Certified Angus Beef ®

An overnight success that took 35 years to build

Mick Colvin congratulates the first meat cutter to offer Certified Angus Beef ® product to consumers at Renzetti’s IGA of Columbus, OH. The date — October 18, 1978.

1st carcass certified into the brand

October 6, 1978Val Decker Packing Co.

Piqua, OH

Certified Angus Beef LLC• Established as the first brand of beef• Subsidiary of the American Angus

Association– The Only Brand Owned by the Association– Governed by a Board of Angus breeders– 117 staff members solely focused on the brand

• Non-profit structure– Funded by commissions paid at the packing level

• Never own cattle or product• License the use of our federally registered

marks

Key Discussions• Brand History• Brand Scope & Drivers of Growth• Promotional Methods• Sustainable Benefits to Producers

ANGUS SHORTHORN

HEREFORD

Changes within the U.S. Cowherd

throughout the 1970’s

Continental Breeds

POPULARITY

In 1976, USDA Broadened Beef Quality Grade

Standards

POPU

LARI

TY

An Opportunity for Branded Beef

?

#1 Reason Consumers Buy Beef

TASTE!

Offer a product that is ultimately ulledddddddd through the system by the consumer rather than pushed by the supply chain.

The Vision for the Brand

Mission Statement

Increase demand for registered Angus cattle through a specification-

based, branded-beef program to identify

consistent, high quality beef with superior taste.

• 10 Science-based specifications– Modest or Higher Degree of

Marbling– Medium to Fine Marbling Texture– A-Maturity– Ribeye Area 10.0 – 16.0 inch2

– Hot Carcass Weight less than 1,000 lbs

– Fat Thickness less than 1.0 inch– Moderately Thick or Thicker

Muscling – No Neck Hump Exceeding 2 Inches– Practically Free of Capillary

Rupture– No Dark Cutters

The Product

Product AvailabilityAccess more than 85% of North American fed-cattle

slaughter

E.R. Boliantz Inc.

ADD Enterprises

Brand Offering

Work with every business segment

Rancher End User & Consumer

PackerFeeder

Brand Integrity

• Maintain a brand integrity system that tracks every pound of product from the packer to end-user

• Assures people of the quality they have been promised

• Allows licensees to sell/serve with confidence

• Allows us to protect the Certified Angus Beef ® trademark(s)

with INTEGRITY, nothing else matters…..without it, nothing else matters.

Step 1Live Animal Eligibility

• Only Angus-influenced cattle• Predominantly (>51%) black-hided

• Nearly 65% of all fed-cattle are Angus-influenced

USDA or CBGA Graders evaluate Angus-influenced carcasses for the brand specifications

Step 2 Carcass Certification

Identified Angus & Angus-Influenced Cattle

(United States & Canada)

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,00014,193,905.0

Fiscal Year

Cat

tle Id

entif

ied

(mill

ions

)

Source: Certified Angus Beef LLC

Certified Carcasses Annual Trend

(United States & Canada)

0.0500,000.0

1,000,000.01,500,000.02,000,000.02,500,000.03,000,000.03,500,000.04,000,000.0

3,435,255.0

Fiscal Year

Cert

ified

Car

cass

es (

mill

ions

)

Source: Certified Angus Beef LLC

10%

12%

14%

16%

18%

20%

22%

24%

26%

14.0%

23.1%24.0%

22.6%

24.2%

Fiscal Year

Cert

ifica

tion

Rate

(%)

Source: Certified Angus Beef LLC

In 2013, improved carcass quality resulted in:• More than 225,000 additional CAB®

carcasses• More than 55 million lbs of additional sales

Certification Rate Annual Trend (United States & Canada)

Certified Angus Beef ® brand Sales

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

050

100150200250300350400450500550600650700750800850900

YEAR

MIL

LIO

N L

BS.

865 Million

Pounds Sold by Business Type

FY-2013*Tonnage not assigned to a specific division

46% 32%

13%9%

RetailFoodserviceInternationalMisc*

Not All Angus Qualify For the Brand

65%

35%

Black-hided Other

Nearly 65% are black-hided and Angus-influenced

Only 1 in 4 Angus-influenced cattle

meet brand specifications

3.4 million carcasses certified14.2 million eligible cattle

• USDA certified 7.8 million head into 144 different branded programs– Represent more than 30% of all fed-

cattle• 106 use “Angus” and represent all

quality levels– Represent 80% of all carcasses certified

by USDA

An Abundance of Angus Programs

USDASelectAngus

Marketing & Sales Strategy

Education Public Relations

Design & Photos Culinary Web site POS

Our Mission: Your Complete Marketing Team

Wholesale Beef Demand Index ValuesBase Year = 2002

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201250

60

70

80

90

100

110

120

130

140

150

160

170

180

Certified Angus Beef® USDA Choice

Year

Dem

and

Inde

x Val

ue

Source : Zimmerman and Schroeder, 2013Data: USDA, Urner Barry and Certified Angus Beef LLC

Since 2002, demand for the brand has increased 79% compared to 3% for commodity Choice

Stressing the Price:Value Relationship

15-year Comparative Protein Retail Pricing

$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50$5.00

Year

Aver

age R

etail

Pric

e/lb

Beef Chicken Pork

Beef price in 1998:4% higher than Pork

64% higher than Chicken

Beef price in 2012:35% higher than Pork

148% higher than Chicken

Source: USDA ERS, 2013

Consumer spending decisions are based

on a

Price:Value

relationship.

When Making Purchase Choices Taste Is Still King

The only sustainable flow of dollars from which

to continue to build the beef

industry comes from the

consumer.

Simply branding an inferior

product and charging a higher price is asking for

failure.

1. Consumer2. Supply Chain

– End-User (Retailer, Distributor, Restaurant, etc)

– Packer– Cattle Feeder– Commercial Cow-calf Producer

3. Brand & Association

Brand Relevance Hierarchy

• 2.3 million pounds are sold per calendar day• More than 16,000 licensed partners with the

brand in the United States and 43 other countries– Certified Angus Beef® brand product is sold into 76

countries• Over 90% consumer brand recall in the U.S.• Cattlemen can reap up to $40-$50 per head

in grid premiums specifically for hitting the CAB® brand target

• More than $30 million in grid premiums are paid directly to producers by packers annually

• More than 4.3 billion servings generating an estimated $2.7 billion in global consumer sales annually

After 35 Years

Mission Statement

Increase demand for registered Angus cattle through a specification-

based, branded-beef program to identify

consistent, high quality beef with superior taste.

Angus beef at its best ®