Consumers:Consumers:Their Beef Their Beef

ExpectationsExpectations

A Presentation byA Presentation by

Nancy KruseNancy Kruse

The Kruse CompanyThe Kruse Company

Beef ExpectationsBeef ExpectationsSession AgendaSession Agenda

Changing ConsumersChanging Consumers Implications to BeefImplications to Beef

Dietary TrendsDietary Trends Implications to BeefImplications to Beef

Value ExpectationsValue Expectations Implications to BeefImplications to Beef

Changing Consumers:Changing Consumers:We’re Getting OlderWe’re Getting Older

Population Change, 2000-2010Population Change, 2000-2010

(In Millions)(In Millions)

Age GroupAge Group Population Gain (Loss)Population Gain (Loss)

Under 18Under 18 +1.7+1.7

18-2418-24 +3.6+3.6

25-3425-34 +1.4+1.4

35-4935-49 (3.1)(3.1)

50-6550-65 +16.1> +16.1>Total gain ofTotal gain of

65+65+ +4.3> +4.3> 20.4 MM20.4 MM

Source: Census BureauSource: Census Bureau

Changing Consumers:Changing Consumers:We’re More DiverseWe’re More Diverse

Ethnic Population Will GrowEthnic Population Will Grow

By 31 Million by 2010By 31 Million by 2010

% Population% Population

GroupGroup 20002000 20102010

WhiteWhite 74% 74% 67% 67%

BlackBlack 12 12 13 13

HispanicHispanic 10 10 14 14

Other*Other* 4 4 6 6

*Asian, Native American, Pacific Islander*Asian, Native American, Pacific Islander

Source: Census BureauSource: Census Bureau

Hispanics RepresentHispanics Represent13% of US Population13% of US Population

hispanicshispanics

Changing Consumers:Changing Consumers:Mom’s on the JobMom’s on the Job

Married Women in WorkforceMarried Women in Workforce With Kids 6-17 Years OldWith Kids 6-17 Years Old

YearYear PercentPercent19601960 39% 39%1980 1980 62 62

20002000 77 77

Source: Bureau of Labor StatisticsSource: Bureau of Labor Statistics

Changing Consumers:Changing Consumers:Culinary EducationCulinary Education

600+ culinary schools600+ culinary schools 15,000+ enrolled15,000+ enrolled CIA, J&W graduate 3,000+/yearCIA, J&W graduate 3,000+/year

Source: American Culinary FederationSource: American Culinary Federation

Chefs Everywhere:Chefs Everywhere:They’re Media StarsThey’re Media Stars

Changing Consumers:Changing Consumers:Media BombardmentMedia Bombardment

TV Food NetworkTV Food Network Emeril in 50MM households/dayEmeril in 50MM households/day

Cookbook salesCookbook sales 10% of publishing sales10% of publishing sales

Food websites Food websites 8MM food sites=3.9MM recipe pages*8MM food sites=3.9MM recipe pages*

Food radio Food radio 100 shows, some national100 shows, some national

Print mediaPrint media Consumer and trade magazinesConsumer and trade magazines

*Note: 2000 data. Source: Foodservice Innovation Network*Note: 2000 data. Source: Foodservice Innovation Network

Changing Consumers:Changing Consumers:Implications to BeefImplications to Beef

CONSUMER TRENDSCONSUMER TRENDS Aging populationAging population

Ethnic diversityEthnic diversity

Working womenWorking women

Culinary educationCulinary education

Food mediaFood media

IMPLICATIONS TO BEEFIMPLICATIONS TO BEEF Palate appealPalate appeal Health concernsHealth concerns

Fully flavored foodsFully flavored foods Menu mainstreamingMenu mainstreaming

Convenience demandConvenience demand Dual income householdsDual income households

Tools and techniquesTools and techniques Entire food chainEntire food chain

Rising expectationsRising expectations Open attitudesOpen attitudes

Obesity BecomesObesity BecomesNational EpidemicNational Epidemic

Super-Sized ConsumersSuper-Sized Consumers 61% of population overweight61% of population overweight

14% of kids 6-1914% of kids 6-19 20% of population obese20% of population obese

300,000 children have Type 2 Diabetes300,000 children have Type 2 Diabetes 37 states have obesity rates >15%37 states have obesity rates >15%

Source: The Wall Street Journal; italics mineSource: The Wall Street Journal; italics mine

““Short Orders” WillShort Orders” WillAddress Micro-DietsAddress Micro-Diets

Fads and trends will multiplyFads and trends will multiply Low carbohydrateLow carbohydrate Fat/calorie restrictedFat/calorie restricted Allergy freeAllergy free Vegetarian/veganVegetarian/vegan

Combat aging processCombat aging process Pharmifoods and nutriceuticalsPharmifoods and nutriceuticals

Food scares, media stories will impactFood scares, media stories will impact May impact consumptionMay impact consumption May increase demand for organic, all-natural, etc.May increase demand for organic, all-natural, etc.

Chipotle Grill’s Chipotle Grill’s Salads and ProteinsSalads and Proteins

Dietary Trends:Dietary Trends:Implications to BeefImplications to Beef

Remain proactiveRemain proactive Promote benefitsPromote benefits Underscore choiceUnderscore choice Beware charlatans Beware charlatans

Value Equation Value Equation More ComplexMore Complex

Then…Then…V=Q/PV=Q/P

Now…Now… V=(Q/P) x TV=(Q/P) x T²² x F x O x CI x F x O x CI

V=value, Q=quality, P=price, T=time savings/convenience,V=value, Q=quality, P=price, T=time savings/convenience,F=flavor, O=other personal values, CI=culinary influenceF=flavor, O=other personal values, CI=culinary influence

Source: Yankelovich; The Kruse CompanySource: Yankelovich; The Kruse Company

Value Expectations:Value Expectations:Implications to BeefImplications to Beef

STRESS FLEXIBILITY, STRESS FLEXIBILITY, MONITOR CHANGESMONITOR CHANGES

QualityQuality PricePrice ConvenienceConvenience Flavor/ethnicFlavor/ethnic Other valuesOther values Culinary influenceCulinary influence

Picture: Bon Appetit Magazine, Jan. ‘04Picture: Bon Appetit Magazine, Jan. ‘04