Vet meets retailer

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Editor’s note: First in a two-part series

For most food animal veterinarians and grocery retailers, the only interaction they have with each other is perhaps a smile and nod when they see each other in the grocery store. What lies beneath their friendly exteriors, however, is a wealth of untapped information that can be shared both about consumers and about food animal production that can help each side further their goals -- providing safe wholesome food for consumers.

In early 2006 at the National Grocer’s Association (N.G.A.) annual meeting in Las Vegas, four food animal veterinarians came together with four representatives of the grocery retail industry (see box). This wasn’t your typical Las Vegas matchup -- no one came to fight -- they came to learn from each other and start a dialogue where there had not been one before.

The goal was to bring four food animal veterinarians -- representing dairy, feedlot, cow-calf and swine -- together with retail industry experts to talk about consumer wants, perceptions and fears, as well as to dispel misinformation about food animal production. This article will focus on what retailers and veterinarians believe that consumers are wanting, perceiving and fearing about their food and how it is produced.

 

In a product as emotionally driven as food, consumers are looking for meat and milk they can trust and feel good about.

At the end of the day, the collaboration opened some doors. “We identified several key issues regarding food production, but they were viewed from unique perspectives,” says Brad White, DVM, MS, Kansas State University. “For example, the veterinarians viewed management techniques from a standpoint of animal well-being and improved product value. The retailers viewed many topics from the standpoint of consumer desires and product differentiation. These viewpoints are not mutually exclusive, but rather, an opportunity for communication to allow both sides to more efficiently achieve their goals.”

Consumer wants
Identifying what consumers want is like the $64,000 question. No product is as basic and emotionally driven as food. 

 

Doug Sumpter says to counter negative information about livestock production, the food and retail industry has to have positive information available.

“I think there is some real truth to the fact that there are some very specific things consumers are looking for,” says Mark Wustenberg, DVM, vice president, Dairy Services, Tillamook County Creamery Association, Tillamook, Ore. “In our case with dairy products, it’s availability, taste, consistency and quality -- some very basic things. Once you gain trust on those, then I think some of the secondary attributes such as family-farm-grown, natural or some of those types of things can come into play. But you can’t overcome those first very basic needs or wants the consumer has with those secondary attributes.”

A rise in demand for organic foods is a trend retailers are critically evaluating. “Who is buying organic? We tend to think they are the white, liberal, high-income people,” says Denis Zegar, president of Food For All, Falls Church, Va., a charitable food industry foundation, and a former professor of public policy, George Washington University. “But a survey done by Whole Foods came back and said, ‘We don’t know.’” Zegar notes the most interesting thing they found was there were more people at the $15,000 and below level who wanted to buy organics than those at the $50,000 and above level. “There is no one demographic that is interested in natural or organic food.”

 

   “We use antibiotics in the production system because they are safe,” says Mike Apley, DVM, PhD.

Zegar says that another issue driving organics is that we are a country made up of immigrants, many of whom culturally are very attracted to organics because they come from countries where much of the food was grown locally and organically. “We want to cater to those demographics, particularly to those ethnicities who want that product. Everyone wants the things that they are eating a little healthier. Retailers are broadening their market.”

So what’s the downside to catering to those customers wanting organic or “natural” foods? A potential downgrading in their eyes of conventionally raised product. This concerns Daryl Olsen, DVM, Audubon-Manning Veterinary Clinic and president-elect of the American Association of Swine Veterinarians. “If there is a definite market for organics or niche-market foods, we need to encourage that demand without saying conventionally raised products are bad,” he says. “I’ve seen videos of people who have had organic products, and they are trying to paint the rest of the industry as very bad. I think there’s a real danger of organic products and how we approach it so that traditional production is not seen as sub-standard or poor. We have to get that information out to the consumer and quickly. Then, I see a great opportunity for an increase in product sales in both the niche or organic markets and also in traditional markets.”

