.
    http://panow.com/article/641911/skittles-source-energy-saskatchewan-cattle

    Then Earls and A&W can easily source local beef and keep their customers happy, and the producers that feed their stock any and everything to make a buck can feel the ethics pressure for their own business decision

    • Stephen Daniels

      Sourcing was never the problem,problem was paying a producer enough of a premium to supply them was ,they want specialized product for a commodity price.

      • Kissing optional

        When producers can enter meat into the distribution system that can’t be verified as to what or how much antibiotic or skittles it has been fed, there is a problem.

        • Harold

          Many ranchers meet Earl’s requirements amongst ranchers who do not, but they all loose control of their animal once it enters the commercial feed lot.(no say) In the feed lots the animals are injected as well as sickened and stressed making the meat undesirable to the consumer. This is the wall. Today, the consumer is not only concerned with the humane treatment of animals; they are also concerned about their own personal health as well. By the very nature of high volume production, feedlots cannot reasonably operate differently, as when compared to low volume production.
          Moreover, the high volume multi-nationalists and globalist have striped the provinces of their lower production local business and local jobs, and this unemployment suits their globalist agenda. In Canada, we now work for the gain of the multi-nationalists, and not for the gain of Canada or our fellow Canadians. This is another wall supported by our own government, and further by indoctrination produced by corporate, to a censored and publication banned, suffering media. There is a reason as to why media does not “pick-up” on your verifiable leads. Has anyone noticed?

          • Kissing optional

            I have noticed that while in Sk, the provincial govt is saying ‘belt tightening time’, the corporate welfare amount to the agri biz industry increased again this year.
            Of The two stories, only the ‘need’ to cut workers, education and health has gotten any media attention

          • Harold

            Job loss and cuts to education and Health care are the symptoms of the erosion of money circulation brought upon Saskatchewan by the Globalists and Multi-national mass production agendas. I sound like a broken record. Saskatchewan has become a resource exporting province, and has in turn neglected Industry to refine and create product associated with those resources for needed job creation. High taxes and two fold pricing brought on by Government controls in business and multi-nationals have eroded the buying power.
            So, government health care/education and job loss. Simply, What happens to Saskatchewan if all cattle (resource) unprocessed (export) is moved directly to BC. Where are the jobs created? BC. What happens if the same resource is sent directly to the USA instead. Same? What happens if the USA open up a massive foreign US owned depot with all rights in Manitoba as a favor? Same? What if Canadians owned every company in Canada and produced a multitude of product from our resources? Where would the money circulation lay?
            The Media was reporting; just not the full story. Ever notice how much meaningful sports are broadcast and reality TV equivalence? All meaningful compared to the topic at hand? Are the top stories meaningful?.
            You have 1.12 million people and resources so why is everyone employed like there are none? Did they sell your phone company profit yet? There is a virus somewhere, but very few know where to look, and it’s obvious it is not the Main stream. The punishment that a reporter of today will receive is a death whereby they broke nothing for the cause of Humanity.
            The tread mill is theirs.

        • Stephen Daniels

          No problem what cattle ingest or medicated with is regulated by government ,You know what your celery was sprayed with?

          • Harold

            No problem? It is the problem. Food is not being heavily regulated by what the consumer is willing to eat. It is the dictates of a government and corporate marriage which are written, and the public and their desires overlooked. Perhaps “second fiddle” suit’s your needs, but many Canadians are tiring of the concept.

  • Harold

    “In December, CBC business reporter Diane Buckner called Earls’ “beefeaters one of the worst business blunders of 2016”.
    This is exactly the trash that i would expect to come from CBC reporting. Earls in fact opened up the failures of the organizations that the Canadian rancher’s depend upon, and made it public. It was the agencies responsibility to keep on top of the food trends and to communicate these trends to the rancher, and it’s resolve, so that Canadian corporations need not look elsewhere to meet consumer demand. What is the purpose of the Manitoba Beef Producers if Earl’s has to do the dirty work for them. How helpful.
    Personally, when someone (agency) takes money and does not perform, I do not let the “off the hook” so easily, and I do not misplace Earl’s bravery as blunder.
    Secondly, Earl’s has reminded the public of their own power to influence industry,(capitalism) and even government,(corporate multi-nationalism) when the public come together and their thought’s are as one. CBC among other mainstream, is to scatter thought and to make the accountable – un-accountable.
    Being a businessman myself, I do not accept Gallagher’s needless apology.
    If there is a blunder, it is having a shopping list that a provider cannot readily fill. Earl’s has to wait for a “back-order” to move forward, or in this case, run around Canada and fill a box and then mail it to himself, while the agency applauds. Blunder indeed.

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