Natural Foods Merchandiser

Risky Business: Consumers Face Meaty Decisions

After Dec. 23, 2003, when America?s first case of mad cow disease was confirmed, lots of people added one more diet-related resolution to their New Year?s lists, a vow to restrict the amount or types of meat they would eat.

Meanwhile, natural and organic meat producers and retailers were setting their sights on a prosperous new year. And, at least for the short term, they were not disappointed. Mel Coleman Jr., chairman of Coleman Natural Meats, said that one 25-store region of a natural foods supermarket saw a 30 percent increase in sales in the week following the announcement, compared with the same week in 2002. And one mainstream supermarket chain reported steady sales of Coleman beef amid declining sales of conventional beef. But, Coleman cautioned, it?s too early to tell what the long-term effects might be for natural beef producers.

The traditional meat industry could be facing serious problems. Many analysts expect more of a hit in the export market than domestically. According to a Jan. 5 report by Leonard Teitelbaum, a food industry analyst with Merrill Lynch, in the week following the announcement live cattle prices were down 15 percent from the previous week. Retail margins, however, ?were robust.?

On the other hand, Canada reported losing $11 million a day during its mad cow episode last summer. But it was international trade bans, not consumer response, that nearly brought the industry to its knees like a downer cow. Now, many of the same countries that closed their borders to Canadian exports are prohibiting U.S. beef. The difference is that Canada exports between 44 percent and 60 percent of its beef while the United States exports only 10 percent of its annual production of beef, according to Teitelbaum.

?We have assurances from the [U.S. Department of Agriculture] that beef demand remains strong and that consumer confidence remains strong at the retail level,? said Bill Bullard, chief executive of R-CALF USA, an association representing cow/calf producers and independent stockers and feeders.

?We?ve got an iceberg?
But that doesn?t mean that the window of opportunity for attracting customers to natural and organic meat has closed. While personal resolutions were likely forgotten by mid-January, it only takes a few not-so-subtle reminders to recapture the attention of American consumers.

?There?s more mad cow disease in North America,? said John Stauber, author of Mad Cow U.S.A.: Could the Nightmare Happen Here? (Common Courage Press, 1997). ?Clearly we?ve got an iceberg out there. We don?t know the size of the iceberg because the USDA testing has been completely inadequate.?

So, if they don?t already know it, now would be a good time to tell consumers that organic beef, by definition, is raised on grains and grass, not feed composed partly of animal byproducts. Let them know that organic standards require a paper trail identifying the cow?s origin and every stop it makes on the way to retailers? shelves.

It?s also a fine opportunity to take the discussion beyond the immediate concerns of mad cow and talk about the use of pesticides and genetically modified corn in feed, and the use of growth hormones and antibiotics on factory farms. Consumers also may be interested in the differences between labels such as organic, natural or grass-fed.

The downside to educating consumers is that you may increase demand beyond what?s available, says Katherine DiMatteo, executive director of the Organic Trade Association.

?There are just under 900,000 small family farms and ranches in the United States,? said Coleman. But many of them have difficulty working with retailers because their supply is too small or inconsistent. ?We have purchased cattle from about 700 or 800 of those. ? We?re continually making contact with more and more small family farms and ranches that want to be involved in a program like ours,? Coleman said. ?We can bring [cattle from numerous ranches] into one source and distribute it.?

Customers motivated by information about mad cow disease and other problems with conventional beef just may become repeat purchasers of natural and organic products. ?[Consumers] do move from whatever the entry point is,? DiMatteo said. ?I would think that dairy products would be next for someone coming in from the meat end.?

Natural Foods Merchandiser volume XXV/number 2/p. 1, 17

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