Sales Up for Natural, Organic and Conventional Beef

MATTHEW ENIS

CENTENNIAL, Colo. — It's been a great year for beef, according to the latest data from the National Cattlemen's Beef Association. At slightly less than 3 billion pounds sold, volume was up 1.1% in the 52-week period ending July 1. Dollar sales were up 0.5% to reach $15.4 billion.

Off of a significantly smaller base, natural and organic beef also posted impressive gains, showing a volume increase of 24.6% by weight to reach 60.5 million pounds, and ringing up $325.8 million in sales, up 26.5% for the year. These figures continue a long-term trend. Between 2003 and 2006, natural and organic beef sales grew 91%, and total beef sales grew 13%. Natural and organic beef, which NCBA groups together for statistical purposes, currently represents 2.1% of total beef sales.

“It's still very much a niche market,” said Randy Irion, director of retail marketing services for NCBA, noting that while the growth story of natural and organic meats shows the budding category's promise, retailers should keep in mind that beef sales in general have been performing well also.

“Retailers are seeing natural foods chains like Whole Foods being very successful [with natural and organic meats], and their customers are paying a premium for it so they think, ‘We could get some of those customers to come back to our operation if we offered a customary lineup of product,’” Irion said.

The challenge, he noted, is striking the right balance in each store, since, while many shoppers will remain loyal to the natural and organic meat category, others may try it and ultimately view the price premium as being too steep.

The U.S. Department of Agriculture's current definition of “all natural” is very broad, indicating only that raw product was minimally processed, and that no artificial ingredients were added. As a result, most ranchers and processors currently labeling their product “all natural” have generally sought additional credentials through third-party certifiers, or have provided sufficient documentation to the USDA to qualify for labels such as “Grass Fed,” “No Hormones” and “No Antibiotics.”

Led by an October 2006 petition from Hormel Foods that requested a more stringent definition of the “all natural” claim, as well as similar requests from consumer groups, the USDA has been formally reviewing its definition of the term since late 2006.