Development of a commercial system to apply the Meat Standards Australia grading model to optimise the return on eating quality in a beef supply chain

Abstract

A major trial was conducted to develop, test and demonstrate the application of Meat Standards Australia (MSA) research findings in a beef retailing environment. A new concept retail store was established whereby a mix of raw beef products and pre-cooked meals were merchandised under an eating quality grade defined by MSA palatability scores. Products were presented fully prepared within cooking method with pricing based on the predicted cooked results. Large price differentials were established between the three grades offered, with 5-star product priced at more than double the 3-star product. The principle of pricing being directly related to eating quality was extended from the retail store sales to fabrication and the purchase of source cattle from producers. This encouraged considerable innovation to optimise eating quality and returns, demonstrating the potential for truly transparent value-based pricing systems to achieve change. Novel systems were developed to break down and fabricate the carcass into ‘retail-ready’ product with extensive software development to trace the eating quality, value and location of individual cuts and products. Detailed feedback provided the producer with an accurate measure of value and sufficient data to evaluate possible alternative production strategies. Results at each level of the supply chain were encouraging with compound annual growth in sales exceeding 12% at retail level and continued innovation through fabrication and on-farm areas combining to improve eating quality and financial outcomes. It was demonstrated that the consumer focus delivered by MSA grades could be applied at a commercial level providing an opportunity to reposition beef as a contemporary consumer product and to implement a value-based system across all sectors.