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A bad economy, trends toward healthy eating—it all combines to spell trouble for the beef industry. Beef often goes in and out of style, from a healthy must-have to a heart clogging cholesterol producer. The National Cancer Institute just issued a new study saying that red meat shortens life spans. And the economy is forcing many consumers to eat out less and conserve on their luxury spending at the grocery store.

The beef industry mostly depends on the restaurant business, which accounts for half its sales. Consumers have not been eating out, and if they do, they are not splurging on steaks. Now, the beef industry is making innovative strides to make beef seem like less of a luxury.

There are many pieces of meat on a cow, but some are less desirable because of their toughness or muscle fibers. Recent advances in cutting technology have made more cuts palatable though. Grocery stores stock more of these cuts at the lower prices than the premium cuts. For example, “flap meat” is being packaged as “Cordelico Sirloin,” and the “ball tip” is being packaged as “Cabrosa Steak.” In addition, in-store and online education programs attempt to teach customers how to cook and prepare these different cuts of meats, even revealing how to cut streaks for tender roast or cut beef kabobs from a sirloin steak.

The beef industry now offers approximately $60 million coupons, each valued at $1, to be used on any beef purchase—six times the amount of coupons given out last year. The “Bargain Beef Bundles” program allows customers to purchase large quantities of beef to store in their freezers. The industry also is recommending that retailers put beef on sale to turn inventory quicker.

Even if the industry sells these less premium cuts of meat for a lower price, it still earns more than it would by turning the meat into hamburger, which fetches an even lower price. By making beef and steaks more accessible to customers, beef’s market share should improve.

Discussion Questions:

  1. What is the beef industry doing to reposition itself?
  1. What other parts of the marketing mix is the industry utilizing?

Lauren Etter, “Beef Industry Fights for Room at the Table,” The Wall Street Journal, March 26, 2009.