P.PSH.0881 - Western Australian (WA) - Premium Southern Beef Project

Summary

The project will develop a suite of tools that will enable value chain participants to increase their operating margins by participating in high value premium market segments. The project will achieve this through building the capability of commercial participants and through the development of a series of tools to support growth within three premium beef market segments identified (Organic/bio dynamic, Wagyu and beef snacks in Southern WA).

Objectives

The objectives of the Premium Beef Project were to:
• develop human capacity and capability, and contribute positively to enterprise level profitably, sustainability and productivity (achieved)
• contribute to the DPIRD goal and the MDC strategic priorities to 2020 of doubling the value of the WA agri-food sector by 2025 (achieved)
• assist the three identified beef segments to leverage and capitalise on high quality/premium market opportunities (achieved)
• capture increased consumer demand domestically and internationally (ongoing)
• help grow the supply and value of organic, biodynamic and Wagyu beef production and associated output capacity post farm gate (ongoing).

Key findings

Amongst the industry, there is a strong belief in the market potential for WA high quality/premium beef and, based upon the export market potential alone, there is evidence to suggest this is justified.

Demand for Australian high quality/premium beef products as a nutrient source continues to intensify. The demand is mounting for the very attributes that already differentiate WA’s premium beef products, when it is available and in season. Internationally, demand continues to outstrip supply for high quality/premium beef that offers nutritional, ethical and environmental attributes – such as that demonstrated by WA premium producers.

Constraints to growth include the inability to supply a high quality/premium product all year round, better economies of scale interstate, insufficient carcass utilisation, higher processing costs for smaller producers, and a limited export market – particularly for organic beef. There are significant opportunities for the development of new beef snacks from high-quality/premium WA product, and an opportunity to reduce the amount of high quality/premium product supplying the domestic WA market from eastern states and suppliers. This positions high quality/premium WA beef as an available ‘in season’ opportunity, and a provides a longer-term structural opportunity to supply additional processing capacity to assist smaller high quality/premium producers.

Benefits to industry

By addressing the WA high quality/premium beef’s comparative disadvantages, and capitalising on its key competitive advantages, selected WA producers and processors will be better positioned to capitalise on the potential to develop competitiveness in the domestic market into the future.

There is an opportunity for greater coordination within the WA industry to replace high quality/premium beef importation from interstate, whilst meeting the demands of the sizeable export market. This project has identified a number of individual companies who could benefit from funding and support. Proposals for funding assistance should be identified and developed and submitted to MLA for consideration as part of a broader southern WA beef program.

It is evident that there is significant interest and expertise within the WA industry to innovate with the attributes of production and deliver environmental sustainability, food safety, ethical animal treatment, and the eating quality of high quality/premium beef. Suring up the ability for year-round supply and fostering collaboration along the supply chain, including the customer and government, would be the logical next step in bringing this industry forward.

MLA action

Key results of the project have revealed a number of opportunities, limitations, needs, and constraints for each of the three niche areas. These findings will help guide and inform future business and marketing strategies for WA high quality/premium beef producers and meat manufacturers.

Future research

Recommendations for expanding the domestic and international market competitiveness for WA high quality/premium beef products include:
• Development and implementation of an ‘in season’ high quality/premium beef marketing campaign to ensure that WA grassfed beef finds a price point within the reach of WA consumers.
• Further analysis to investigate the differentiating attributes of high quality/premium beef from a taste, nutrition, ethical, and provenance perspective.
• Identifying and developing additional export customers needed to solve the domestic market carcase utilisation challenges.
• Supporting high quality/premium beef businesses to scale up in order to meet growing international demand.
• Collaborate and align with producers and processors to ensure availability and reliability around meeting high quality/premium beef specifications, including MSA.
• A willingness for industry to collaborate and develop new approaches and business models with the end customer is of utmost importance.
• Moving high quality/premium beef businesses towards greater collaboration in the development of longer-term supply agreements.
• Identifying longer term structural issues around processing infrastructure and capacity to ensure whole of supply chain approach.