Saturday, February 6, 2010

Beef and Beer!

I knew that title would grab your attention. A lot of beer is sold through some very heavy marketing as I'm sure we will see during the Superbowl. The big players in the US are Anheuser- Busch, Miller Brewing and Coors. Samuel Adams takes a chunk of the upscale market and then there are lots and lots of midsized, small and micro- brewers. There is also a large selection of foreign beer companies that also know how to market. The big companies have national distribution and lots of advertising power, midsized companies may have national distribution but not nearly the advertising bucks. The small ones distribute regionally or even within one city and then you have the brew pubs which only sell to their customers directly. Some large companies are now international super giants like the InBev corporation that bought Anheuser- Busch back in 2008. This Belgian-Brazilian company now owns over 200 brands including such polar opposites as Rolling Rock and Spaten Brau. They own brands produced all over Europe, Canada, US, South America, China and Russia. They own Becks and St Pauli Girl, two German icons. For each brand they own they produce numerous types of beer, for example Bud lager, Bud Light, Bud American Ale, Busch, Michelob are all Anheuser Busch brands.

So what does this have to do with Beef? Well the beef industry has some similarities. You have the larger beef processors in the US such as IBP, Excel, Swift, National, and Smithfield beef. Then there are some mid-sized companies such as Creekstone Farms, Greater Omaha Beef and Aurora Angus Beef which are focused on more specialty meats. You have the really small local type meat lockers and then the local farmers who distribute directly. Just as in the beer industry you have giant multinational corporations such as the Brazilian JBS S.A. that own multiple brands that appear to compete with each other. Swift, National and Smithfield are all owned by JBS today and Tyson, the poultry giant , owns IBP's beef production. As with beer, national distribution and advertising are dramatically increased with size. Also each company has multiple brand names under its umbrella. Tyson sells regular IBP brand but then also features Star Ranch Angus, Chairmen's Reserve, Open Prairie Natural Angus branded products. The same for National Beef with ten brands including Vintage Natural, Black Canyon Angus, Certified Hereford and Naturewell Beef. Excel Beef is owned by the food giant Cargill and has Sterling Silver Beef as a brand name.

Another aspect of the beef industry is name brand ultra- quality wagyu or naturally raised beef. This small, very expensive market is like the fine India Pale Ales that I buy, with small label companies craft brewing the beer. Some of these expensive beef items have higher than Prime marbling scores and typically are hitting some high scores on the Japanese rating system. But even these are not exactly what they seem. Take Snake River Farms, a well known wagyu brand; they are actually a brand name of Agri Beef Co. which also owns Double R Ranch Beef, St. Helens Beef and Rancho El Oro Beef. They are a high quality cattle grower and focus on feed, genetics and humane practices but they are not one small ranch or farm. Another is Strube Ranch in Texas. The other day I was checking the label on a box of Strube Wagyu beef and it stated "Elkhorn Valley Packing Co.", Kansas. I am still waiting on a response from Elkhorn which is a small, high quality processor that has its own line of Angus. What I think is happening is Strube is contracting with Elkhorn to process and distribute their Wagyu beef. Niman Ranch is now owned by Chicago Natural Food Holdings which took over two years ago.

Smaller processors are selling ungraded beef either regionally or over the internet. These very small operations might not really have any distribution other than a delivery truck or the UPS man. They typically will sell heritage breed, grass fed or naturally raised without hormones or some other feature that will attract the customer. Even smaller, direct farm distribution is available at many farmers markets all over the US today. Many of these operators are seasonal and by mid-winter meats are typically no longer available in cold weather states.

So what is the point of all of this? I just thought it was an interesting comparison between two of my staples. I guess comparisons could be made for many other products and this wasn't an opinion on quality. Many of these products are very high quality but I find that consumers often have a perception of where their beer and beef are coming from and who controls the company. This week I sampled a steak from Rykowski's Farm and enjoyed a glass of Hurricane Kitty IPA, both produced within 6 miles from my house, I guess next week I'll try some Australian Wagyu and a Czech Pilsner.