CALF_News_June_July_2021

6 CALF News • June | July 2021 • www.calfnews.net Continued on page 12  By Wes Ishmael Contributing Editor D omestic consumer beef demand last year was the highest in three decades, pandemic and all, based on the Annual U.S. Consumer Beef Demand Index. Understanding why is complex, but there’s no secret beef demand grew in recent years as cattle producers churned out more fed cattle of higher carcass qual- ity, which is tethered to a reliable eating experience, including taste and flavor. Prime and Choice beef production increased from approximately 11 to 12 billion pounds in the early 2000s to around 18 billion pounds last year, according to Randy Blach, CattleFax CEO, during this year’s International Livestock Forum hosted by Colorado State University and the National West- ern Stock Show Along the way, the Choice-Select price spread maintained its strong pace, while the spread between Choice and the upper two-thirds of Choice grew. The Prime-Choice spread wilted because of the dearth of restaurant business. “We produce more high-quality beef and consumers continue to say they want more,” Blach said. Since 2000, he noted that beef gained 7 percent share of total meat spending away from pork and poultry. Keep in mind cost, convenience and safety always underlie the price of admis- sion to consumer pocketbooks. Consumers Choose Protein for Different Reasons Figuring out why different generations of consumer segments choose different protein products, brands and purveyors is only slightly more difficult than hog- tying a one-legged flea. Consider how differently you view the world and make decisions compared to generations older or younger than you. For marketers, for decades, that meant understanding the Baby Boomer generation (born 1946 to 1964), which continues to wield such extraordinary economic clout. But that’s shifting. Baby Boomers still represent the greatest dollar share of spending for meat and poultry at about 35 percent, with estimated growth potential of 4 percent, according to Michael Uetz, a founding partner of Midan Marketing, LLC. Conversely, he explains Millen- nials (born 1981 to ~1996) represent approximately 23 percent of the dollar share for meat and poultry currently, with estimated growth of 51 percent over the next 20 years. Generation Z (born 1997 to ~2015) will be the next market disruptor after the Millennials and is just beginning its spending years. Midan Marketing works with meat companies to help them understand consumer dynamics and how to market their products to them. Uetz shared insights during a webinar hosted by the National Institute for Animal Agricul- ture (NIAA) last year. “Each generation responds to the marketplace differently based on their attitudes, their perceptions, the way they were raised,” Uetz said. “We need to understand the basics of what drives each generation.” For instance, Uetz pointed out Mil- lennials are the first digital natives, growing up with smart phones and the internet. They’re from the age where technology changed globalization. Many also grew up during the Great Recession. “For them, it’s about access, not owner- ship,” Uetz explained. That generation tended to be more reluctant to make large investments in cars and homes. They were more content to rent, be it a lease or spawning shared services like Uber. Millennials tend to be high consumers of protein, including meat, but they like variety and alternatives. “They’re very socially connected. They have a daily pursuit of wellness that includes exercise, eating smart,” Uetz explained. As for Generation Z, Uetz noted they will be the most ethnically diverse generation in history. They’re socially connected, too, spending about 10 hours per day online. Their attention span is about 8 seconds; they crave constant stimulation. “We’re finding out Generation Z gets online and needs a lot of information before making a purchase, but they also like the experience of shopping in brick and mortar stores,” according to Uetz.“Think about all of the things they have in their thought process, in their purchase decision plan that they’re going to consider when they buy products, meat in particular.” For Millennials, and it appears for Generation Z, Uetz says transparency, viewed as similar to trust, is becoming an Choosing Beef What Drives Purchase Decisions Amid a Growing List of Challengers?