The dynamics of the meat and poultry market are changing. For starters, our consumption of these products has fallen. According to the Livestock Marketing Information Center, consumption of meat and poultry in the U.S. declined by about a pound per person in 2010, the fifth decline since 2004, with per capita beef consumption dipping to its lowest level since 1955. Figures from Statistics Canada and the Canadian Meat Council suggest a similar trend in this country.
One reason for the change is the shaky economy, which has consumers cutting what they spend on groceries and other items. But there are further factors at play. For example, outbreaks of foodborne illness such as Listeria and E. coli have some consumers questioning the safety of meat and poultry products. A 2010 Mintel report noted that, in proprietary research on the topic, 63 per cent of respondents indicated worries about the safety of these products. In addition, the study found that red meat carries negative health perceptions for some people, with 48 per cent of respondents saying they believed red meat to be a less healthy, higher-fat option.
Another factor in the changing dynamics of meat and poultry is the growing number of consumers who include ethical considerations in their purchasing decisions — in particular, concerns about the environment and animal welfare. For example, consumers want to know if the meat they’re buying is free of antibiotics and synthetic hormones. Were the animals confined or raised outdoors on healthy pasture? Were they fed quality forage or animal by-products? Was good environmental stewardship practiced from gate to plate? Some of these issues overlap with consumers’ quest for healthy, flavourful food. For example, some maintain that pastured animals produce leaner, tastier meat because they’re less stressed than those raised in confinement.
Less meat, higher quality, more choice
Put these factors together and you have a market in which people are buying less meat, but demanding higher quality and many more choices, including products they perceive as having a cleaner or more ethical provenance, such as natural, antibiotic-free, organic or locally raised. Estimating the size of the market for ethical meat is complicated, because different industry and regulatory bodies define terms like natural, organic and sustainable in different ways. However, the consensus seems to be that, while sales of these products remain a small proportion of the total, they have risen markedly in recent years.
As a result, notes Leatherhead Food Research, many leading producers of meat and meat products now focus on food quality and safety as a core part of their strategy, removing artificial additives and working with the industry to develop quality-control procedures. Mainstream chains like Walmart and Safeway have introduced organic and locally produced foods, while organic grocers such as Whole Foods have strengthened their position. In addition, specialty businesses such as Cumbrae’s in Toronto — which sources sustainable beef, pork, lamb and poultry from local farmers — are building both a regional and national presence.
Choices Market is one of the retailers thriving in this segment. With outlets across metropolitan Vancouver and in Kelowna, B.C., the store sells a wide selection of natural, organic products and locally produced food, along with conventional products. According to CEO Mark Vickars, almost all of the chicken and about 80 per cent of the beef Choices sells is organic, reflecting the expectations of the store’s key customers — women in the 35-to-55 age bracket, affluent and educated, for whom health is the main priority. There’s also a customer contingent Vickars calls “committed idealists,” aged 18 to 25 years old, who want food that’s been produced in an environmentally responsible way and who may have concerns about animal rights as well. The market for ethically raised meat is now sufficient that supply line issues are emerging, Vickars notes. “Demand is beginning to outstrip supply, especially with beef because it takes longer to raise.”
Opportunities for innovation
Meeting this demand offers opportunities for innovative producers such as Spring Creek, a provider of premium beef products raised without antibiotics or added hormones. Located east of Edmonton, Alta., it’s part of a family run operation that also comprises a cattle ranch and an integrated bio-refinery to produce green power and bio-fertilizer.
Working with a team of 50 to 60 ranchers across Western Canada, Spring Creek ensures that cattle are raised according to strict protocols that include traceability measures for each cow produced, and a third-party audit process to monitor all aspects of animal care, explains president Kirstin Kotelko. Products are processed and packaged in federally inspected, HACCP-approved facilities, and sold to consumers through Sobeys, Safeway and Co-op stores in Alberta and B.C. They’re also supplied to Fairmont hotels in Lake Louise, Banff and Toronto, as well as to South Street Burger outlets in the Greater Toronto Area. To gain access to additional markets, Spring Creek recently signed a deal with Alberta-based packers XL Foods Lakeside.
“Demand for ethically produced meat is definitely increasing,” says Kotelko. “When Spring Creek was launched in 2003, you might have seen this type of product in one out of 10 grocery stores. Today, it’s more like eight out of 10.” Kotelko sees this as the result of media attention and greater health awareness on the part of consumers. “People also want to support food produced in their own country and in their own communities by local businesses.”
Important as these attributes are, they remain secondary to quality and taste, Kotelko adds. “What our customers appreciate is that our products are great quality and great-tasting. It’s the icing on the cake that our beef is also raised in Canada and is antibiotic-free.”
Will the market for ethically raised meat continue to grow? The consensus seems to be that it will, though perhaps not as quickly as in recent years. “This is a niche that grows or shrinks with the economy,” says Robin Horel, president and CEO of the Canadian Poultry and Egg Processors Association. “In tough times, price will trump ethical considerations. What’s important for all suppliers is to provide people with choice — a range of safe, quality meat and poultry produced in different ways and sold at different price points.”