Sustainability Question, Beef industry finds ways to tackle challenges ahead
By 2050, economic projections indicate farmers and ranchers will need to produce 70 percent more food to feed the growing population of the world.
“For the meat industry, it is good news because estimations for how much protein will be needed is astounding,” says Kim Stackhouse of JBS USA.
The projections are 40 million metric tons of beef and 100 million metric tons of chicken.
“From a sustainability standpoint, how do we meet those kind of expectations for protein? How do we meet all these demands with the resources we have? This has been said to be the greatest challenge of every generation’s time,” Stackhouse says.
Keys to efficiency
Efficiency and technology will be key to making the use of resources even more efficient in Stackhouse’s opinion.
“We will continue to innovate so we can feed the world, and the U.S. will be a powerhouse when it comes to animal proteins. We have an impressive history of meeting demand,” she states.
Stackhouse believes an increased percentage in dressed weight of cattle could lead the way.
“We have continued to produce more pounds per carcass. Less than 10 years ago, we started to see average dressed weights for U.S. slaughter cattle explode. At JBS USA, we average 63.5 percent yield. Even a percentage jump is a lot more beef. We will continue to get more efficient to meet this protein demand,” she explains.
Changes in consumer demand
The meat case has evolved since the 1960s, allowing consumers more choices. It is not uncommon to find grassfed, conventional, natural and antibiotic-free beef side by side in the meat department.
“As an industry, we have adapted to consumer change and response. Everyone in the beef industry should be proud of the choices we can now offer consumers,” Stackhouse explains. “What is more impressive is the developments we have made in animal health.”
“When research came out years ago saying meat was bad for us, we stepped up and changed our genetics to produce meat with less fat and more lean muscle cuts,” she continues.
“Everyone lumps everything under sustainability,” Stackhouse says.
When a United Nations report came out years ago accusing livestock of being responsible for 18 percent of man-made greenhouse gases, it started activist movements that still exist today, like meatless Mondays.
Consumer Reports jumped on the bandwagon to attack beef by publishing information about how bad beef was for consumers.
“It is a big ask for American consumers, who don’t have time to do the research, are not close to food production and antibiotics or realize how hard we work every day to produce safe food, that Consumer Reports may be good at picking out a safe car seat but not our food,” she says. “This kind of stuff really matters, and I stay awake at nights worrying about this fear of food movement.”
Consumer expectations are changing and with it is a growing expectation about transparency.
“I even found this on a box of baby wipes the other day,” she jokes. “Millennials will pay more, even if they don’t have the money, if they think it will change the world.”
Stackhouse continues, “They are twice as likely to care if food is organic. They are more concerned with political and ethical issues, and they care about what’s genuine and authentic.”
“That same generation grew up with the internet, but their parents told them not to trust Wikipedia. They trust their friends more than facts, which has completely shifted the paradigm of retailers. Now, retailers have a group of consumers who don’t trust facts but trust relationships,” she says.
In response, Costco developed a strong brand recognition with moms, Stackhouse states.
“Costco developed an authentic relationship with consumers through their business plan. They only make money off the membership we pay for,” she describes. “Everything else they sell in their store for what they pay for it. Members believe they get this incredible value, and through their membership they say, ‘Make sure the things you buy fit my values.’”
With 750,000 cow/calf producers in the U.S. and the average herd size of 40 head, the beef industry is complicated.
“Moms expect Costco to have their backs, and that is a big job for Costco,” she explains. “It has forced companies like JBS USA to become more transparent. We have to demonstrate to these retail partners that we have alleviated risk from our system, and that we share the same values of our retail partners.”
“We now have a more public facing approach to how we do business,” she says.
Competing with other
“From a beef perspective, our other proteins are meeting customers and consumers where they are at because they are able to. They are more integrated supply chains that are not as complex or as expensive as producing beef,” Stackhouse explains. “Consumers define sustainability as organic, natural and cage-free. These proteins have been able to develop the trust with moms who read Consumer Reports and go to Costco.”
“Costco wants to transition everything to organic, because that’s what their customers believe in,” she notes. “Beef is missing from connecting with customers on a value level. It is a challenge for us because of the increased costs, which may make it prohibitive.”
Blockbuster once had a chance to purchase Netflix for $50 million, Stackhouse shares. Blockbuster declined saying the company didn’t fit their business model.
“Last I read, Netflix was worth more than $190 billion, and what happened to Blockbuster? So my question is, do we innovate?” she asks.
“We may not agree with where our customers are, but we have to meet them where their values are at and develop a trusting relationship with them,” she states. “It is critical for our success as a beef industry, moving forward.”
“I realize we don’t have the flexibility or ability from a cost-perspective to change like chicken does. But, our challenge is to develop relationships and trust where their values are, in a different way,” she explains.
Stackhouse talked to producers, nutritionists and students about sustainability and how the beef industry can meet consumer expectations during a recent High Plains Nutrition Roundtable in Laramie.
Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to email@example.com.