The American Lamb Industry Roadmap Projectd1cqrq366w3ike.cloudfront.net/http/DOCUMENT/SheepUSA/2014_BOD... · The American Lamb Industry Roadmap Project Annual Sheep Convention January

The American Lamb Industry Roadmap Project

Annual Sheep Convention

January 24, 2014

Sheep Convention Presentation

Purpose of this Assignment

1. Identify and analyze the major challenges facing

the American lamb industry

Slide 2





2. Propose the most effective solutions

Slide 3



3. Develop a strategy for the industry to:

strengthen its short-term and long-term

competitive advantage

return the industry to consistent profitability



2. Propose the most effective solutions

Slide 4


19 Members of the Industry Advisory Group

Reed Anderson, Oregon

Nick Forrest, Ohio

John Oswalt, Michigan

Gary Pfeiffer, California

Richard Drake, Colorado

Bill Fosher, New Hampshire

Dennis Stiffler, New York

Henry Zerby, Ohio

Dan Lippert, Minnesota

Frank Moore, Wyoming

Butch Theos, Colorado

Richard Hamilton, California

Burdell Johnson, North Dakota

Kathy Soder, Pennsylvania

Clark Willis, Utah

Greg Ahart, California

Greg Deakin, Illinois

Clint Krebs, Oregon

Pierce Miller, Texas

Slide 5

Representatives

from all sectors of the

sheep industry


Consumption Decline of American-Produced Lamb Meat

Slide 6

Source: Economic Research Service, USDA, supply and disappearance data for Federally Inspected lambs and sheep

Per

Cap

ita C

onsu

mpt

ion

of B

onel

ess

Am

eric

an-P

rodu

ced

Lam

b M

eat 4.87 lb.

0.31 lb.


The Other Red Meats Have Done Better Than Lamb

Pou

nds

per

Per

son

Slide 7

Source: Economic Research Service, USDA, supply and disappearance data


Cheaper Imports Have Eroded U.S. Market Share

Mill

ions

of P

ound

s, C

arca

ss W

eigh

t

Slide 8

Source: Economic Research Service, USDA, supply and disappearance data


Lamb is the High Priced Meat

Source: USDA, Economic Research Service and Fresh Look reports

+43%

Slide 9

Composite Retail Price

per Pound, 2010

The year 2010 was selected to avoid 2011 with very high lamb prices and 2012 with very low prices.


Value Proposition of Traditional Channel Must Change

Slide 10

Consumer

Value

Proposition

Local

Sustainable

Available

On-Trend

Nutritious

Convenient


A Good Value Proposition for Consumers

So what do almost all

consumers want?

Less fat

Superb taste

Tenderness

Great nutrition

Absolute consistency

Slide 11


A Good Value Proposition for Consumers

So what do almost all

consumers want?

Less fat

Superb taste

Tenderness

Great nutrition

Absolute consistency

Slide 12

Specific consumer segments

may also want:

Grass-fed

Local

Small portion size

Sustainable production

practices

Other specific characteristics


Direct Marketing and the Non-Traditional Market Channel

Direct Marketers typically maintain strict quality control

from farm-to-consumer (or retailer)

Many Direct Marketers negotiate stable prices for 3 – 5 yrs.

Many Direct Marketers can’t keep up with demand

Direct marketers face the same operational and logistical

challenges of the Traditional Market Channel

Slide 13

Direct Marketers are capitalizing on the unique flavor

& nutritional characteristics of high-quality lamb meat.


Imports are 80% of U.S. consumption

Many commercial producers exit the U.S. lamb industry

The traditional marketing channel is on verge of collapse

5 Years From Now

5 and 10 Years from Now without Aggressive Change

Slide 14


Imports are 80% of U.S. consumption

Many commercial producers exit the U.S. lamb industry

The traditional marketing channel is on verge of collapse

The traditional marketing channel has collapsed

The non-traditional marketing channel is very profitable and has grown dramatically

Consumption of American lamb is starting to grow from very low base

5 Years From Now 10 Years From Now

5 and 10 Years from Now without Aggressive Change

Slide 15


The Consumer is King

Slide 16

Consumers will get what they want …

either from you or from someone else.


