Major Events Sure To Alter Landscape of Grass Fed Beef

Allen R. Williams, Ph.D.

Recent developments in the grass fed beef sector in the U.S. will have a major and lasting impact on the industry and will alter the way business is conducted. Over the last few days two of the “Big 4” packers in the U.S. have launched efforts to initiate active grass fed/finished beef sourcing. National Beef is actively seeking a minimum of 150 head a week to start their program, while JBS is looking to establish sources for finishing and procurement.

This is sure to cause gnashing of the teeth for some in the grass fed beef business while others will see potential opportunity. As news of these developments spreads further among the grass fed community it will be interesting to see and read the many varied reactions. They will range from “the sky is falling” to “this will grow the entire grass fed beef sector”. While it should not be the case, some will be completely surprised by the Big 4 entering into the grass fed beef market. For those who have observing the market growth over the past 15 years, where we have experienced annual growth rates between 25-30% and grass fed beef now comprises between 3% and 6% of all beef market share in major metro markets, entry by bigger players was inevitable. We have already seen long established branded meat programs enter into the grass fed beef market (Strauss Brands, Meyer Natural, Maverick Ranch, Nolan Ryan All Natural, and Allen Brothers), so the Segway into the Big 4 was certainly coming. What may surprise many is that it happened so quickly.
Let’s not forget that Cargill has been a participant in grass fed beef production and marketing for several years now. They own the largest packer in Australia and have been marketing grass fed beef to export markets for some time. Actually, National and JBS are playing “catch up” of sorts. The fact is, the market has grown so rapidly that they could no longer ignore the potential.

In tracking the development of the grass fed beef sector over the past 15+ years, what has been quite evident is that it has closely mirrored the development of the All Natural Grain Fed Beef sector. In the early days of the All Natural Grain Fed Beef movement, we saw pioneers and entrepreneurs take the initial risk, challenges, and slings and arrows. They were derided and accused of being enemies of the beef industry. They were told that what they were doing was simply a fad that would quickly die. However, what happened? They slowly but surely built a strong and loyal customer base and gradually altered the landscape of the industry and of consumer choice. As they gained market share, larger programs began to buy and consolidate the early programs. Then the big packers joined the fray and started their own All Natural program. Today, almost every major beef program has their own All Natural beef label. However, several of the original programs have found ways to survive and thrive through all the challenges presented over the past three decades. The early pioneers in the grass fed beef sector have to do the same.

So, sit back, relax, and don’t get overly excited one way or the other. As a smart business person pay close attention to what your competitors are doing and learn from them. Determine how you can best differentiate your program to the consumer and/or how you can work with other programs to grow the market share as a whole. Always remember, where there are challenges there are also opportunities.