Beef Product Development Efforts Are Paying Off

DENVER, CO (July 26, 2000) – Make a difference.  That simple statement reflects a philosophy that`s proving successful for the beef industry`s new product development efforts.  These efforts are helping new beef products hit the market in greater numbers -- and with more support from manufacturers.

Opportunities for the introduction of innovative beef products are the focus of the industry`s New Product Development Team, which is funded through the industry`s $1-per-head beef checkoff and coordinated by the National Cattlemen`s Beef Association (NCBA).  The 14 team members represent various segments of the food development and marketing fields, and help create ideas for new products, develop prototypes and test them with companies and consumers, then promote the products to manufacturers who are able to take these ideas to the final stages -- production and marketing.

"We look at our job as lighting brush fires," says Bob Moeller, a new product team member from Chaska, Minn.  "Not all brush fires are going to burn into a great big blaze.  But if we light enough brush fires, that will begin to generate an energy of its own."

These "brush fires" were more common in 1999, as new, convenient beef products hit the marketplace in increasing numbers.  The work of the team is focused on meeting the needs of consumers through innovative ideas at the manufacturing level.

For instance, Moeller says the addition of a beef item to Hormel`s Always Tender line demonstrates the team`s success.  That product is in test markets for the company, with apparently favorable results to date.  Other companies, like Jimmy Dean, also are adding beef to their product lines.

"When we think of Hormel, we think of pork," says Moeller.  "When we think of Jimmy Dean we think of sausage.  But they have sales people (throughout the country).  They have refrigerated trucks driving up and down the road.  They have brand names that are recognized and trusted by people.  And they are looking for ways to expand their businesses."

Lee Hall agrees.  Hall, who has a family feed manufacturing and farming operation in Lexington, Ky., is chairman of the beef industry`s joint New Products and Culinary Initiatives Committee.  He says he`s enthusiastic about the team`s work with successful marketing-oriented companies that have not traditionally considered beef in their lines. 

"That`s exciting, because (the beef industry is) fairly immature in terms of marketing consumer-friendly products," Lee says.  "We`ve been a commodity marketing organization and industry."

Lee cites cheese companies as examples.  "They`re taking a commodity that the government used to give away and they`ve shredded it and put it in a package, given you a recipe, slapped it on a pegboard and charged you $2.69 for two cups worth," Hall says.  "We can learn from their example."

Evaluating Success

Evaluating the success of the industry`s efforts is difficult, since much of the work is done behind the scenes with manufacturers.  In addition, expectations of beef producers, who fund the work through their beef checkoff dollars, are high.  But Rich Otley, director of evaluations for the Cattlemen`s Beef Board, which oversees the spending of the checkoff dollars, says the effort is having as much success as can be expected for the level of funding.

"Statistically, only seven percent of (any) new products ever make it to store shelves," Otley says.  "And a smaller percentage of those are successful.  It is sometimes a painstaking process that requires a lot of investment.  But there`s one thing for sure: the reason the chicken industry got so far ahead of us in the last 15 years -- as they did -- is a result of the work they did in new product development.  It is absolutely paramount for our industry to keep doing what we`re doing with new product development if we intend for demand for our product to keep going up."

Otley points to the recent increases in beef demand as evidence that new product development, in conjunction with other checkoff-funded promotion, information and research efforts, is having an impact on the industry`s success.  In 1999, for the first time in 20 years, demand in each quarter was better than the preceding quarter. 

Recent prices for specific beef cuts also are an indicator of success, according to Tony Mata, a meat scientist and team member who has been in product development for 22 years.  He says the manufacturer of one new product, a boneless beef filet made from a muscle in the beef chuck, expected a seasonal price drop in beef chuck prices -- which didn`t materialize.  "So in effect, we can see some tangible evidence that value-adding is taking place," Mata says.

Companies that are partnering with the new products team are providing their own type of evidence of the team`s success: this year the companies will put more than $100 million behind their partnership efforts.  Last year these companies invested about $10 million in the program.

Team member Joe DePippo says beef producers and other members of the industry benefit from team efforts.  Getting more new beef products in commercial production adds value to the carcass, and increases the returns to beef producers in the long term.  The process isn`t an overnight one, though.

"Everyone wants home runs and grand slams," says DePippo, of Birmingham, Ala.  "I feel we`re going to have a lot of really good hits here.  You`re going to continue to see more and more successes.  We`ve got a lot of momentum."

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The NCBA new product development initiative is funded by the national beef checkoff, administered by the Cattlemen`s Beef Board. This 110-member board is appointed by the Secretary of Agriculture to oversee the collection of the $1-per-head checkoff, to certify state beef councils, to implement the provisions of the Federal order establishing the checkoff and to evaluate the effectiveness of checkoff programs.

Producer-directed and consumer-focused, the National Cattlemen`s Beef Association is the trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry.