Dr. John Stika - Seeking Credibility With Consumers in a Confusing Marketplace

Seeking Credibility With Consumers in a Confusing

Marketplace John F. Stika

President, Certified Angus Beef LLC

• 1978 – Established as the first brand of beef– USDA/CBGA Certified Program

• Subsidiary of the American Angus Association• Non-profit Licensing & Marketing Organization• 865 million lbs in annual global brand sales

– 7 consecutive years of record sales• More than 16,000 licensed partners in 44

countries– Product being sold into 76 countries

Certified Angus Beef LLC

Pounds Sold by Business Type

FY-2013*Tonnage not assigned to a specific

division

46% 32%

13%9%

RetailFoodserviceInternationalMisc*

Key Discussions

• What are we seeing among consumers?

• What signals are we receiving?• What are we doing and what else

needs to be done?

Consumer spending decisions are based on a

Price:Valuerelationship.

When Making Purchase Choices

Taste Is Still King

How important is each of the following characteristics when choosing whether to

have beef, chicken, fish, pork or other main dish alternatives for dinner at home?

7

Consumer Beef Index, May, 2007 to July 2013Extremely/Very Important

At Home May

‘07 Jul ‘08

Jul ‘09

Jul ‘10

Jul ‘11

Jul ‘12

Feb ‘13

Jul ‘13

Extremely/Very Important Great tasting 86% 88% 90% 86% 87% 87% 91% 86% Good value for the money 76% 77% 80% 78% 83% 81% 82% 83% Extremely safe to eat 81% 79% 80% 77% 79% 79% 86% 83% Good results consistently N/A 74% 77% 73% 73% 76% 78% 78% Balance of taste/nutrition 67% 72% 74% 70% 76% 72% 78% 75% Feel good about eating 68% 73% 75% 69% 75% 74% 72% 74% Know how to prepare well 67% 70% 71% 68% 73% 70% 73% 74% Always tender N/A 68% 71% 62% 67% 69% 66% 68% Smart choice 65% 63% 64% 64% 65% 69% 68% 68% Great source of protein 57% 62% 64% 60% 65% 65% 70% 67% Provides energy and fuel 67% 66% 69% 63% 71% 66% 71% 67% Quick and easy to prepare N/A 66% 69% 63% 67% 62% 69% 67% Great starting point for meals N/A 67% 67% 62% 68% 64% 67% 65% Food you crave 56% 61% 68% 65% 63% 64% 68% 64% Easy to pick the right cuts 60% 64% 63% 63% 59% 62% 64% 63% Can be eaten every day 56% 61% 62% 50% 57% 55% 60% 61% Not contribute to heart problems N/A N/A 61% 59% 63% 63% 61% 61% Excellent nutrients N/A 62% 59% 60% 60% 61% 65% 59% Many lean cuts available N/A 60% 59% 57% 62% 61% 62% 58% Fits a health-conscious diet 55% 59% 55% 54% 60% 58% 60% 58% Industry acts in consumers’ interest N/A N/A N/A N/A 58% 57% 58% 56% Base: Those Asked (900) (503) (504) (500) (500) (750) (505) (503)

Key: Significant change from July 2012 () or in same season trend

()

How important is each of the following characteristics when choosing whether to

have beef, chicken, fish, pork or other main dish alternatives for dinner at home? Consumer Beef Index, May,

2007 to July 2013

Increasing Role of Extrinsic Quality Cues

Food Safety

Sensory Attributes

Convenience

Grass Fed

Locally Grown

Organic

Humanely Raised

Free Range

Healthiness

Soci

ally

R

esp

onsi

ble

Natural

• Health/Safety• Sensory• Convenience

• Process

The Last Time……..

the consumer took a backseat the

industry experienced two

decades of decreasing beef market share.

Brand Offering

Questions & AssumptionsComments: Is all Certified Angus Beef hormone free? I can only see the NATURAL as hormone free. Thank you.

Comments: Is Certified Angus Beef grass fed? What about hormones, antibiotics, GMOs etc? The stringent rules to be Certified would eliminate them. Correct?

Comments: Maybe I missed it on your website. What do these cows eat? How are they finished? Does CAB automatically mean the cows are grass fed and finished? Thanks for your time

Rising interest in knowing more about

their food has put consumers on a fairly steep learning curve

AND created a dynamic marketing environment with many “experts”.

Credibility is established by communicating both technically and emotionally

relevant information.

Trust is not simply based on what we

say.It is ultimately

based in what the customer

understands & believes.

Proactive Training & Education

The only sustainable flow of dollars from which

to continue to build the beef

industry comes from the

consumer.