Tracy Rehberg

The Chicken Challenge
One of the longest and most hard-fought races in the past quarter century has been, and will continue to be, the pursuit of market share by beef and its two-legged competitor, chicken. It hasn’t always been an even race. Beef was the undisputed leader for decades. During the1970s, Americans consumed an average of 86 pounds of beef per person each year while chicken consumption trailed by more than half.

During the 1980s, chicken gained significant ground due to factors such as the infamous 1977 red meat warning that caused public concern about beef consumption (a side effect of our government’s rush to construct one of its grandest special interest group arenas – the food pyramid). Chicken also gained as a result of a decade-long economic recession that slowed per capita income levels and beef purchasing power. Perhaps the single greatest contribution to chicken’s 1980s boost, however, was when the food company soon-to-be-legend in value-added chicken really got it right.

In 1983, Tyson Foods invented the McDonald’s Chicken McNugget and revolutionized chicken as a major convenience food. By that time, Tyson had already streamlined chicken production and processing to an alarmingly calculated science. It revolutionized frozen chicken products and packaging, including its own nuggets, and paved the way for case-ready chicken. By the early ‘90s, chicken and beef consumption were neck-and-neck. In 1999, the meats changed leads and beef would begin to find itself in the dust. In 2003, Americans consumed 64.9 pounds of beef as compared to 82 pounds of its coop-dwelling rival. The USDA projects beef and chicken sales volume will rise over the next 15 years with the competitive gap widening slightly in chicken’s favor.

Certainly, the beef industry has not been idle. Checkoff-funded research, product development, marketing promotion and education initiatives continue to forcefully drive sales and even net beef the U.S. meat industry’s highest advertising awareness and retention rates. Packaging is better. Product is better. Choices are greater. Beef is still the undisputed, away-from-home dining champion and is expected to retain the title. In fact, full-service restaurants represent close to half of beef’s total sales volume. Beef is also No.1 in the fresh meat case. In 2002, fresh beef’s market share at retail was 44 percent as compared to chicken’s 28-percent share. With the fresh meat and dine-out scales tipped in our favor, it’s tough to envision chicken’s steady march ahead.

So how exactly is the bird winning? There are several reasons. First, chicken will probably always have a feather in its cap when it comes to the price game. Second, chicken is often perceived as healthier than red meat, although our industry has moved mountains to debunk this assumption. But, perhaps the most significant cause of chicken’s surge ahead is its ability to shape convenience. Try as it might, beef has yet to find a worthy challenger for chicken nugget and chicken tender sales to youth, which continue to enjoy extraordinary growth. Recently introduced cheeseburger fries haven’t taken hold and steak nuggets will forever be chicken nuggets’ ugly stepsister.

Chicken beats beef on restaurant appetizer menus, too, as beef is typically perceived as a heavier, more entrée-appropriate item. In fact, as a pre-course offering, chicken is three times more common than other meats. Chicken has also thrived as a salad companion while beef’s heaviness and color have not.

When it comes to family mealtime solutions, ready-to-eat supermarket fried and rotisserie chicken is tough to beat (I’m a guilty consumer), and chicken’s heat-and-serve products continue to outsell beef’s by approximately 2-to-1. The beef industry is pushing hard for acceptance of meal-ready supermarket deli solutions such as carved roast. Beef has also never been more dedicated to the development of new value-added and pre-cooked products with 600 launched in 2004, up from an already impressive 515 in 2003 and 475 in 2002.

In many ways, beef simply lacks some of chicken’s most prized attributes. As a convenience or snack food, beef just won’t behave in the same as chicken. Grind chicken into a pulp, mold it this way and that, and its flavor and consistency respond favorably and uniformly when cooked and re-heated. Beef by nature becomes chewy and unappetizing and, to American consumers, inconsistency is never acceptable. On the other hand, why imitate? Lots of meats taste like chicken, but research has shown that beef is chosen for its distinctive taste. Consequently, our ability to compete in the snack food arena probably will not involve beef’s own successful emulation of battered and fried-from-pulp products.

What will our ability to compete depend on? Well, (even though cattle producers and feeders get as excited about new beef-product development as they do picking upholstery fabrics) we must, for starters, set our sights on a few endearing appetizer and snack food selections that are uniquely beef. Our industry and its food partners are racing to promote lots of new product ideas such as country fried steak tenders, pot roast bites, cornbreaded beef barbeque bites, Reuben bites, Philly cheesesteak bites, tamales and the like.

New beef cuts like the ranch cut, petite tender and flat-iron have given our consumers more of the beef they like best – steak. I’d like to see a lot more restaurants serving these cuts on their kids’ menu. Most restaurants that do are glad they did. Since the youth market will be our future beef purchasers, we’d all benefit from giving children more opportunities to develop a love of steak.

We must also capitalize on present and future mealtime trends better than chicken can. The demand for heat-n-serve meals has increased dramatically in recent years and will continue to climb as families remain time-pressed. As demand increases, so must the caliber of pre-cooked, frozen and value-added meats. Beef has taken some smart steps. Upon considering that beef is almost always served as an entrée with side dishes, several precooked beef products now include sides such as vegetables, pasta or rice.

The USDA speculates that over the next 20 years, demographic changes will become much more pronounced and have an impact on the American appetite. By 2020, the U.S. population will add at least 50 million new food customers and boost food spending by $208 billion per year. How that money will be spent toward meat entrées is an important area of speculation. Per capita income levels are projected to grow at reasonable levels; however, the population will change dramatically in age and ethnicity. America’s aging population is expected to dine-out less and increase at-home food expenditure by 2 percent. At present, beef is losing sales to chicken in the at-home category. America’s growing Hispanic, African American and Asian population are likely to increase beef demand, but will further improve demand for chicken and pork.

Last week, I noticed a pre-cooked pork entrée in the meat section targeted toward Hispanic consumers. It was sliced pork labeled for use in Mexican-style dishes. This is among the first of many products intended to capture a more ethnically diverse share of the meal market. The USDA has stated that now, more than ever, innovation by food companies will be key to their growth and profitability. We are fortunate the niche product champ, Tyson, who gave chicken new legs decades ago, now races for beef. We’re also prosperous to sport a checkoff-funded research and development team that is more determined than ever to overcome the chicken challenge. view about the proposed construction of a manure-burning ethanol plant, Mayor Josserand was interviewed standing in front of a large pile of “fuel” at Hereford Feed Yards, Inc.

When the interview was finished, the reporter stepped away and asked one more question.

“Do you keep these cows here for any other reason than to produce manure?”

Mayor Josserand said that a light bulb went on over the reporter’s head when he asked, “Do you ever eat steak?”

Turned out that the reporter liked to eat steak.