Branded Beef

[rkaiser]

Went down to a little session at the Olds College today discussing Branding Beef Marketing. Listened to three speakers talk about branded products from the Food Service, Retail, and Packer prospectives and the last two gave us a bit of info on how they are not making any money in the conventional biz these days either.

I had a little tear for both of them as they talked of how they were struggling. Or Not. When I asked the retail fellow if the retail industry would be willing to consider change to stop the industry from taking our net import status and making us a net importing nation, he didn't have much of an answer.

I suggested that the retail sector quit usung beef as a lost leader in their "feature" store promotions and he flatly said that that would never happen. I say that it is simply aboring that the "food of kings" is being used in retail for these money hungry companies to sell the other crap in their stores. It's bloody well embarrassing to see those A&W signs that talk of two Momma Burgers for four bucks when a bloody cup of coffee at Timmy's is almost two friggin dollars.

I don't see any help from the food service or the retail sector in trying to bring the consumer closer to reality folks.

If we are going to bring the price of beef up to where we are able to make a living selling cattle or beef --- we are on our own. We are going to have to increase demand by branding product and selling it, and hopefully not giving these retail and food sector leaches any more than they damn well deserve. That is not to say that all retail and food service businesses are out to only suck our blood. Some have shown willingness to work with branded products and the rest will have to deal with increased product price once we have our markets established off shore with Canada Gold or even the forward thinking private ventures of Christoph Weder and his gang. I was quite impressed with Christoph's presentation, and even more impressed by his recent progress which the g**** vine was not exposing. Good on you gaucho.

Our own little value chain is humming along these days as well with the second "Second to None" shop opening in early March and a third on the way. Even moving from a simple supplier to a shareholder me self.

I little set back by some skepticism about Canada Gold when Cam did his presentation, but I think that some still don't understand the concept. Hard to tell the whole story in less than an hour. The bottom line with Canada Gold in my mind is that it will be a effort of pooled resources from the current conventional players and government to move product off this continent and create a shorter supply at home which in turn will increase domestic price. A win win for all of us including those of us in the niche value chain markets. Despite the confidence of Christoph and others to increase price at specific retail and food service outlets, a stronger commodity price would help us all with our sales efforts.

If anybody is in Edmonchuck on the 28th at the spring farm show, stop in and see yours truly take a crack at a Canada Gold presentation......

[wd40]

Randy when the packer says he is not making any money you need to realize on what basis he is saying that.

They use a math system that comes from some of my ethnic friends from across the pond to the east.

When one anticipates a $1,000 profit but only realizes $800 profit. Then they figure it was a $200 loss.

[vagabonddreamer]

makes me wonder...i was standing around the auction on monday talking with the usual crowd...does anyone really KNOW what the breakdown is...with respect to the price we receive for live animals as producers and the price charged at the food chain or butcher shoppe???

when i go purchase fuel...there is a breakdown on what makes up the cost...(no worries i dont BLINDLY believe it entirely)...it made me wonder how beef goes from $.85lb at the producer level...to $25lb at the store...

the comment that not making what you expect becomes a loss...made me wonder...vs

[gaucho]

Thanks for the kudos Randy…Canada Gold great idea and concept I just wonder where all these forward thinking people were in the last three years and why the heck it has taken so long to realize that a better marketing must be done internationally…You heard my comments at the meeting… you can not be all things to everyone and you will dilute yourself down… I believe some of the pillars behind the program are traceability, food safety, animal welfare and quality product….if you want this the cow calf man needs be prepared to own the calf from birth to slaughter… there is not enough money for cattle to trade hands and it destroys the integrity of your product…allowing auction market calves would be the worst thing you do and go against everything you are building as a template…. Mandatory retained ownership will help you sort the cream from the milk…the producers that are prepared to do that and stand behind your product are the ones you want not the ones that are willing to jump on another bandwagon because it is the flavor of the day… then you will have integrity.

