Recently I came across a publication by the New South Wales Meat Authority in 1998. I have no idea whether this organisation still exists however the content was extremely interesting.
Reading the article entitled “Meat Industry Facing Reality”, made me wonder if the red meat industry has ever faced reality. It seems to me that greed is a total focus of some parts of the industry.
Neil Inall stated at the start that many people in the Australian meat industry believe the industry is in crisis and has been that way for some time. In beef, according to reports made by ABARE published in 1998, the average profit by beef producers of Australia in 1997-98 was -$13,665. It was small consolation that that figure was above the preceding five-year average of 1995-96. In processing five works had closed in New South Wales in the past year. Supermarket companies claimed that there is very little margin in meat. (50% is not a little margin). And consumers are grumbling about inconsistencies in taste and as a result are consuming less beef. They are often dissatisfied with the product they buy. Our so-called prime products, they decided are not consistent enough for modern discerning shoppers. In 10 years we can expect a handful of efficient plants across Australia which is the current situation in the United States.
According to recent MSA trials in Brisbane, only 15-20% of beef cattle in Australia are eligible for grading – in other words have an acceptable palatability for table consumption. This compares with 70% in United States. MLA 2015 claims 30% of beef killed in Australia is being graded under MSA added to this not all processors and retailers are using MSA and not all beef is suitable.
From a consumer’s point of view beef is inconsistent attributing to the causes of decline in consumption of beef. Many people enjoy eating beef as they no longer experience the same level of satisfaction with the products.
Clearly the industry failure to understand and satisfy consumer expectations has led to lifestyle changes that have had a significant impact on purchasing patterns. The inability of producers and processors to predict outcomes and general product inconsistency has led to a lack of consumer confidence. Also the beef industry credibility with professional chefs is very poor. Chicken and fish is consistently tender and bland, therefore lends it to complimentary flavours and requires no variations in cooking to meet consumer needs. You cannot build consumer confidence and product loyalty if the consumer cannot repeat purchase the product that suits their needs.
The MSA system provides an opportunity to break out of the present downward price spiral. The system has identified five star products that should be actively promoted as a flagship product that is capable of establishing a benchmark and set expectations of exceptional eating quality. The fact is that in 2015 MSA does not have any rating system. 3, 4 and 5 star rating has disappeared along with independent graders, DNA testing, etc.
The greatest concern is whether the industry is mature enough to accept the disciplines of the system and makes cultural changes essential to its success. (Obviously not!) If you continue to supply inconsistent product consumers will continue to select other food products which have none of the inherent problems of beef. That is, food products that is consistently tender, provides simple and concise cooking instructions and is easy to cook etc.
In 2015 when we look back we have seen MSA try to break the mould and ensure that we have a consistent product. However we have seen retailers and processors refuse to accept MSA in its’ original form and has not been mature enough to make the necessary cultural changes. The simple fact is that when a retailer can buy a product at a discount and then sell that product as a prime product he is making a killing all the way. A program that would identify and ensure consumers get a consistent product would mean forgoing huge profits; this has led to the lucky dip of inconsistency to get worse. To my way of thinking we should be looking carefully at the hundreds of millions of dollars that we have invested in MLA and its grading system MSA. Until we can break the mould we can expect more of the same; beef consumption dropping while processors and retailers continue to gain huge profits whilst the producers, and consumers, are disadvantaged.
Simple calculation: In 1998 beef consumption was 40kg per person now down to 28kg in 2015, a difference of 12kg. For the population of Australia of 24 million people this is a gross loss of 288,000t in sales. To get this into perspective our biggest overseas market is the US who takes 380,000t of mostly grinding beef.
In 1998 it seems that the NSW Meat Authority identified many of the problems and proposed suitable solutions have been ignored by the industry as previously explained. Change is essential to sustain producer profitability and consumer satisfaction.