From staff reports OKLAHOMA CITY – Certified Angus Beef has reached its second highest production year, with a growth of about 4.8 million pounds. CAB President John Stika largely attributes that growth to international sales.
“While international is the smallest of the three divisions that we have, we grew our international sales by almost 5% this year,” Stika said.
Domestically, CAB’s food service division experienced its second-best year, marking 14 years of growth in the past 15. However, the retail division continued to feel pressure from high prices, translating into margin strain in stores and typically a reduction in feature activity of beef and Certified Angus Beef. Retail sales were down 1.5% overall.
“That gives you some idea of how we grew,” Sitka said. “It was really at international food service, but make no mistake, our volume still flows through retail.
Retail accounts for 42% of CAB’s overall business, he added. Domestic food service accounts for one-third “and international business makes up about 16%. The residual is product that goes into further processing, like grinding operations and so forth.”
Stika admitted that CAB’s success is due to producers, retailers and food service providers who profitably handle the product. He noted that CAB has brought segments of the industry together over the last 46 years, with a focus on quality from the producer to the end user and consumer.
“It all comes down to creating value in the eyes of the consumer,” he said.
“And that value translates, hopefully, into margin, and that flows back through every segment of production.”
As cattle numbers dwindle, it is becoming more difficult for CAB to meet the needs of end users and consumers, but Sitka said CAB has a strategy centered on creating demand.
“If we create enough demand for the product, Certified Angus Beef, and go to one of our licensed partners who is selling under our brand name, that is the key to getting cattle and product into a Certified Angus Beef bag or box.
Sitka said CAB’s licensed partners help create product demand which “is the key to getting cattle and product into a Certified Angus Beef bag or box. Along with that, I think we are all in the same boat. It’s not only making sure that existing customers get the product that they need but also, how do we all continue to grow market share?”
In the next couple of years, Sitka said CAB will focus on “making sure that the brand remains strong and well-positioned for the growth we expect to see as pastures once again begin to populate with even more Angus cattle.”
Although an Oct. 24 CAB press release reported that the total fed cattle supply declined by 1.6%, this year, a record 5.96 million carcasses were certified for the brand. This was an overall increase of 2.4%, with 37.4% of all Angus cattle meeting the brand’s strict quality standards. Lastly, a record 730,000 carcasses qualified for CAB Prime, which their website says falls into the top 3% of all beef qualities.