News

Woolworths gives historic green-light to MSA adoption

Jon Condon, 27/10/2011

A seismic shift in domestic supermarket beef retailing will occur following Woolworths’ confirmation yesterday that it will embrace the world-leading MSA grading system as part of its red meat retailing platform from early next year.

The historic move is being widely interpreted as being aligned with Woolworths’ retail competitive position, in response to major competitor, Coles’ adoption of an HGP-free retail strategy in January.

Beef Central broke the news of Woolworths’ intentions to move towards MSA supply in its August 16 article “Woolworths lays foundations for MSA strategy.”

In an exclusive interview yesterday afternoon with Woolworths general manager, fresh meat, Pat McAntee, it was confirmed that Woolworths will hit the trigger on its blanket application of MSA across its beef offer in its 840 supermarkets early next year, possibly as soon as January.

“This is a very exciting move for us as a company, and equally, I believe everyone involved in the domestic beef industry will be absolutely tickled pink to see the nation’s leading retailer of beef working with industry to bring MSA-graded and identified product into Australian households,” Mr McAntee said. 

The platform for the company’s adoption of MSA is already underway, with supply chains involving livestock procurement, feedlots and processors being adjusted and prepared for MSA requirements. Staff working in supermarket meat departments will also undergo MSA knowledge induction in coming weeks, to further drive the program’s introduction.

Mr McAntee said in-store staff would play an important role in consolidating the launch of MSA product in stores, and what the label stood for.

“We want to make sure that prior to launching MSA in our stores, that right through our meat business, everyone associated with it – both internally and through our external supply partners – are totally familiar with the process,” he said.

That process would apply through the end of November, then the focus will turn to Christmas sales and products, with a view to a full-blown MSA launch “early in the New Year,” Mr McAntee said.

He confirmed that the MSA identity would be represented “right through to the individual pre-packs’ lying in the chilled cabinet, but would also be prominently displayed in general merchandising in the meat department.”

“Customers will be able to clearly see the MSA brand and logo which will underpin our product in the cabinet,” he said.

Asked whether Woolworths would back the new-year MSA launch with promotion (rival Coles is said to have spent $1 million on its HGP-free launch marketing program this year) Mr McAntee said communicating the message to customers was an important part of everything the company did, and it would be a fundamental part of the introduction of MSA in stores.

“We will play a part, along with MLA and other industry partners to better educate our customers around the MSA standards. Millions of Australian households receive the weekly Woolies brochure in their letterbox, and we are promoting great Australian beef products on a constant basis, through in-store promotion, letterbox drops, print and electronic media and other outlets. MSA will become part of it.”     

“Woolworths has continued to build market share, especially over the past six months, and a lot of Australians clearly see Woolworths as their first choice for the purchase of meat products. They will continue to get the same great quality meat they have today, only it will be underpinned by MSA standards,” Mr McAntee said.

Woolworths-aligned processing plants started grading small numbers of MSA cattle under trials in May. When fully activated, MSA operations will be applied at six sites, including Ipswich abattoir (Qld), Teys Australia Tamworth (NSW, Longford (Tas); T&R, Murray Bridge (SA); and Walsh’s, Bunbury (WA). Additional supplementary supply will be directed through Teys Australia’s Wagga factory, and is likely to be sourced from other MSA-licensed abattoirs, as required.

While the program initially may operate with a maximum MSA boning group of 11, some ‘unbelievably good’ results are known to have been recorded in recent dry-runs. One line of 72 steers and heifers killed in one of the company’s southern supply chains recently produced 71 carcases in MSA boning groups 1 and 2, and the last in group 5.

Grid pricing schedules will be modified in coming months to reflect the move to MSA operations, with greater emphasis on grading performance likely. More details on this as they are finalised.

“Part of the work we are doing is getting feedback from our supply partners, and obviously we have a well-earned reputation among our beef producers for being responsive in the returns back to producers, and those returns will be reflected, as we move forward with MSA,” Mr McAntee said.  

Asked whether there would be any move to adopt Tenderstretch technology at major processing sites like Ipswich/Brismeats to further lift MSA performance of cattle coming through the program, Mr McAntee indicated it was not currently part of plans.

But he said the company was “at the forefront of innovation and will continually explore ways of improving the quality of our product through to customers, and efficiencies and productivity gains within the supply chain.”

“If it’s going to improve the quality of the offer to our customers, and give them better value, that’s what Woolworths is about.”

He said more work still had to be done on the question of whether the company would apply different ‘MSA Star’ ratings to different retail products, based on predicted eating performance.

“But at all times, we see the need to enable the customer’s choice to be quite simple when shopping in the meat case. We spend a lot of time seeking customer feedback. One of the things we know is it’s important to make it easy for the customer to make their choice. We’re not yet sure whether a Star system would make it easier or more confusing.”

Unattributed comments circulated yesterday suggesting the new Woolworths program would be grassfed-only and would start in November were factually incorrect, the company said.

Big boost to MSA momentum

MLA chairman, Don HeatleyGiven Woolworths weekly requirement for around 8500 yearling steers and heifers, the injection of grading numbers is expected to boost the MSA program’s national throughput in the current 2011-12 fiscal year to somewhere around 1.6 million head.

Meat and Livestock Australian chairman Don Heatley said the Woolworths announcement was a milestone of enormous historical importance to the MSA program.

“Support for MSA from the major red meat retailer in Australia is a fantastic endorsement for the program, but also the underlying benefit to the Australian consumer,” Mr Heatley said.

“Companies like Woolworths do not undertake such decisions lightly, and its strategy is a fantastic recognition that the consumer deserves MSA’s level of quality and consistency.”

Mr Heatley said while Woolworths had previously embraced most of the meat science principles behind MSA, it was nevertheless a ‘very significant’ step in adopting the system and its identity in its entirety, given the issues associated with company brand protection.

“The move heavily endorses the time, money and effort that has gone into the industry’s development of MSA over the past 15 years, which continues to evolve, even today,” he said.

“Woolworths' recognition of the MSA science behind eating quality is a moment of great historical importance.”

  • Beef Central will file a comprehensive article outlining producer and other stakeholder reaction to Woolworths’ MSA move later today. A  series of articles on how Woolworths is putting the MSA system into place within its supply chain, and how it is being executed will also appear in coming weeks.
     

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