beef options at retail

November 14, 2018

Consumers make choices at the meat case every day, and when it comes to beef, choices abound.  One such choice revolves around how cattle are raised, or whether the beef carries a specific production claim1.  While just over 3% of retail beef poundage or 4.5% of dollar sales carry such a claim, farmers and ranchers provide several beef options to fulfill diverse consumer interests.2 

The primary production claims found at retail include: certified organic, naturally raised, grass-fed, and raised without antibiotics and/or hormones. Frequently, offerings carry multiple (or overlapping) claims.  (Production claim definitions, including the definition for conventionally-raised (grain-finished) beef, can be found here).

The good news: As beef supplies have been growing over the past couple of years, 2018 year-to-date dollar sales of all fresh beef at retail have increased 6.2%.  Growing at an 8.1% rate are sales of beef carrying the aforementioned production claims.  This faster growth rate for beef with production claims has been the trend over the past several years as some consumers have more-frequently sought products that further explain how their beef is raised.  Since 2012, overall beef sales have increased by $1.4 billion and 10.4%, or $146.4 million, of this growth has come from beef with a production claim.  Grass-fed beef accounts for 43% of the sales growth over this time-span, however naturally raised remains most prominent amongst production claims, at 42% of the total.3

Charts 1 & 2 show the quarterly trends over time in dollar and pound sales for each claim along with production claims’ share of total retail beef sales.  Since 2012, the production claim share of total beef sales has grown from 2.9% to 4.5% whereas the share of pounds has increased from 1.9% to 3.1%.  Grass-fed grew fastest from 2014-2015, naturally raised growth has somewhat leveled off, whereas beef raised without hormones or with an organic claim has shown steadier growth over time.4

When delving into production claim sales by category, interesting differences from total beef sales emerge.  The two most prominent differences are around ground vs. whole-muscle sales and the type of whole-muscle sales.  Specifically, for all beef sold at retail, about half of pound sales are ground beef.  For the various production claims, the ground beef pound share jumps to about three-quarters for naturally raised, grass fed and no hormones and/or antibiotics.  For organic, the ground beef share of total pounds exceeds 85%.  A narrower assortment of whole-muscle cuts with production claims is sold and this cut selection is dominated by middle meats, particularly for organic and grass-fed claims.5

Due to higher production costs for raising Beef with these claims as well as increased processing costs for segregating the smaller volumes, retail prices are significantly higher (Chart 3).  Price premiums generally range from 40-60% for these products and are seasonally higher in the 4th and 1st quarters for claims either exclusively or including a large share of grass-fed production.6

The availability of beef with a variety of production claims enables consumers to have even more choices when they visit the retail meat case.  While conventionally-raised beef still accounts for over 95% of retail beef dollar sales, a small subset of consumers prefer beef from cattle raised via other production methods. The sales trend for all beef is higher, as – with or without a claim – farmers and ranchers continue to produce more of the beef today’s consumers demand.

  1. Excluding religious and breed claims or quality grade
  2. IRI/Freshlook, Total US MULO ending 9/30/18; Categorized by VMMeat System
  3. ibid
  4. ibid
  5. Ibid
  6. ibid
  7. ibid