Wal-Mart Stores Inc. has upgraded its beef offerings to include USDA-certified Angus products in its stores nationwide.
The nation's largest grocer worked with suppliers Tyson Foods Inc. and Cargill Inc. to add a supply of Angus steaks and roasts to all 4,700 store locations. Analysts saw this as one of Wal-Mart's tactics to stay competitive in a rapidly changing grocery environment.
Wal-Mart has made available USDA choice- and select-grade Angus beef rib-eyes, filets and sirloins since March. The additional offerings have come with limited advertising and promotions, but consumer demand has strengthened for quality beef options and Wal-Mart has reacted to this, a spokesman said.
"It's all about the customers," said Molly Blakeman. "They've been really dictating this for us. When looking for a steak, it's important to have the right color, cut, marbling, and we're responding to their demands."
The last time Wal-Mart upgraded its beef selections was in 2011, when stores shifted from selling primarily select beef, the lowest USDA-certified grade, to select and choice beef, about middle-grade. Wal-Mart is calling its newest meat products "Verified Angus Beef," not to be confused with the brand Certified Angus Beef, which only sells products in the top two tiers -- prime and choice -- of the quality scale of the U.S. Department of Agriculture.
"Choice Angus provides consistent quality and delivers the eating experience that consumers are looking for," Tyson spokesman Caroline Ahn said in an email.
Companies can sell Angus beef, but that doesn't mean it's necessarily a higher-quality product. Fast-food chains such as McDonald's are able to sell Angus beef burgers that don't meet the same USDA standards as the Certified Angus Beef brand.
It's too early to tell whether the change to include select- and choice-grade Angus products will influence consumers to buy more steaks at Wal-Mart, Blakeman said.
When Wal-Mart overhauled its beef selections in 2011, the company gained a 4 percent market share in beef over the span of 18 months, she said.
"If that's any indication for what's to come, we're really excited about that," Blakeman said.
In general, U.S. beef consumption has dropped over the past decade because of a mad-cow disease scare in 2003 and a drought in 2014 that cut cattle numbers to the lowest they've been since 1951, according to the USDA's Economic Research Service. However, analysts are expecting a comeback because of increased national supply and the reopening of China's previously blocked beef market.
Wal-Mart's move to add Angus beef to its fresh meat section is a sign that the retailer is looking at "different angles" to compete with other food retailers, including Amazon's recently purchased Whole Foods chain, said Bob Williams, senior vice president and managing director of Simmons First Investment Group.
"That merger is going to turn the traditional state of the grocery store on its ear," Williams said.
Wal-Mart said it is working to improve the quality of available fresh produce and meat in stores and experimenting with distribution methods. Outside of a few store locations, Wal-Mart is testing curbside pickup services for customers who place online orders.
"[Wal-Mart's] trying to expand their appeal to different shoppers," Williams said. "I think people still have the perception they could get better products somewhere else."
Business on 07/06/2017