NATURAL BEEF: THE ORIGINAL

Long before the federal government blessed the term "organic beef," producers were going to market with "natural" beef, defined by the U.S. Department of Agriculture as minimally processed and containing no artificial ingredients. Cost and seasonal limitations kept such cuts from becoming a mainstream item. For many years, sales languished in retail venues catering to natural and organic shoppers. Even today, industry watchers are hard-pressed to come up with a figure, but they estimate natural beef commands less than 5% share of the beef market.

l beef, sales continue to increase," agreed Keith Dehaan, managing partner and owner of Food & Livestock Planning, a Kansas City, Mo.-based research and consulting company that works with livestock producers and food companies. Natural foods are a specialty for the firm.

"New players come on board every day," Dehaan said. "The quality within natural beef has improved. We're starting to see it getting to new consumer venues."

Natural beef consumers are able and willing to pay a premium for the product. According to industry experts, retail prices on natural beef products can be 20% to 50% higher than prices on the same conventional products.

"We are seeing a migration of people who do not currently eat beef purchasing the natural products as opposed to a switch from conventional to natural beef," said Rick Hopkins, president of American Pasturage, a Marionville, Mo.-based producer of natural beef raised on pastures.

Growth prospects for natural beef may be limited, however, due to circumstances beyond simple consumer demand. For one thing, the seasonality issue of grass-feeding, one feed method for natural beef cattle, will automatically limit supply, said Dehaan.

"It's a difficult product to supply year-round in the marketplace, unless you get into frozen product," he said, acknowledging that many supermarkets simply are not interested in carrying frozen beef.

And, Sam Rovit, a director with Boston-based Bain & Co., a global business consulting firm, feels that unlike organic beef, natural beef is not differentiated enough to "become a real pull item with strong market demand. It's likely to remain a small niche segment."