Established Icon Grows Like a Startup

Certified Angus Beef® brand posts 17.2% sales increase.

by Steve Suther

Start-up companies often report double-digit sales growth, but 32-year-old iconic brands without new-product launches or acquisitions? Not so much. Yet Certified Angus Beef LLC (CAB) recently closed the books on fiscal year 2010 with 17.2% growth.

Also going against the conventional wisdom that premium brands struggle during a recession, the Certified Angus Beef ® (CAB®) brand provided assurance of consistent value for dollars spent and grew its business across all sectors in a fourth consecutive year of record gains.

Product sales from Oct. 1, 2009, to Sept. 30, 2010, topped 777 million pounds (lb.), shattering last year's mark by 114 million lb. "That's more than our total sales for this company's first 10 years combined, thanks to the commitment of nearly 14,000 licensees worldwide," said CAB President John Stika.

Growth was balanced. Sales of the high-value middle meats such as strip steaks and tenderloins were up 16%, with end meats up 16.1% and grinds up 24.3%. That boost in steak sales helped lead resurgence among foodservice partners. They enjoyed a 10.8% rebound from last year overall with divisional sales of 223 million lb. Retail continued to lead all divisions with 52% of sales, those 404 million lb. representing 17.3% growth compared to 2009. New business figured in, but same-store sales were up 10%.

Licensed partners outside the United States saw nearly 15% greater sales at more than 80 million lb., a nearly full recovery at last from the disruptions of 2003, when doors were closed to many international markets.

The value-added products division record sales of 16 million lb. were up 10%, led by deli items such as corned beef and pastrami, up 34%, while more recently branded products like meatballs and meatloaf grew by 51%.

Sales of the CAB brand's Prime and Natural extensions were up a combined 7.4%.

Upward trends were also noted on the supply side, where 64% of U.S. cattle were Angus-influenced. Nearly 15 million head were identified, while those certified rose to 3.5 million — a 24% increase over the previous year. A 23% acceptance rate pushed a five-year trend of increases to new levels, proving that quality-minded ranchers are setting the bar higher and meeting it.

"Our response to record growth is to push ourselves, our partners and our consumer advertising to pull more of this proven product through," Stika said. "That will create more demand and drive more value for the Angus cattlemen who own the brand."

The CAB brand is a cut above USDA Prime, Choice and Select with 10 quality standards setting it apart. It has offered consumers quality, consistency and integrity since the first pound was sold in 1978. As customers of licensed partners in the United States and 46 other countries have discovered, "There's Angus. And then there's the Certified Angus Beef brand."

For more information on the ranch side, visit www.cabpartners.com; on the consumer and beef marketing side, www.certifiedangusbeef.com or follow the brand on Facebook and Twitter.

[Click here to go to the top of the page.]