State of the Brand

Certified Angus Beef LLC President John Stika gives Convention attendees an update on the state of the CAB® brand.

KANSAS CITY, Mo. (Nov. 4, 2014) — It’s all about the price-value relationship these days. That’s what Certified Angus Beef LLC (CAB) President John Stika said in a “State of the Brand” session in Block 4: Cattleman to Consumer.

“That’s our drumbeat,” he said, noting the eighth straight record sales year at 882 million pounds (lb.), a 29% increase in Certified Angus Beef®(CAB®) brand Prime in the last year and a 65% increase over five years. Meanwhile, reduced supplies of Select beef narrowed the spread as the price of Select beef climbed faster.

John Stika
John Stika

Not a problem, but rather an advantage, Stika said.

“In perspective, CAB is a better value at higher prices, which is why we’ve seen breakaway demand growth for the brand,” he said. That same price-value advantage applies equally to registered Angus bulls and Angus feeder cattle.

When 92.5% of the 302 million lb. in the foodservice sector sell through licensed restaurants, and more than one-third of that branded on the menu, that’s a mark of strong demand, Stika said.

He noted competition from hundreds of other brands, and acknowledged a few of them have been good for the beef industry, but explained CAB will never lower its standards.

“I’d rather justify the price than apologize for the quality,” he said. “Worldwide, people see that logo and they rest assured it is the same standard of excellence. We still use 4% of our resources to protect that integrity, but taste is the high ground we’ve owned for 36 years.”

Supply is the biggest concern for the fast-growing, world’s largest brand. Harvest at 30 North American plants was down 3.8% last year. Identified black-hided cattle were down 2.1%, yet there were half of a percentage point more black-hided cattle in the mix, and the 25.6% CAB acceptance was 1.4 points above the previous year’s record.

Still, because of pull-through demand and improved Angus genetics, another year of growth is possible in 2015, Stika said.

International sales are one key. At 120 million lb. last year and 14% of business, he said that could reach 20% of the total. When Japan dropped out of the market in 2003, it represented more than half of the 90 million lb. that year. It was only 10 million lb. last year, but coming back strongly.

“We think there’s another 30 or 40 million pounds of business to get in Japan alone, and it’s our third-leading export market,” Stika noted.


 

Editor's Note: This article was written by staff or for the Angus Journal®. It is available for reprint upon request to editor Shauna Hermel. Author Steve Suther is director of industry information for Certified Angus Beef LLC. Photos are available upon request.

ABOUT CERTIFIED ANGUS BEEF LLC. Of the more than 106 "Angus" branded beef programs monitored by the USDA, CAB is the only one owned by the American Angus Association and its members. The Association formed the CAB brand in 1978 as a not-for-profit company that owns only the trademarks it uses. Our company functions independently from the Association through the guidance of nine directors, which include five members of the Association board. For more information, visit www.cabpartners.com and www.certifiedangusbeef.com.

ANGUS MEANS BUSINESS. The American Angus Association is the nation’s largest beef breed organization, serving nearly 25,000 members across the United States and Canada. It provides programs and services to farmers, ranchers and others who rely on the power of Angus to produce quality genetics for the beef industry and quality beef for consumers. For more information about Angus cattle and the American Angus Association’s programs and services, visit www.angus.org.