At a time when the US beef market is struggling with declining volumes and consumers are starting to care increasingly about ethics, sustainability, animal welfare and nutrition, differentiation offers a way forward for beef producers. The emergence of grass-fed beef is a clear manifestation of this trend. However, before grass-fed has any chance of becoming a mainstream choice, several hurdles need to be overcome. Sourcing is one of them, as illustrated by the current supply troubles experienced by rapidly growing fast food chain Chipotle Mexican Grill.
Chipotle Leads the Way
Chipotle Mexican Grill has been in the news again this spring, not only for defending its drive to exclusively offer grass-fed beef in all of its restaurants but also for deciding to source this product from the distant shores of Australia. According to Chipotle founder Steve Ells, due to the number of its outlets having mushroomed from 800 back in 2008 to the current 1,600, domestic supplies were no longer sufficient.
In line with the company’s much publicised “food with integrity” philosophy, it is committed to serving “responsibly raised” beef, free from hormones and antibiotics and raised with high animal welfare standards. And the strategy seems to be working so far. Our consumer foodservice data show that Chipotle’s sales rose from US$1.3 billion in 2008 to US$3.2 billion in 2013, enabling it to jump from 35th to 17th in the chained consumer foodservice rankings over that period. However, by sourcing its beef from abroad, it may be committing a serious faux pas, a point which we shall return to shortly.
The Merits of Grass-Fed
So, what is the deal with grass-fed versus grain-fed cattle? Fundamentally, cattle are ruminants, which means that their digestive tracts are designed to process grass and little else besides. Like any creature fed on the wrong diet, cattle do not do well when given grain, as is customary on US feedlots during the “finishing” or “fattening” phase. As a result, the animals are prone to developing a variety of health problems, frequently requiring the administration of veterinary drugs, including antibiotics.
Therefore, it is much easier to avoid antibiotics in grass-fed cattle than in conventionally-raised animals. Moreover, cattle fed on pasture rather than in a feedlot harbour lower levels of pathogenic bacteria, including Campylobacter and E coli. These latter two points in favour of grass-fed beef are very positively received by consumers, who are growing increasingly suspicious of veterinary drug residues and pathogenic bacteria in their food supply. In addition, pasture-centred beef production is also seen as scoring much more highly in sustainability terms.
In nutritional terms, the major difference pertains to the meat’s fatty acid profile. Grass-fed cattle tends to be leaner and with a higher content of (polyunsaturated) omega-3, while the meat of grain-finished contains more saturated and mono-unsaturated fat.
Grass-fed beef is also higher in CLA (conjugated linoleic acid), which appears, according to some research, to confer a range of health benefits to humans, including in weight and diabetes management, the prevention of cancer, bone and cardiovascular disease, as well as immune system disorders. Some pieces of research show that grass-fed beef is also higher in certain vitamins, minerals and trace elements, although there is little in the way of consistent data.
Labelling Issue Resolved
Which beef can be labelled as grass-fed has been a contentious issue in the past. All cattle spend at least some months of their early life in pasture before being consigned to the feedlot, leaving ample room for ambiguity and, as many have argued, deceptive labelling.
To put an end to the confusion and enable the grass-fed meat category to evolve and grow, in 2007 USDA approved a standard for grass-fed meat. This requires the animals to have continuous access to pasture, as well as prohibiting any grain-based feed throughout their lives. The USDA standard, however, was not considered strict enough for some.
The chief criticism was based on the fact that it permitted the animals to feed on “immature grain”, which cattle might come across during natural foraging activities. This was seen as a potential loophole by some stakeholders. In response, the American Grassfed Association (AGA) introduced its own set of standards in 2009.
The situation is akin to several organic labels co-existing in the US market (as in other markets), with USDA certification based on the lowest common denominator. However, there can be no doubt that USDA having officially recognised and ratified grass-fed meat has been hugely beneficial for this product. In a day and age when US beef consumption is plummeting – our fresh food data show that volume sales declined by 12% over the 2008-2013 review period – diversification affords innovative players the opportunity to increase their revenues through this type of premiumisation.
Grass-Fed to Go Mainstream? Probably not
Chipotle founder Steve Ells has verbalised his hope that US producers will eventually shift away from feedlot-based to grass-fed meat production, allowing grass-fed beef to transition from a niche to a mainstream product. Although this may be feasible to some degree, grass-fed is unlikely to surpass conventional beef in the foreseeable future, and certainly not while corn (maize) remains one of US agriculture’s most heavily subsidised crops.
In fact, seeing as the provision of “food with integrity” is the key differentiation factor between Chipotle and its rival fast food players, the chain actually benefits from grass-fed beef not going mass-market.
Chipotle’s primary problem right now is its apparent inability to source its beef nationally. The type of customer it seeks to attract with its integrity-based philosophy is also highly likely to care about local (or at least national) sourcing. Among this target consumer group, the shipping-in of tonnes of beef from far-flung corners of the world is generally frowned upon.
Contrary to Chipotle’s assurances that domestic production was unable to meet its demand for grass-fed beef, numerous US-based farmers raising this type of cattle have stated on public forums that they had not, in fact, ever been approached by Chipotle. This would indicate that the issue is probably about price, rather than availability per se. Chipotle will need to work with US beef farmers to establish a domestic supply chain because, in the long term, relying on foreign supplies will grate against the ethical values it purports to stand for.
The Taste Hurdle
There is another issue worth mentioning which stands in the way of grass-fed beef attaining mass-market popularity. And it has nothing to do with economic, ethical, environmental or nutritional considerations. Grass-fed continues to perform poorly in taste tests.
For example, in February 2014, the Journal of Dairy Science published a study which compared three types of beef - conventional, organic and grass-fed organic. The latter emerged as the “least liked” by consumers in taste tests. If shoppers are prepared to pay extra for grass-fed, then the organoleptic experience really needs to match their expectations of a premium product.
This issue is not exactly a minor one and needs to be addressed as soon as possible. What may be needed perhaps, if grass-fed beef is ever to garner a mainstream following, is a firm focus on specific breeds which manage to achieve a pleasant flavour and texture profile when pasture-reared.