- A new study out of Arizona State University found that beef eaters who are unfamiliar with the U.S. Department of Agriculture's definition of "natural" were willing to pay $1.26 more per pound for meat with that label, while those who knew the definition would not pay a higher price for that attribute alone, according to Meat & Poultry. The study involved an online survey of 663 consumers. Half were given the definition of "natural" as it pertains to beef and half were not.
- Researchers also found that shoppers who were familiar with the definition of "natural" were willing to pay $2.93 more per pound for steak labeled "natural and no growth hormones," and $3.80 more per pound for steak described as "natural and grass-fed."
- “Labeling food with claims that are not clearly defined can be costly for consumers and hold disadvantages for food manufacturers or producers who don’t use such claims,” Carola Grebitus, assistant professor of food industry management at Arizona State University, told Meat & Poultry.
Consumer hunger for natural foods is at an all-time high, but that doesn't mean shoppers have a clear understanding of what the term entails. For consumers unaware of the USDA's definition of "natural" — the Food and Drug Administration has yet to define the term — the term carries a strong and attractive health halo. Recent research found that most consumers assume that "natural" foods are grown or raised in a traditional way, and are free from artificial additives and preservatives.
The actual definition is less overreaching. According to USDA, "natural" products have no artificial ingredients or added colors and are minimally processed — meaning in a manner that does not fundamentally alter it. Labels on these products need to explain the meaning of the term "natural," like "no artificial ingredients."
While it seems that using the term '"natural" would be a fairly easy way for beef producers to bolster their profits, the benefits of more specific terms shouldn't be ignored.
Antibiotic-free claims have been especially impactful in the poultry industry. Protein giants like Tyson, Perdue and Pilgrim's Pride have pledged to phase antibiotics out of their birds. While these products are generally more expensive to raise, they can be sold for 20% more than traditional protein. These claims are getting more prominent in beef products as well, though "grass-fed" is arguably the most hot-button issue for health-conscious buyers.
And while grass-fed beef still accounts for less than 1% of U.S. consumption, it has significant potential for protein producers. Retail sales of fresh grass-fed beef have increased from just $17 million in 2012 to $272 million in 2016, posing a lucrative opportunity for beef companies.
There are some obstacle on the road to becoming a mainstream production practice. First, there is a consumer perception that grass-fed beef doesn’t taste as good as grain fed. Second, it’s much more expensive —grass-fed beef commands an average 71% premium, according to Nielsen data. And third, millions of acres of land would need to be accessed to support the grazing needs of cows if this were to become a sustainable model.
Still, the practice could eventually scale up. According to a report from the Stone Barns Center for Food and Agriculture in New York, there is enough land in the U.S. to support the development of this industry. But it would require a conversion of the 17.6 million acres of land currently used to grow grain for cows raised for beef, as well as grasslands and space used in USDA conservation programs.
Until the price of grass-fed beef is brought down a bit, it's unlikely that this production method will catch fire. But there is still money to be made for beef producers that adopt this practice. One need only look at the organic market to see that what is viewed as expensive and unnecessary one decade could become a hot commodity in the next.