What’s the Beef?

The uproar around the Earl’s beef announcement is not surprising but the invective is been disappointing. I thought I’d reflect on what I see (based on our research and my experience) what the real issues are and how we might move forward. Apologies – it’s a bit of a long one.

Is “Humane” a red herring?

To a large degree it is. In a survey conducted in late 2015 Canadians indicated they feel pretty good about the state of animal welfare in Canada. That said, two thirds of them say they want more information on animal welfare and that that information is making a difference in their choices of where to eat and what to buy. I believe that the “average consumer” (there is really no such thing) feels pretty good about the Canadian beef industry in general. There is, however, some desire to be sure and to avoid “outliers.”  I know that the contention that Canadian cattle aren’t treated humanely felt like a personal attack to many producers but I really don’t think that’s what the message is.  Its about being sure every time.

That’s why the certified in certified humane is more important. Canadians do feel good about animal welfare in general and beef producers specifically but there have been some things that have raised uneasiness both inside and outside of agriculture. There have been hidden video incidents in dairy, layers and turkeys. These have raised the profile of animal welfare and also the concern. Distrust is also fostered by things like the Volkswagen scandal. Consumers want to be sure they are getting what they think they are. This is a very real brand risk for restaurant companies. Retailers provide choice so the products are really only reflective of the people who produce them. For restaurants the experience and the products all reflect on the restaurant brand so there is bigger inherent risk. Tim Hortons and McDonalds are big enough to do the certification (and the associated auditing) internally. Smaller companies like Earls can’t do that themselves and so they go with second party certification. If we had better industry assurance (which the CCA says it is working on) this issue would go away. Traceability and accountability matter more and more today.

Do we want to differentiate on welfare?

The truth is we already are – just not in beef. We probably do want to ensure that consumers have faith in a minimum standard of care (that we are already meeting) but there may also be producers who differentiate on scale of production, density and other factors. We’ve seen differentiation on breed, place of origin (Alberta and Ontario). We see differentiation in lots of products and many food products. This will happen and isn’t a bad thing.

What about supplemental hormones?

Hormone implants continue to be an issue. They are not an issue for me personally. Full disclosure – I used to sell them. I am fine with beef that has been produced with a small amount of synthetic hormone. It doesn’t persist in the meat. We’ve been eating this beef safely for years. It provides efficiency better which lowers the cost of production. It also reduces feed consumption and thus reduces the emissions associated with beef production. I understand all of this and eat beef produced this way without concern.

There are people for whom it is a concern.   They simply aren’t buying the science. Or they worry that the science will change – we’ve seen that happen for many things – there are no guarantees. They don’t like the idea. It probably doesn’t help that we have news stories around hormones and steroids in sports with negative implications. We can try to convince them but if we can’t they can make a different choice. They can make the choice not to eat beef – this is clearly not the preferred outcome. There is a lot of pressure on beef as it is. Our population is aging and eating less. We’re told to eat less red meat. If we say “our beef is implanted, take it or leave it,” they may choose to leave it. Their other choice is to find someone who is selling beef raised without supplemental hormones. They have that right. There are producers both within and outside of Canada that offer this beef. Earls wanted some and couldn’t find enough in Canada to ensure stable consistent supply so they went to a US supplier. Frankly, given the A&W initiative and the increasing market for this product I’m surprised that there are not more producers jumping on board in Canada. The fact that some are suggests that the premium they are extracting is worth the increased cost.

I’ve seen posts in social media saying that implants reduce greenhouse gas emissions so consumers are inducing climate change by refusing implants. That may be true but it’s a dangerous position. Beef is already criticized for being bad for the climate. Consumers who listen to reductions arguments may be less likely to eat beef at all. I’m just not convinced this is going to be an effective argument.

What about antibiotics?

This issue is the one most fraught. It is extremely complex. We have different classes of antibiotics. We have antibiotics in feed. We have therapeutics. There are arguments for and against mass medication and prevention. The science on resistance is still equivocal. Again, I understand the rules on withdrawal and prudent use. I understand that there are not residues in the meat. I feel strongly it is irresponsible (and hurts welfare) not to treat individual animals that get sick. How do we approach a skeptical consumer with a nuanced message on something that concerns them? That has brought us to raised without antibiotics (RWA). This usually means that an animal which gets sick gets removed and diverted to another value chain.   I think it sends the wrong message. That animal is still valuable and safe to harvest and eat.   Whose responsibility is consumer education? Consumers are asking for these products – restaurants have risk if they don’t offer them. Can we convince them or is the outcome of no RWA simply less beef consumption? It’s important to understand this before we develop a strategy to communicate.

Does local matter?

I think that local matters.  It just matters less than some of the other characteristics.

I’ve seen reference to German research that suggests consumers prefer local to organic. It was argued that this is evidence of the folly of Earls, A&W and others. This is a dangerous assumption.

1. Canadian consumers are different from German ones.
2. Supplemental hormones are not permitted in European.
3. Animal welfare standards are perceived as stricter in Europe so consumers may have greater assurance.
4. Things can change quickly. Our research suggests that concern about animal welfare has grown significantly in the last two years.

Whether we like to hear it or not restaurant consumers seem to be prioritizing these other factors over local. You have to know that both A&W and Earls did consumer research to gauge reaction. They don’t take these decisions lightly.

If we offer these characteristics in Canada, I expect we would see companies move to Canadian product. It would be in the next tier of preferences.   Even in the absence of consumer preference I expect that sourcing quality imported product is more expensive than domestic.

Why are restaurants different?

Restaurants are different because they can’t offer the wide choice that retailers can. It also matters (as mentioned above) what they choose. Restaurants can provide more information to consumers than retailers can. They have fewer products and a more individual interaction (especially in a full service context) so product attributes can be discussed more fulsomely. It’s also worth noting that people make decisions differently in restaurants. They tend to indulge and value “premium” attributes more. All of these factors mean that restaurants face a different demand and different constraints. Producers may choose not to meet the demands of individual consumers who want things like RWA or no supplemental hormones but is it reasonable to expect restaurants to do the same?