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Brand Update 2018: Year in Review

The Certified Angus Beef ® brand unites a community from gate to plate focused on quality, and is known worldwide as the best Angus beef available. View our 2018 Brand Update for an overview of the people, initiatives and relationships that fueled a 14th consecutive year of growth and the fulfillment of our mission since 1978: to create demand and add value for Angus cattle, and support the family farmers and ranchers who raise it.

The Certified Angus Beef ® brand unites a community from gate to plate focused on quality, and is known worldwide as the best Angus beef available. View our 2018 Brand Update for an overview of the people, initiatives and relationships that fueled a 14th consecutive year of growth and the fulfillment of our mission since 1978: to create demand and add value for Angus cattle, and support the family farmers and ranchers who raise it.

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BRAND UPDATE<br />

6<br />

PARTNERS PROPEL SALES TO NEW HEIGHTS<br />

A worldwide beacon of quality, Certified Angus<br />

Beef ® brand sales of 1.21 billion pounds<br />

were recorded <strong>in</strong> Fiscal <strong>2018</strong>. That’s the 12th<br />

consecutive annual sales record, extend<strong>in</strong>g a<br />

14-year streak of year-over-year growth and<br />

the third year for sales above 1 billion pounds.<br />

The 8.1% <strong>in</strong>crease represents an additional 91<br />

million pounds of high-quality beef raised by<br />

quality-m<strong>in</strong>ded farmers and ranchers to meet<br />

steadily grow<strong>in</strong>g consumer demand.<br />

“For the past 40 years, a community of people<br />

from farm to plate – each necessary to deliver<br />

the Certified Angus Beef ® brand to d<strong>in</strong>ner tables<br />

around the world – have shared much: a<br />

passion for excellence, a dedication to quality,<br />

and ideas and <strong>in</strong>spirations to achieve our<br />

goals,” said John Stika, the brand’s president.<br />

“Along the way, we’ve built relationships on<br />

trust and a shared vision. By do<strong>in</strong>g so, what<br />

started out as a simple idea among a small<br />

group of cattlemen has become the world’s<br />

lead<strong>in</strong>g brand of beef.”<br />

The brand set sales records <strong>in</strong> all 12 months<br />

of its 40th anniversary year, and seven of the<br />

brand’s 10 highest sales months <strong>in</strong> history were<br />

<strong>in</strong> <strong>2018</strong>. More than 100 million pounds were<br />

sold <strong>in</strong> the months of March, May, June, July,<br />

August and September, with August be<strong>in</strong>g the<br />

most successful month ever recorded.<br />

True to its <strong>in</strong>ception <strong>in</strong> 1978, a community<br />

of farmers and ranchers rema<strong>in</strong> the backbone<br />

of the brand, committed to supply<strong>in</strong>g<br />

consumers with consistent and pleasurable<br />

eat<strong>in</strong>g experiences. Their efforts to raise<br />

quality cattle enabled licensed processors,<br />

distributors, restaurateurs and retailers to<br />

meet this grow<strong>in</strong>g demand for premium beef.<br />

Respond<strong>in</strong>g to economic signals from the<br />

consumer marketplace, cattlemen raised a<br />

record 5.18 million cattle that met all of the<br />

brand’s requirements last year – an <strong>in</strong>crease<br />

of 14.3% over 2017. Further, the rate of cattle<br />

eligible to earn the brand name rose to a record<br />

32.5%, up from just 17.8% a decade ago.<br />

EVERY DIVISION SETS RECORDS<br />

A global network of nearly 20,000 licensed<br />

partners found <strong>in</strong>dividual bus<strong>in</strong>ess success<br />

