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Beef consumers ‘trading up’ in response to higher prices

Beef Central, 18/01/2016

Consumers have responded to rising beef prices in recent years by becoming more discriminating on quality, an analysis by US animal science professor Daryl Tatum suggests.

Professor Tatum, from Colorado State University, analysed five recent studies which assessed quality grades and their impact on consumer acceptability.

He said that as beef has become more expensive, beef consumers have become more discerning on quality and value and have demonstrated a willingness to “trade up”, paying premium prices to obtain the kinds of beef products and eating experiences they desire.

“Today’s quality-driven consumers seem willing to pay more for beef as long as the experience justifies the price,” professor Tatum states.

Taste remains the number one attribute consumers value when purchasing food, and the primary reason many prefer beef over other types of meat.

The challenge for the beef industry is to ensure that the differences in product attributes most valued by beef consumers is accurately identified and clearly communicated across the entire beef chain.

That is not necessarily easy, because the primary attribute of interest – taste (and more specifically flavour, juiciness and tenderness)– is an “experience attribute”.

In other words, consumers cannot assess a beef product’s performance and value until they have tasted it. If their experience is good they are more likely to buy again, but less likely to repurchase if their experience is poor.

The core message for the beef industry is to “consistently provide consumers with a pleasurable eating experience at a compelling price”.

To achieve that, focusing on beef quality grades is critical.

As would be expected, each increase in quality grade is associated with a higher probability of a positive eating experience.

The five-study analysis showed consumer demand in the US market has strengthened for premium grades (Prime and Premium Choice) and weakened for commodity grades (Low Choice and Select).

“Recent demand trends suggest that many quality conscious beef consumers are unwilling to pay today’s prices for the level of performance provided by commodity beef and, instead, have opted to trade up, purchasing premium beef products, thereby improving their odds of receiving a performance commensurate with the higher prices they re required to pay.”

Flavour may also now be more important to consumers than tenderness, Professor Tatum noted:

“Consumers studies conducted in the 1980s and 1990s identified tenderness as the most important beef sensory attribute contributing to consumer satisfaction (Savell et al. 1987; Miller et al. 1995l Huffman et al. 1996).

“However, results of more recent consumer studies suggest that beef flavour may have become more important than tenderness to today’s consumers (Corbin et al., 2015; O’Quinn 2015).”

Further, in the 2011 National Beef Quality Audit, food service operators and retailers were asked to define beef eating satisfaction.

The most frequent response in both groups was flavour (62.5pc of food service participants and 70pc of retailers) followed by tenderness (52.1pc of food service participants and 66.7pc of retailers).

 

Read Professor Tatum’s full December 2015 report here

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