You Are in the High-End, Specialty Meat Business

Slide 17

See

dst

ock

Pro

du

cer

Co

mm

erci

alP

rod

uce

r

Fee

dlo

tO

per

ato

r

Pac

ker

Fab

rica

tor

Retailer

Co

nsu

mer

s

FoodserviceOperator



Slide 18

See

dst

ock

Pro

du

cer

Co

mm

erci

alP

rod

uce

r

Fee

dlo

tO

per

ato

r

Pac

ker

Fab

rica

tor

Retailer

Co

nsu

mer

s

Quality must be created and maintained at every link

in the chain.

FoodserviceOperator



Slide 19

See

dst

ock

Pro

du

cer

Co

mm

erci

alP

rod

uce

r

Fee

dlo

tO

per

ato

r

Pac

ker

Fab

rica

tor

Retailer

Co

nsu

mer

s

Quality must be created and maintained at every link

in the chain.

Every Participant in the Chain Must Be Paid for High Quality

FoodserviceOperator


The Future Does Not Need to Be Like the Past

A 10 year vision…

A significant increase in consumption within 10 years

Reduced fat content and improved taste consistency of lamb

Majority of lambs sold on value-based pricing system

A more collaborative and coordinated industry

Consistent profitability in every industry sector

There is hope.

The traditional market channel for American lamb

can grow and become profitable if it changes.

Slide 20


How Do We Get There? Four Industry Goals

Slide 21

Consumers

1. Product

Characteristics

2. Demand

Creation

4. Industry

Collaboration

3. Productivity

Improvement


Prioritization of the Goals

Product

Characteristics

Demand

Creation

Productivity

Improvements

Industry Collaboration

1. Make American lamb a

premier product every time.

2. Promote lamb as a

premier meat.

2. Improve productivity to

remain competitive.

3. Work together as

a whole industry.

Slide 22


Objectives for Goal 1 – Product Improvement

1. Adopt consumer-driven, value-based pricing for

slaughter lambs

2. Improve the consumers’ eating experience of lamb

3. Install electronic grading at packing plants

4. Conduct a Lamb Quality Audit every three years

Slide 23


Objectives for Goal 2 – Demand Creation

1. Create a consumer-recognized and valued American

Lamb brand limited to products of a defined quality

2. Develop innovative value-added products

3. Support non-traditional sheep producers across the

country through a series of niche marketing activities

4. Explore the benefits and costs of alternative paths to

market for American Lamb

5. Build the volume and value of the export market for

American Lamb

Slide 24


Objectives for Goal 3 – Productivity Improvement

1. Promote widespread producer use of quantitative

genetic selection

2. Reduce the seasonality of the lamb industry

3. Develop a long-term plan for U.S. sheep research

and producer education

Slide 25


Objectives for Goal 4 – Industry Collaboration

1. Initiative an Industry-Wide Communications Team

Slide 26


A Process, Not a Report

Slide 27

This effort is

NOT about

the report.

The Roadmap WILL change

and evolve over time.

We are at the beginning

of a PROCESS.


Demand

Creation

Team

Five Teams to Drive the Roadmap

Product

Characteristics

TeamIndustry

Communications

Team

Productivity

Improvement

Team

Implementation

Team

Slide 28


How Will We Know If We Have Succeeded?

Slide 29

If we have lots of satisfied consumers

If we see consumption growing

If all sectors experience profitability


Ownership of the Industry Roadmap

I hear this project referred to as “The Hale Report.”

I urge you to discontinue using that term.

It does not “belong” to The Hale Group.

It does not belong to the American Lamb Board.

The Lamb Industry Roadmap is owned

by the entire American Lamb Industry.

Slide 30


Realism About Implementation

We will not always agree.

We will argue over how to implement. That’s OK.

However, BLAME is not productive.

We all need to focus on the turnaround.

Slide 31

Doing nothing is not an option!


Get Involved

Go to www.lambcheckoff.com and click on “Industry Roadmap”

The PowerPoint presentation with 140 slides

The Word document with 87 pages

Volunteer to serve on one of the 5 Roadmap Teams

Give us feedback throughout 2014:

[email protected]

978-777-9077 ext 28

Slide 32


The Magnitude of the Change

Tweaking the dials is not enough.

This requires a major “sea change.”

Every participant in the American lamb industry

will have to change the way it does business.

It will be messy. It will be painful.

Slide 33

Let’s get to work.


Thank You

Slide 34

Documents

The American Lamb Industry Roadmap Projectd1cqrq366w3ike.cloudfront.net/http/DOCUMENT/SheepUSA/2014_BOD... · The American Lamb Industry Roadmap Project Annual Sheep Convention January