Mike Apley, DVM, PhD, Kansas State University, who specializes in feedlot medicine and food animal pharmacology, agrees with Olsen that conventionally raised products can get knocked by niche products. “Some organic producers communicate that not only is theirs (organic) better but that, by default, conventionally produced meat products are harmful,” he says. “My big concern is for people thinking that organic is safer.”

 

Daryl Olsen, DVM, says we need to change the public’s perception of what acceptable agriculture practices are today.

Apley gives the example of a “value proposition.” “We’re all interested in value proposition. Consumers are concerned about the value of their meat purchase, but they are also concerned about risk. One of the biggest things you can do to get a headline in this country is put out a story where someone is benefiting from a business practice and someone else is taking the risk, such as what some of the niche marketers attempt to do. It’s the exploding car example -- the company produced a car cheaper, but the consumer takes the risk from the design.”

Olsen mentions a case in London during the first major BSE scare when no one was buying beef -- until the stores put it at half price. “We’re seeing the same thing in poultry today,” he says. “Poultry prices are as low as they have ever been, and it’s driven by Avian flu concerns. But if you have the right price point, those concerns aren’t there. So, it’s a fickle consumer we are dealing with, and we have to understand that. I think we will see that in the organic side, too. How high are people willing to pay for a product and how much are people willing to try to produce that product when it is an inefficient system?”

“If you are a niche operator, then you want to make that distinction about your product,” adds Zegar. “But the retailer doesn’t have to make that distinction, he just has to provide that value proposition to the consumer and let the consumer make that choice. Ironically though, if you give the consumer alternatives, you could very well broaden your customer base without saying this product is better than that one.”

 

Denis Zegar says the consumer has this mental image of what they think is good for them and what is not good for them.

Much the same as in livestock operations, not every store is the same. “Retailers around the country approach this differently,” explains Doug Sumpter, DPS, Inc., a 37-year veteran of the grocery industry. “Fred Meyer stores, for instance, have truly segregated natural departments so they can keep their crossover consumer. But then you have the people at Safeway, who across their whole store are introducing a private organic label, so you’re going to see retailers experimenting with this in a more strategic way.

“The typical supermarket operator is trying to be all things to everybody, and that’s kind of the Achilles’ heel.” Sumpter continues. And similar to Zegar’s point, “Typically, what we’ve found in the industry is the organic consumer is not necessarily the high-end consumer,” says Sumpter.”

Consumer perceptions
There is a definite chasm between many consumers’ perceptions and what is reality --- something that has been evident for years in consumer media when talking about food animal production.

 

Erik Lieberman believes the food animal industry needs to do a better job from a public-relations standpoint to combat emotional claims.

“What the retailer does is respond to the consumer’s desires and needs,” says Erik Lieberman, director of government affairs for the National Grocers Association. “We’re responding to what consumers want. If the consumer has the notion that antibiotic-free beef is presumed better than standard beef and they are willing to pay for it, that’s how many retailers will respond. That’s their role.”

Where do these perceptions come from? Mostly from the media. Zegar quotes out of the Consumer Reports  “Green Consumers” section: “Unless the meat and dairy products you buy from local supermarkets are labeled organic, you can be fairly certain the animal your food came from was fed an abundance of antibiotics. In fact, more than 70% of the antibiotics in the U.S. are given to farm animals largely to fatten them and make them grow. Why should this concern you?”

White of Kansas State thinks that perception versus reality is an important issue, especially when only one side is doing the talking. “We try to produce the safest, most wholesome food supply in an efficient manner that uses our natural resources to get the biggest output to feed the growing population,” he says. “I don’t think that article addressed any of the production factors. It addressed a perception of what was going on versus a scientific reality.”