2nd… every big business started small… I am not one for negativity but you need to market before you produce… all I see is another group of cowboy hats that is all worried about production and if you clued into what I said it is all about doing your marketing homework. 50,000 head in the first year is pretty unreal considering not one box of this beef has ever been marketed yet. The bigger you are the bigger the mistakes… start small and grow, learn from the mistakes and keep growing…

3rd…I hear rumors of a multimillion dollar application to get this program running…producers need to get off their own butt and do something rather than rely on another government handout to develop their marketing and hiring high priced consultants that tell you the streets are paved with gold…the truth is, if it were like this why are the consultants looking for work and not doing this on their own. Even in premium markets there are choke levels… there are brokers and distributors and they all will want their share of the pie.

Finally I have a lot of respect for all the work Cam has done in getting this program running as well as all the other ideas in the industry…however political rants and grandstanding do nothing for moving your cause forward… it would have been a lot better received if it was clearly laid out and less bitch and whine about who has not done this and who has not done that… everyday I could choose to look at all the negative things and challenges I face or I can choose to look at the opportunities and figure out how to deal and get through the challenges. I know ABP cause challenges… so ignore them and move on with life.

Last word of advise… don’t try to make a program that is all things to everyone… some producers need to be leaving this industry as they have never figured out and never will that they are running a business…a major part of that business is marketing and not just production….. likewise the reason our feeding industry got this big was cheap fuel, grain and a low dollar… that’s changed too and perhaps some have invested to much in overhead and fixed assets and need to be leaving as well….220 days on feed will be a thing of the past….
I don’t know all the answers but these are my thoughts… take them for what they are

Good Luck… it will take a lot of work and lots of sleepless nights… sort of like survivor

[smcgrath76]

I would echo some of your comments gaucho. Not sure why so many people talked to me over the past several years about doing something different, but no one shows up for coffee and free doghnuts when a processor with a niche product shows up looking for cattle and/or investments? Not sure why so many people still dump calves at auction the same time they always did? Not sure why we had to pull teeth to get people to go to a verified beef production workshop (until they found out about the $750)?
I think a lot of people may run any number of cows as a hobby, and this is not likely to change. I think a lot of people just want to get a payout rather than think their way through their business.
That said, I also think that a Canada Gold has a lot of promise and that a lot of people are looking for this sort of opportunity. One of the key things you may need to consider as a group is how to encourage retained ownership. Does this mean some kind of financing, etc? Quite possibly yes.

The reality is that there is only 1 kind of problem in agriculture. People. Every situation that we find ourselves in, was created by ourselves in some way. And there is only 1 group that can solve them. People.

[rkaiser]

As I said in a letter to the border beef guys the other day. Criticism cannot be seen as negative all the time or we are not much better than current industry leadership.

No one ever said that the current group involved with Canada Gold is the hand picked best of the best as far as brain trust. We all need to learn along the way, including yourself gaucho.

I will counter your questions like I needed to at the conference but still hate to step on my good friend Cam's toes. When you talk of not using price discovery and limiting the participants to grow slowly; all I can say is that that kind of activity will not stop the bleeding in this industry for a long long time. Programs like your own, or my program for that matter, will help a few but will not help the industry at large. You cannot pull people out side the "box" gaucho. They need to be nudged and led. Even simple changes to verification and simple management practices are hard for most.

I cannot agree more on the marketing side. Thus the biggest difference between Canada Gold and the new CBA program set out by the CCA. I know now even more than I did before Tuesday that you are a good marketer gaucho. But how would you like to have the backing of provincial and federal assistance in your efforts. That is another difference between your program and Canada Gold.

We are not reinventing the wheel here. Just like you, we are going to copy a lot of protocol that has been in place in the value chain biz for years. In fact, we are being taken so seriously that even the CCA cannot help talking the talk. So we set our ego's aside. Use the CCA, use the gaucho's of this world, and use the government to make the value chain system work for as many producers as are willing. The term "access to all" reads well on a politicians desk.

I even have a few good words for the likes of BIC and CBEF before I go. They too can be used and given a real job for once. Thus far all they can do is promote beef sales for a couple of multinational companies and a group of brokers who are simply about profit --- a lot like our retail buddy at the meeting Tuesday. What would happen if these folks actually promoted beef for the producer owned company we are proposing? Marketing is key gaucho, but marketing can be done with a large group and big dollars a lot better than donations of time and energy like you are obviously giving to your group.

