Beef industry resists customers' demands for change in how cattle are raised

Earls provoked the ire of ranchers when it took Canadian beef off its menuthis spring, but after Earls reversedits decision, farmers directed their scorn toward A&W.

Four years ago, thefast food burger chain that first opened on Portage Avenue in Winnipeg in 1956, began serving beef from cows raised without the use of hormones or steroids.

It doesn't matter if science is on your side if everyone has already made up their minds.- Sam Heath, Tim Hortons

The move still frustrates farmerslikeTerry Hepper, who raises cattle25 kilometres northeast of Regina.

"They're so-called no antibiotic, take it or leave it."

Ranchers say science proves it's necessary to add hormones and antibiotics, but increasingly, restaurants argue their customers are demanding those substances not be used.

• Beef prices expected to keep falling, slowly
• Anti-beef sentiment is growing, according to industry researcher

What really pains farmersis that A&W's strategy is an overwhelming financial success for the chain, and other food companies are taking note.

"A&W made a big bet on beef raised without hormones or steroids.It's working very well for them," saidSam Heath, a vice-president of marketing for Tim Hortons."They are one of the fastest growing QSRs [quick service restaurants] in Canada. They are opening restaurants at a very, very rapid pace. They are big in Western Canada, but they are opening a restaurant every couple of weeks in Toronto."

Serving distinctivebeef

In the case of Earls, the Vancouver-based company begansourcing its beef a few months agofrom an Americanranchaccredited by the non-profit group Humane Farm Animal Care. While Earls reversed its "dumb decision" after sales plunged, the company still wants to offer something other than ordinary Canadian beef. It insistscustomers still want third-party animal welfare verification,but that can be found in Canada instead of south of the border.

McDonald's Canada spent the last two years working with ranchers to develop a sustainable beef program that includes animal welfare and environmental standards.

Tim Hortons is the latest company to contemplate offering a special type of beef. In front of more than 500 ranchers at a beef conference in Calgary this week, the company warned it will give customers what they want.

"If it turns out that hormone free is the No. 1 thing in consumers' minds, you are probably trying to stop the tide by telling them, 'No, no, everything's fine,'" said Heath to the crowd. "It doesn't matter if science is on your side if everyone has already made up their minds."

Ranchers weren't impressed, but Heathurged the industry not to become a company like Kodak and fall behind shifting consumer behaviour.

"The industry is littered with people that thought they could control where the world was going," he said.

Does science matter?

Promoting beef that is free of hormones, antibiotics and steroids is a major concern for the beef industry, which is losing market share in Canada in retail meat sales. Ranchers use these substances to increase the size of the animals, reduce the amount of feed required and help animal welfare by fighting off diseases, among other reasons. Without them, the industry fears production will decline and beef will become a luxury item only affordable for the wealthy.

"You don't want beef to become lamb," said Cameron Bruett with JBS, the world's largest meat processor and owner ofone of Canada's two beef packing plants."I'm a bit concerned that the current trend will lead to less productive systemsthat are more environmentally intense and [do] not allow us to meet our long-term outcomes."

We need marketing that does not reinforce consumer distrust or misconceptions.- Cameron Bruett, JBS

One of those outcomes is to supply protein to anincreasing global population. Technology has dramatically improved production and efficiency in raising cattle over the last several decades. If the industry is forced to stop using some of that technology, some of those gains will also be lost.

Beef producers aren't the only ones facing consumer demands for change. Egg farmers across the country have moved away from small cages to confine their hens. Providing more space will lead to higher costs, but the farmers admit the change is better for the birds. Beef producers, on the other hand, don't regard any of their current practices as harmfulto their cattle.

Asproducersbecome increasingly aware they are losing consumer trust,the conference in Calgary this week was largely focused on improving the beef industry'smarketing efforts, instead of changing its practices or how it operates.

Food distribution expertSylvainCharleboisat Dalhousie University hasargued the beef industry should stop arguing with retailers and spend more time trying to meet consumer demands.

Marketing beef

Bruettbrushesoff A&W's success because it's only one restaurant chain,but he does admit some concern about what effect the restaurant's anti-hormone marketing is having on consumer perceptions and whether other restaurants will follow suit.

To him, science does matter.

"We need marketing that does not reinforce consumer distrust or misconceptions," he said in an interview withCBC News. "We as an agricultural industry needto think about how we are communicating with consumers and not just let consumer perception drive the entire debate."

His fear is other restaurants will follow in A&W's footsteps.

Tim Hortonscould be next.

The company will spend the next few months researching what type of beef its customers want. It's possible the nearly 4,000 TimHortonslocations in Canada could serve up hormone-free beef in the future.

"We don't have the research yet to understand just how important this is to guests. We know it is a big issue, so we want to do the right thing," said Heath.

Heath adds that he hopes science and consumer perceptions align, but he won't pre-judge the researchresults.

• Earls asks ranchers for forgiveness for 'dumb decision'