Sumpter doesn’t believe retailers have done a good job to prepare for misinformation. “The tendency for the retailer is to overreact.” He cites the example of the low-carb craze. “There was some data that came out and it confirmed in retailer and manufacturers’ minds that this was the new wave, and it was unbelievable what happened in the next 18 months -- due to some misinformation. Not that it was necessarily wrong information,” he adds, “but it wasn’t the whole truth.”

 

Consumers first look for basic attributes such as availability, taste, consistency and quality. After that, secondary attributes, such as “natural” or “family-farm-grown,” come into play.

But when talking about organic issues and countering negative information, Sumpter would like to know what the positive information is.

Olsen agrees that’s a problem. “I think it’s a huge frustration and a huge disconnect with agriculture today. We watch every other business, every other segment and their technological improvements and how they embrace technology. With agriculture today, we want to keep telling the story that every farm is a little rock-walled family farm. We are not allowed to change or advance because that’s not what the public wants to perceive, so we’re supposed to tell a different story so in their minds they are still seeing their livestock com-
ing from this little family farm.”

And as we change, that’s going to be very difficult, Olsen states. “Are we going to deceive the public about where they are getting their product, or are we going to have to change the perception of what is acceptable in production agriculture today?”

Consumer fears
Hand in hand with consumer perceptions are consumer fears, real or perceived. One of the popular examples the media likes to talk about is the perception of antibiotic residues in meat and milk, the use of subtherapeutic antibiotics and hormones.

“We use antibiotics in the production system because they are safe,” says Apley. “It’s not a residue issue. As for the hormone issue, all meat contains natural hormones. No meat is hormone-free.”

Jon Seltzer, vice president of Dakota Worldwide, Minneapolis, Minn., a  consultant in the food, retail and distribution industries, believes a lot of consumers are concerned about the residual antibiotics in the products they are buying. “At the same time, many parents who take their child to the pediatrician get into discussions about multiple vaccinations, questions about how many shots are needed, concerns about allergic reactions, etc.  We need to look at antibiotic use in the production system in the consumers’ terms of their overall health and medicine in general.”

Zegar cites a 2004 Whole Foods survey that asked about antibiotics and meat. Regardless of age, education, income level or region, more than half, 52.3% of those surveyed, were concerned about the presence of antibiotics in meat production when shopping for fresh beef and poultry. When asked what were their top concerns, they said price, flavor, food safety and 74% expressed concern over antibiotics.  “Consumers have this mental image of what they think is good for them and what is not good for them,” says Zegar. “We have to be able to confront the issues from various fronts. It all goes back to this perception and who is going to deliver the message.”

Unfortunately, the message that there is no scientific data to show that using subtherapeutic antibiotics has anything to do with resistance problems doesn’t get out to the general population. “Overuse of antibiotics in children is our greatest concern, but that’s an issue we have to get addressed,” says Olsen. “People want a story. And there’s a story that comes with certain organic or natural products. That’s their drive and why they are choosing the product.”

Judicious and correct use of antibiotics creates a healthier food, adds Olsen. “There is no question it does; the data is there. We just have to get that story to consumers so they understand why we use antibiotics.”

White understands how messages can cause consumer concern. “It can validate their concern when you hear that a company is removing something, such as subtherapeutic antibiotics, from a product. By default, you feel like there is something wrong with the product. We’re seeing the rise in demand for natural or organic products without antibiotics, and companies are responding to the consumer desire, more so than a scientific response. We need to get the positive information out about our food supply and that we use certain products because it produces a healthier, safer food.”

Seltzer brings up a good point about how the livestock and veterinary industries often phrases their scientific points about drug use. “When using the term ‘when used correctly’ in speaking about antibiotic use in animals, that raises doubt in my mind. It means antibiotics can be used incorrectly, and if they are, what happens then?”

It’s foolish to believe that these issues just reside with the grocery shopper when at the store. These issues are making it to the Hill as well, says N.G.A.’s Lieberman. “Critics of the use of antibiotics claim they are used to compensate for improper animal husbandry techniques such as confinement and bad living conditions and feeding of unnatural diets,” says Lieberman. “That type of thing resonates with members of Congress.”

