Sysco Goes Grass Fed With Irish Supplier

Sysco Corporation, one of the largest food distributors in the U.S., recently signed a deal with ABP Food Group of Ireland to bring Irish grass fed beef to the U.S. consumer. The deal is worth a reported $17 million annually and is the first European beef to be exported to the U.S. in 16 years.

Paul Finnerty, CEO of ABP Food Group, touts the deal with Sysco as a driver in improving cattle prices in Ireland by up to 40%. Finnerty’s intention is for Irish beef to penetrate the best markets in the world and to sell what he terms, “a premium product at a premium price”. ABP Food Group is the largest beef exporting company in Europe.

Finnerty goes on to state that the U.S. is the biggest beef market in the world and that there are consumers in the U.S. who crave high quality grass fed beef. In a survey contracted by ABP, they found that the U.S. consumer was willing to pay more for Irish beef, once the features and values of Irish beef were explained. They also conducted taste tests comparing Irish Grass Fed Beef to U.S. Grass Fed beef and to U.S. grain fed beef. According to their taste test results the Irish grass fed beef was superior to U.S. grass fed beef and also held up well against U.S. grain fed beef.

Finnerty states that current U.S. retail sales of grass fed beef equal 3-5% of the total beef market share. This is very close to the estimate determined by the Pasture Project (Wallace Center at Winrock Foundation) of 3-6% of the total U.S. beef market share. The research contracted by ABP also shows that approximately 9% of the U.S. population would like to buy quality grass fed beef. With 320 million population in the U.S., their estimates put grass fed beef demand at 28 million people. If those 28 million ate just 5 pounds of grass fed beef annually, that would require 268,199 grass fed cattle harvested yearly. Finnerty recognized the huge growth potential in the U.S. for grass fed beef and stated that, “that is precisely the space we want to be in”.

At issue is the USDA definition of “Grass fed beef”. The USDA definition states that an animal must be on grass for its entire life and has to be fed grass, grass-based silage and hay, and other roughages. In the U.S. that vast majority of the current grass fed beef also qualifies as an All Natural product raised without the use of antibiotics and administered hormones.

In Ireland, most farmers bring their animals inside for a short period of time each year and feed concentrates. Karen Coyle of Bord Bia, a market research firm based in Ireland but with offices in New York, stated that USDA officials understand that Irish farmers confine their animals for periods of the year for “animal welfare and environmental purposes”. Coyle also stated that they are working with the USDA on developing a definition for “Irish grass fed beef” or “Irish sustainable grass fed beef”. This would allow Irish exporters to have a USDA-approved definition of their grass fed beef product. Irish exporters believe that just like the growing popularity in the U.S. of Kerrygold Grass Fed Butter, the Irish grass fed beef will be popular with American consumers.

The grass fed beef market in the U.S. has certainly started 2015 with a bang. With members of the Big 4 packers entering domestic grass fed beef production and marketing, to Carl’s JR. launching an All Natural Grass Fed Beef burger, to Sysco signing a deal with Irish-based ABP Food Group to export Irish produced grass fed beef to the U.S., there is no shortage of news. This will indeed by a very interesting year.