NH Foods on Angus Reserve's iterations and what customers will pay for

This emerged from a fascinating behind-the-scenes presentation by NH Foods director of sales and marketing, Andrew McDonald, at this month's Angus National Conference.

NH Foods processes between 8000 and 10,000 head of cattle a week across three processing plants, two in Queensland and one in NSW. It also owns the Whyalla feedlot in southern Queensland.

It has a swag of beef brands but Angus Reserve, backed via Angus Australia's Verified Black Angus Beef program, is the most famous.

It's the branded beef Costco retails and it is also exported to more than 40 overseas markets.

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Mr McDonald spoke about how iterations of the brand have had to be developed in order to tailor it to different market access requirements - and why a brand owner would bother doing that.

Maximising value from a carcase, which in turn means paying the best money to producers to secure the cattle needed, means bringing as much product under the premium umbrella as possible, he said.

Angus Reserve is a 150-day grainfed program based on marble score 2-plus and Meat Standards Australia accreditation.

In Europe, however, dentition rules have meant cattle with less than four teeth can be supplied under a zero tariff regime and anything over is non-commercial, which means a younger animal is required.

"So we've had to pull back on days on feed for that market, which is also hormone-free," Mr McDonald said.

Change will come with the United Kingdom free trade deal, which has eliminated the dentition focus and will open up that high-value market to long-fed programs, he said.

In China, days on feed have had to be increased to meet age regulations, and it is also hormone-free.

"The combination of those two things increases the marble score, which is good because that's what China looks for - marbling is the number one differentiator for value there," Mr McDonald said.

"For China, most of the Angus Reserve product sits above a marbling score of five and so we target food service rather than retail."

Elevated discussion in Australian beef circles about ESG - environmental, social and governance outcomes - has interesting implications in the branded beef space, judging by Mr McDonald's comments.

"We have legislation in Australia (around things like sustainability and animal welfare) but we are then selling into countries who don't really care about most of these things," he said.

"Animal welfare is a new concept to most of the places we sell - will they pay more for it? No, because it doesn't register on their radar.

"When you talk carbon emissions to the world outside of North America and Europe, no one really cares - they are just looking at what price the beef is and is it safe.

"So we have the challenge of having to operate a business in Australia and retain a social licence to operate but we have to try to get a return from overseas customers who in most cases don't see any of this as adding value.

"This will be the largest challenge we have going forward - connecting the social licence to operate in this country with what customers overseas are willing to pay."

Mr McDonald said carbon neutral food might be a trend in Australia but to 95pc of beef customers everywhere else, it's not a high priority - food safety and affordability is the overriding purchase driver.