One last comment before I let you tear this apart. I may never sell an animal through Canada Gold, or may throw our company in to the mold some day and offer Canada Gold Natural Celtic Beef. Who knows? My point is that you need not fear the Canada Gold concept. It still leaves room for the entrepreneur. We may just need to sharpen our marketing skills a bit more or even further differentiate our product.

Throwing some negatives our way is good for us gaucho, but don't think that this thing will be stopped. Far too many people jumping on the bandwagon. Yes we may have to sharpen up our presentation an bit and I have taken note of that. Positive sells.

Thanks for your input. Off to deliver some bulls from to Sask/Man today after another successful bull sale.

[gaucho]

Randy, I am not trying to be negative nor am I threatened by Canada Gold… I am just a realist and nothing can make you more of a realist than learning to do by doing. You have to have a product that has true integrity and not just a fancy label. The markets that you want to take over are already being supplied by someone…. Yes there will be growth in these sectors, however you have to be able to knock off the existing supplier and convince them that yours is better, that you have the integrity, that you have the track record and that you have capability of delivering what you say you will. I always try to put myself in the buyers situation and try to think of how they look at me presenting my product to them… they will weigh the pros and cons… realizing that only 2.5% of a population are innovators 14% are early adopters and the rest will wait and see what these guys do before they change….and you will have to show a track record before they switch… this takes time.

I will maintain that I see alot of Canada Gold as a program trying to be all things for everyone with how you will allow cattle to go into this program. I also see a lot of players trying to invent a program so that they can continue to do business the way they always have….. that’s my opinion.

As far as growing our program trust me the growth has not been stemmed from a lack of effort… the market only grows so quick… Canada Gold will realize this when start selling their first box of beef. As producer most see retail prices and think the streets are paved with Gold… truth is they have rising input costs, labor, freight and we have a consumer that has been fed the cheap food policy way to long… if the feds and the Alberta government really want to do something maybe they should spend the money on educating the public about how cheap food has been a negative to farm gate receipts.


Finally I will repeat that I am not throwing out negatives I am throwing out realities… there is a big difference between the two.

[gaucho]

Randy, I am not trying to be negative nor am I threatened by Canada Gold… I am just a realist and nothing can make you more of a realist than learning to do by doing. You have to have a product that has true integrity and not just a fancy label. The markets that you want to take over are already being supplied by someone…. Yes there will be growth in these sectors, however you have to be able to knock off the existing supplier and convince them that yours is better, that you have the integrity, that you have the track record and that you have capability of delivering what you say you will. I always try to put myself in the buyers situation and try to think of how they look at me presenting my product to them… they will weigh the pros and cons… realizing that only 2.5% of a population are innovators 14% are early adopters and the rest will wait and see what these guys do before they change….and you will have to show a track record before they switch… this takes time.

I will maintain that I see alot of Canada Gold as a program trying to be all things for everyone with how you will allow cattle to go into this program. I also see a lot of players trying to invent a program so that they can continue to do business the way they always have….. that’s my opinion.

As far as growing our program trust me the growth has not been stemmed from a lack of effort… the market only grows so quick… Canada Gold will realize this when start selling their first box of beef. As producer most see retail prices and think the streets are paved with Gold… truth is they have rising input costs, labor, freight and we have a consumer that has been fed the cheap food policy way to long… if the feds and the Alberta government really want to do something maybe they should spend the money on educating the public about how cheap food has been a negative to farm gate receipts.


Finally I will repeat that I am not throwing out negatives I am throwing out realities… there is a big difference between the two.

[grassfarmer]

I'm not sure where this CanadaGold concept will finish up as I don't know too much about it. I do question however how much value the consumer will put into it's perceived selling points ie age verified, traceable etc. The protocols i've seen for this are pretty primative compared to systems they had running in Europe 10-15 years ago. I don't know the status of other exporting countries "assurance" programs.

