Price conscious | Canada Beef wants to keep buyers from switching to cheaper meat
RED DEER — Canadians may think they have the best beef in the world, but few others even know it exists.
After travelling to key markets in Asia and Russia late last year, representatives of Canada Beef Inc. found no loyalty to Canadian beef, much less recognition that it is a high quality, grain fed product.
“We are classified today in the ‘other’ category,” said chief executive officer Rob Meijer at the Alberta Beef Industry conference in Red Deer Feb. 16-17.
“They haven’t been educated thus far on the Canadian beef advantage,” he said.
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The newly formed Canada Beef launched a three-year corporate strategy in January that is intended to drive business around the world.
They have learned many potential buyers are price conscious, and if a competitor offers product for less, the loyalty is gone.
“They would probably be willing to switch us out in a heartbeat,” he said.
Canada Beef is the result of a merger between the Canada Beef Export Federation and Beef Information Centre paid for with public funds and check-off dollars.
The new organization plans its first annual forum in mid-September to report on its progress.
Past organizations built trust and confidence in Canadian beef but did not achieve customer loyalty. Canadian beef should be preferred over Australian or American beef but there have been past complaints about consistency or quality issues, said Meijer.
Canada exports about 40 percent of its production, of which most goes to the United States. Doors have opened to other countries but Meijer said promotion dollars might be better spent on specific segments or a few key customers to get the best return on investment for every kilogram of beef placed in that market.
“We don’t just put beef in a boat or on a plane to someplace if you are not going to make more money or go where the money is greatest,” he said.
More partnerships have been formed with companies that sell Canadian beef exclusively, like Costco, Sobeys, High River Angus, McDonalds, Wal-Mart and Montana’s Restaurants.
However, retailers like Costco says it cannot get enough AAA Canadian beef.
“Let’s make sure we don’t short Costco to go somewhere else,” Meijer said.
Canada just returned to the South Korean market after a lapse of nearly nine years due to BSE. Rebuilding customer confidence will take time, but a consistent supply is required and it must meet customer specifications to continue the business relationship.
“Whatever you promise to your customer, you have to make good on that,” he said.
At the same time, work is ongoing with China. It recently agreed to accept beef tallow for industrial purposes. Boneless beef should be next.
Seven processing plants are on the waiting list for approval. As soon as the Chinese certify them, a marketing program will be launched.
Agriculture minister Gerry Ritz said individual plant inspections were part of an earlier memo of understanding with China.
“They reserve the right to come over and inspect each one individually. We acknowledge that, but anybody who has the capacity to find a market in China we will make sure they get on the list,” he said.
Customers like the Chinese and other Asian nations need to be educated about what Canada is offering. Future VIP missions bringing in delegations to Canada will be smaller and will focus on business only, said Meijer.
“I am not bringing these folks to go to Banff. I am not spending a dime on a bus for them to have a day of skiing, and that is all they are thinking about when we are taking them to a feedlot or to see our packing industry,” he said. “They are here to learn and get educated about the product and the value and respect what we are trying to do.”
Canada is missing the opportunity of branding itself as a clean, open space with clean air and water.
“It leaves an impression with these folks in Asia that food produced in an environment like that is clean, it’s wholesome, it’s safe.”
