Availability, and sales, of the brand’s Prime product reached historic heights <strong>in</strong> <strong>2019</strong>, thanks to the efforts of qualitym<strong>in</strong>ded ranchers rais<strong>in</strong>g cattle that meet the target. Dry-ag<strong>in</strong>g is another artisanal technique brand partners employ to further elevate the highest quality product and dist<strong>in</strong>guish their offer<strong>in</strong>gs. Most of the growth <strong>in</strong> Certified Angus Beef ® brand Prime sales came from retail partners, though the exclusive product rema<strong>in</strong>ed a ma<strong>in</strong>stay <strong>in</strong> steakhouses and white tablecloth restaurants.
TRADING UP Increas<strong>in</strong>g beef quality and historic availability of Prime propel partners’ success ShopRite, the large Northeastern grocery co-op, has “always been a Choice house,” accord<strong>in</strong>g to Roger Savoia, vice president of meat for its parent company, Wakefern. For many years, stores also offered the Certified Angus Beef ® brand as their top-tier beef option. “Our philosophy here is when we put a Choice item on sale, we always put the Certified Angus Beef ® brand on sale, too,” Savoia expla<strong>in</strong>s. This “shadow market<strong>in</strong>g” has served the retailer well, even through the 2008 Recession and recovery. “We thought then that sales of the brand might dw<strong>in</strong>dle, or go away; however, it became stronger. The folks who bought it cont<strong>in</strong>ued to buy it,” he says. Through the decade to follow, the beef marketplace kept evolv<strong>in</strong>g. More familiar with the better eat<strong>in</strong>g experience premium beef delivered, consumers cont<strong>in</strong>ued to demand it, send<strong>in</strong>g clear economic signals back to the ranch. Farmers were <strong>in</strong>centivized to choose the best genetics and commit to the best management practices that result <strong>in</strong> better beef. It was a movement that not only ensured a grow<strong>in</strong>g supply of highly marbled product for the Certified Angus Beef ® brand’s traditional l<strong>in</strong>e, but—like the ris<strong>in</strong>g tide that lifts all boats—elevated the quality of beef across the <strong>in</strong>dustry. The supply of Select beef dropped 40% from 2010 also to 2018; <strong>in</strong> 2018, sales of Certified Angus Beef ® brand product eclipsed the supply of Select beef. Meanwhile, the amount of Prime grew significantly from 2010-18. Indeed, the supply of Prime product, both commodity and Certified Angus Beef ® brand Prime, has never been higher than it was <strong>in</strong> the past year. Yet before 2015, it seemed most <strong>in</strong> the beef bus<strong>in</strong>ess assumed Prime beef was largely the provenance of steakhouses and other high-end restaurants. A little Prime product trickled <strong>in</strong>to retail channels—one example is Oklahoma-based Reasor’s, which started offer<strong>in</strong>g it years ago—but not much. That was expected, even appropriate, perhaps, when Prime hovered at around 2 to 3% of the market, as it had for years. But as the rate of cattle grad<strong>in</strong>g Prime drew higher than 8%, brand partners, particularly retailers like ShopRite, started tak<strong>in</strong>g note. “We said, ‘let’s give our customers an even better eat<strong>in</strong>g experience. Let’s take them up a step to Certified Angus Beef ® brand Prime,’” recalls John Balog, ShopRite’s beef category manager. “They’ve seen it <strong>in</strong> restaurants; they know what it is. Now it’s their chance to buy it at a supermarket.” But the question rema<strong>in</strong>ed: if you build it, will they come? ShopRite started with a test <strong>in</strong> a few stores to see if they could get consumers to upgrade. It was soon apparent that high-end shoppers and younger generations like the Millennials appreciated be<strong>in</strong>g able to f<strong>in</strong>d a steakhouse-quality steak <strong>in</strong> the meat department. “What we’re track<strong>in</strong>g is that customers are buy<strong>in</strong>g Certified Angus Beef ® Prime, and those customers are the shoppers of the future,” says Savoia. Better yet, Prime didn’t cut <strong>in</strong>to sales of ShopRite’s other beef options, <strong>in</strong>clud<strong>in</strong>g traditional Certified Angus Beef ® brand product, as some had feared it might. In fact, the cha<strong>in</strong> grew category sales by a few percentage po<strong>in</strong>ts, accord<strong>in</strong>g to Mark Salerno, the stores’ meat merchandis<strong>in</strong>g and operations supervisor. “It exceeded my expectations,” he says, not<strong>in</strong>g a lot of excitement both at store level and among the retailer’s leadership. They’ve supported promotions, contests and advertis<strong>in</strong>g. “We want to show that we sell the best beef, not just any beef, and we’re really proud of that,” he says. <strong>2019</strong> <strong>Brand</strong> <strong>Update</strong> 27
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