I agree that talking of 50,000 head in year one is too ambitious, this sounds to me like some guys wanting to keep their feedlots full, run a commodity system and attach a little tag that will qualify them for a niche market price - who will pay the premium though and for what?
I'm unclear who owns the cattle/beef once it leaves the feedlot - does the packer own it or does Canada Gold own it?
I appreciate the efforts of those involved, it's presumably a good thing to have ministerial approval and that should help the program.
I firmly believe that marketing is the key - too many producer ideas have failed because we were great producers and came up with a good product, excellent protocols but had nothing on the marketing side.
I'm not a great marketer but we are building our own beef retailing business one quarter at a time on this farm. It is all done from my little brain and I retain control of price setting. Any time you go beyond this small scale, easy to control model it seems that the margins get diluted real quick. Marketers, brokers etc quickly turn a $300-400 per animal niche market premium into a $20 premium paid to the producer. I don't know how to upscale the business model to an industry scale without this dilution of margin effect.
I'm certainly not for or against the Canada Gold program at this stage - am just unclear how it will pan out.

[per]

As many on this thread know, small time pasture to plate beef models are difficult to manage. We all have our strengths and weaknesses. Our small outfit has been direct marketing grass fed and finished beef to those ultra health conscious folk who work in those tall buildings breathing rather unhealthy air. It is a lot of work and profitable financially but personally unrewarding. The idea of Canada Gold appeals to me. Many producers using a common protocol and a common marketing arm to produce a labeled product. Those of us willing to retain ownership to the box will profit the most and those who jump out earliest will profit the least. Back to the example of my personal value chain. I would be willing to share quite a chunk of profit to not have the worry about marketing. Whether that means going with Canada Gold, hiring a marketer of my product or producing for another value chain using their protocol and cooperating with them. There are too many other things to do in life than to spend and ex ordinate amount of time on the stuff you don't enjoy. Canada Gold is worth a look and some cooperation to get it off the ground. It is amazing to me that many are willing to pass it off as a failure without any effort to help it succeed. This initiative is set up to allow everyone to benefit from the value chain and participate from your own strengths and carry risk to your own comfort level. Will it work? We know how well commodity beef has worked in the recent past. Why anyone would want to stick to that model I'm not sure.

[gaucho]

Per, as I have emphasized before that I am not shooting down the idea… I whole heartily agree that there needs to be a better job done marketing Canadian beef on an international basis than what is currently being done. The point I keep emphasizing is make the attributes tangible, real and do not water down standards for the sake of attracting the masses. If you want premiums and high end markets the product has to be such and allowing access to the cattle of every Tom Dick and Harry will dilute that. A program and a brand are only as strong as the weakest link… from what I read and what I have heard… I see some major weaknesses before the program has even started….and from what I see there are parts of this program that seem to be spin doctored way of allowing producers / feeders to continue to do what they have always done. Talking about food safety, traceability, age verification, environmental stewardship is easy making sure that every member is following the standards will be even more difficult…what do you do when you have production that is not in compliance and it hits media or damages the brand… These are risk management questions and you need to build a program that minimizes those risks from the beginning…Finally the attributes of food safety and traceability are for the most part already there…the attributes on environment and animal welfare will eventually be legislated…so once that is in place what attributes do you market your beef with then?…There is a sea of beef brands for consumers, retailers and food service floating around this world….. It has to tangible and real and not just fluff

[PureCountry]

Interesting reading this thread gentlemen. I'm not sure where Canada Gold is going to go or end up, but I am glad to see something happening in this friggin industry that's at the VERY least, a shake-up for the mundane of the past 20 years.

I am however, as much of a realist as Gaucho. The one key point you made, in my mind, was the 1 about people using this for their own alterior motives. That will have to be monitored by all others involved at every level, no different than any other industry. There will always be people looking to use certain situations, people or groups to aid in their own advancement. They will need to be tossed like last week's ABP update, if and when they show themselves. Ooops! Did I just call the ABP Grass Routes updates garbage? I really shouldn't be such a realist, it gets me in trouble.

Randy, keep up the good/hard work. The risk/obstacles in front of Canada Gold do not outweigh the potential for benefit in my opinion.

Gaucho, keep up the good stuff with your endeavours. It's good to see some of these niche markets still moving forward, and producers trying to create their future, instead of waiting, waiting, waiting and Uh-Oh, what just happened to the markets?

Have a great Easter everyone.

Darcy.