Lieberman believes the food animal industry needs to do a better job from a public-relations standpoint to combat these emotional claims. “Consumers might look to associates in the stores for information, but if The New York Times runs a big article about sub- therapeutic antibiotics or 20/20 does a big story, they are probably going to listen to ABC or The New York Times before they’ll listen to the checkout clerk or the person who is stocking the product.”

When those situations occur, however, Seltzer says it’s incumbent on the retailer to let the frontline employees know when there is a major event or news story. “I think it’s an opportunity for the retailer. That’s the time people are interested in that information.”

Exogenous influences work to create fear in consumers, adds Zegar. “The consumer gets this fear abourt things such as BSE, and whether it’s right or wrong, it is there. It bodes well for us to play up the idea that ours is the safest food source in the world because of the things we do. We’re always going to have mad cow, bird flu, etc., in the world, and it creates fear. So we’re going to have to confront it, and there has to be a continuous, long-term message of the safety of our food supply.”

Next issue: How do we as an industry get our message across?

The participants

  • Brad White, DVM, MS, Kansas State University
  • Mark Wustenberg, DVM, Tillamook Creamery Association
  • Mike Apley, DVM, PhD, Kansas State University
  • Daryl Olsen, DVM, Audubon-Manning Veterinary Clinic
  • Denis Zegar, Food For All
  • Jon Seltzer, Dakota Worldwide
  • Erik Lieberman, government relations, National Grocers Association
  • Doug Sumpter, DPS, Inc.
  • Kevin Murphy, food360°
  • Moderator: Paul Adams, Adams & Associates

 

A 2004 survey revealed farm animal veterinarians to be very trustworthy to consumers.

Who do customers trust?

Believing messages all comes down to whom consumers trust. “There’s misinformation and various agendas out there, so I think it comes down to who you trust,” says grocery industry veteran Doug Sumpter. “Academia can provide credibility, but unfortunately they are not good at communicating that. So, marketing has to come in and play that part. But at retail, when something occurs, it’s common for more misinformation to be disseminated as employees who don’t know the facts tell customers whatever they believe the facts to be. We need to think about how would you efficiently want to disseminate information in the store? If I’m a retailer or consumer and I see something in the press, I will go to who I trust. I think the industry has an obligation to quickly communicate the facts with sound bites -- not some long story -- so that it can transition from a cashier to a customer quickly and accurately. But trust has to be developed.”

Retail, food and distribution industry consultant John Seltzer agrees that it comes down to trust and transparency. “One of the things I always enjoyed about Whole Foods is that if you ask someone a question about the product, if they can’t answer they will tell you they can’t answer and they will go get the manager. Then they insist on having someone contact you. It’s much more labor-intensive, but these issues are very complicated and it takes good store-level training. As people have more specific questions, make sure they get referred and then followed up.”

A 2004 survey by the Animal Agriculture Alliance and the National Corn Growers Association tracked those whom the public trusts when it comes to messages about farm animal well-being. The study revealed farm animal veterinarians, U.S. Department of Agriculture representatives, Food and Drug Administration representatives and farmers and ranchers among the most believable. On the opposite side, among the lowest ranked for credibility on farm animal treatment were well-known Hollywood actors and politicians. To see a PowerPoint presentation of the survey, visit www.animalagalliance.org/images/ag_insert/2004_Pub_Op_PR.ppt.

“The results of the survey are very positive and don’t surprise anyone who appreciates the contributions that animal agriculture makes to our quality of life,’’ said Bruce Andrews, Animal Agriculture Alliance president, in a 2004 press release about the survey. “Our polls show that the public has consistently over the years trusted and valued American farmers and ranchers and the important job they do so well. More than 40% of respondents over the age of 25 considered farmers and ranchers to be one of their two most favorably viewed groups.”


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