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 The logic behind Coles' HGP beef 

The logic behind Coles' HGP beef

14 Mar, 2011 01:00 AM
AUSTRALIAN agriculture has some legitimate issues with Coles, but the beef industry's outrage at the supermarket's stance on HGPs is not one of them.

Consumers would prefer not to buy meat from HGP-treated cattle. Coles has heard that message and made it a point of difference in its marketing.

The demand for HGP-free beef is driven by a sensible consumer suspicion of eating extra hormones. The suspicion of possible harm isn't backed by the science, but that doesn't matter: consumer buying decisions are seldom backed by science.

People pay extra for designer-label clothes, shampoos labelled "organic", tasteless flawless fruit over tasty flawed fruit, and all sorts of art that only has a subjective value. Why should they get scientific about meat?

Coles is far from the first brand to promote HGP-free beef. Coles, however, has applied some good Australian science to marketing its beef: the science that says that if two primal cuts are otherwise equal, the cut from an HGP-treated animal will be usually less tender.

So while Coles has responded to one consumer fear—a fuzzy notion that HGPs aren't good for them—it has put a marketing cherry on top, in the science-backed promise of greater tenderness from HGP-free beef.

Of course, Coles can get HGP-treated beef as tender as equivalent HGP-free cuts through extra aging and MSA grading.

Through the same process, you can get cow beef that eats as well as yearling. You don't often see "Cow Beef Scotch Fillet" on the restaurant menu, though. The word "yearling", like the phrase "HGP-free", sells.

And why should Coles go an extra yard to include HGP-treated beef?

It would involve extra costs. More than half the cattle in Australia are not treated with HGPs. Plenty of suppliers are delighted to work with Coles, apparently a tough client but one who rewards well—and who is paying for any loss of production from not using HGPs.

And consumers are buying more Coles beef: sales are said to be up double-digit percentage points since the supermarket ran up its HGP-free banner.

The beef industry seems to have been spurred to action by Coles's language in announcing its HGP-free move, which put HGPs on the same page as fresh food and animal welfare issues.

This troublesome association would have disappeared into the great PR rubbish pit had not parts of the beef industry, egged on by HGP manufacturers, made a noisy scene over it.

The end result? Coles is seen to be defending the interests of its customers. The beef industry isn't.

And any consumer that hadn't heard of HGPs probably has now, and will be looking for the "HGP-free" label on its next beef purchase.

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Hi Matt, agree wholeheartedly with your comments.
Posted by Nick, 14/03/2011 4:11:35 AM
Shrug: A marketing ploy, is a marketing ploy end of story.

If Coles and their customers are prepared to meet the extra 10% production cost associated with HGP free beef. Then they can have all the HGP free beef they can afford to buy.

Posted by Qlander, 14/03/2011 6:41:13 AM
Wrong end of the stick, Mat.

The fight against HGPs was started in Europe as a protectionist measure against imported beef, including Australian beef.

It artificially created an issue in people's minds, rather than bowing to consumer pressure.

In Australia, there has been no popular sentiment against HGPs until Coles' imported British management has imported the manufactured Euro consumer issue as a means to wedge competition.

Modern agriculture relies on man-made technologies and materials to a good extent: it would not be able to supply enough food otherwise.

HGPs are at the benign end of the scale, and campaigning against them ignores much more threatening technologies, eg, the overuse of antibiotics.

I haven't yet heard that Coles would ban routine antibiotics use - has anyone else?

Posted by morrgo, 14/03/2011 7:16:33 AM
And I agree that they are probably the same consumers that have given the rest of us hard, colourless & tasteless tomatoes, green bananas that rot before they ripen & stonefruit that looks great but is either mushy inside or rock hard & tasteless too.

And other fruit like the "guaranteed sweet" pineapples that don't even taste like a pineapple.

A lot of people seem to be labouring under the misconception that HGP free means grass fed, when Coles sources both grass & grain fed product.

Posted by a GRAZIER, 14/03/2011 8:17:50 AM
Agree with the article. Coles is targeting, marketing and trying to keep customers. It's all dollars and cents. Producers need to do the same thing.

If predictions are right that chicken meat sales will increase 50% over the next decade then i suggest that beef producers need to get cracking.

I'm not taking sides but Wesfarmers (who own Coles) are obviously spending big money on ensuring returns on investments.

Posted by Bombala29, 14/03/2011 2:35:51 PM
The arrorgance of Coles is only exceeded by it's ignorance.
Posted by John Niven, 14/03/2011 3:25:05 PM
Europe, thanks to its subsidies, has had a glut of beef for many years. They don't want more beef. That is the principal reason why they banned HGPs.

Coles' strategy has nothing to do with animal welfare. Worse, it has nothing to do with food production.

Coles' strategy is to make a short term grab for more money for Coles. This can only give a short term lead in the marketplace, so is probably for the purpose of maximising the value of the supermarket chain for sale in the near future.

Like so many fashionably Green policies floating at the moment, Coles' policy will bring a rapid rise in food costs overall.

Posted by Ted O'Brien, 14/03/2011 8:23:52 PM
We are beef producers and do not use HGP's. We eat our own beef (and tenderstretch it) because we don't want to eat hormoned beef.

The chicken industry no longer uses hormones as the consumer didn't want it, time for beef produceers to do the same, as chicken is taking over our market.

Just look at the results of women using hormone replacement for many years - scientific evidence that it can cause, and may have caused, cancer, and consumers don't want to go down that track any more.

Look at the problems with hormones in water ways affecting fertility of the fauna, why would we wish to eat it? I, for one, want to live as long as possible - you are a long time dead.

Posted by Get Real, 15/03/2011 4:40:32 AM
Matt, you're dead right about the HGP manufacturers and their relationship with MLA and key figures in the prescribed industry, its money or the loss of it that is the key issue.

The HGP manufacturers are behind the protest because they stand to loose millions in lost revenue and their mates in Cattle Council don’t want to loose the millions donated by these companies both directly and indirectly; I think it’s a similar situation to the NLIS tag chip where Texas Instruments, the manufacturers of the chip appointed the company owned by the son of the CCA Selection Committee Chairman as its single Australian distributer; in the Cattle industry these things are normal everyday actions (to them), they call it good business, and it’s the same with HGP’s; it’s fear that drives the anti HGP campian…

Posted by The Serf, 15/03/2011 5:20:57 AM
Correct assessment. There was a statement about "no popular sentiment against HGP before Coles".

You miss the point, as do most of those in opposition, it is about eating quality. I would strongly suggest there was popular sentiment against the variability of eating quality of beef, before Coles solved the question, WHY, in consumers minds, HGP.

I am a beef producer and disliked the varaibility when I was paying $40/Kg for steak.

As I produce non HGP I had no reason to look into it but went to an MSA seminar and quickly figured out the problem.

The issue here is that the cattle/MLA councils have long known about this and played the consumer for fools and as one said looked after the Vet chem. suppliers when they should have been looking after our customers.

They should all be sacked for that. They take our money as levies and blow it on lunches and mates ENOUGH get some governace or get out. This is endemic in Ag organisations most are still in the 70s and 80s culture.

Posted by concerned, 15/03/2011 5:50:25 AM
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