through brand recognition <strong>in</strong> retail meat cases<br />

and on restaurant menus. Manageable prices<br />

<strong>in</strong> concert with strong demand led to sales<br />

records <strong>in</strong> every division of the Certified Angus<br />

Beef ® brand.<br />

The most robust growth took place <strong>in</strong> the<br />

International Division, with 207 million<br />

pounds exported to 50 countries outside the<br />

United States – an 18.6% <strong>in</strong>crease over last<br />

year and the best <strong>in</strong> the brand’s history. What<br />

comprised more than one-third of total brand<br />

growth was due to the strong market <strong>in</strong> South<br />

Korea, followed by Canada, Japan, Hong<br />

Kong and Mexico.<br />

Quality-focused retailers rema<strong>in</strong>ed the<br />

largest contributor to total brand sales, at<br />

approximately 41%. A more favorable price<br />

spread relative to commodity beef options<br />

led to more Certified Angus Beef ® brand items<br />

featured <strong>in</strong> circulars, thus grow<strong>in</strong>g retail sales<br />

by 8.3% to a new high of 494 million pounds.<br />

Nearly 11,000 licensed restaurants are<br />

<strong>in</strong>cluded <strong>in</strong> the Foodservice Division, which<br />

netted sales of 405.5 million pounds, a<br />

5.3% <strong>in</strong>crease. The division boasted a n<strong>in</strong>th<br />

consecutive year of record sales, further proof<br />

of the brand’s value to chefs and restaurateurs<br />

who prize its consistent quality, and patrons<br />

who crave its flavor.<br />

Processors responded to grow<strong>in</strong>g consumer<br />

demand for high-quality convenience meals<br />

<strong>in</strong> both retail and foodservice with branded<br />

value-added products. Sales rose by 8.1% to<br />

29.2 million pounds, driven most by smoked<br />

brisket, mar<strong>in</strong>ated fajita meat and burgers <strong>in</strong><br />

the frozen case.<br />

BALANCED CATEGORY GROWTH<br />

Illustrat<strong>in</strong>g a steady desire from the <strong>in</strong>dustry’s<br />

most discern<strong>in</strong>g customers, and the ris<strong>in</strong>g tide<br />

of quality at the ranch, sales of the brand’s<br />

exclusive Prime product extension achieved its<br />

highest growth ever at 31.2%.<br />

Cont<strong>in</strong>u<strong>in</strong>g a trend from last year, the brand<br />

experienced a balanced rate of growth across<br />

product categories. Backed by traditionally<br />

strong demand, particularly for celebrations<br />

and special occasions, sales of middle meats<br />

(premium steaks) grew by 6.5% over last<br />

year. Reflect<strong>in</strong>g cont<strong>in</strong>ued consumer appeal<br />

for a better burger, ground beef <strong>in</strong>creased<br />

10.3% over 2017. Sales of roasts and other<br />

end meats, which are often the centerpiece of<br />

family meals, rose by 8.2%.<br />

Total sales: 1.12 billion lbs. (up 8.1%)<br />

12th consecutive record year<br />

<strong>Year</strong>-over-year growth s<strong>in</strong>ce 2004<br />

8.3 %<br />

494 MILLION LBS. 5.3 %<br />

405.5 MILLION LBS. 18.6 %<br />

207 MILLION LBS. SAME<br />

RETAIL<br />

FOODSERVICE<br />

INTERNATIONAL<br />

105.5 MILLION LBS.<br />

MISC.<br />

8.2 %<br />

772 MILLION LBS. 6.5 %<br />

265 MILLION LBS. 10.3 %<br />

175 MILLION LBS. 8.1 %<br />

END MEATS<br />

ANGUS-INFLUENCED CATTLE ID<br />

CARCASS CERTIFIED<br />

®<br />

CAB ACCEPTANCE RATE<br />

2014<br />

2015<br />

2016<br />

2017<br />

<strong>2018</strong><br />

2014<br />

2015<br />

2016<br />

2017<br />

<strong>2018</strong><br />

2014<br />

2015<br />

2016<br />

2017<br />

<strong>2018</strong><br />

MIDDLE MEATS<br />

GROUND BEEF<br />

VALUE-ADDED<br />

13.8 M<br />

12.7 M<br />

29.2 MILLION LBS.<br />

13.6 M<br />

15.2 M<br />

15.9 M<br />

3.5 M<br />

3.5 M<br />

3.9 M<br />

4.5 M<br />

5.2 M<br />

25.6 %<br />

27.5 %<br />

28.9 %<br />

29.7 %<br />

32.5 %

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