Developing a Roadmap for a Sustainable Industry
By AMY TRINIDAD
Sheep Industry News Editor
(May 1, 2013) The U.S. sheep industry has had its fair share of studies that identify the changes or trends taking place within the industry; however, not many have expressed opportunities for the industry to prosper in the future. One such study that resulted in change for the industry was the lamb industry adjustment plan in 1999 which brought about the national lamb checkoff and the scrapie eradication program.
The information that is lacking from the majority of these studies is the quantitative recommendations for the industry, which include identifying specific benchmarks that should be implemented in order for the industry to continually evolve and be able to provide a product the customer desires. To create this roadmap for a sustainable industry, representatives from all sectors of the lamb trade gathered in March to collectively begin laying the framework.
History Behind the Effort
It was last summer when the American Lamb Board (ALB) spearheaded an effort to engage all segments of the U.S. lamb industry – national and state association leaders representing sheep producers and feeders and several lamb company officials – to discuss plans for a potential summit on the 2012 lamb market situation. At the time, the lamb industry was coming off a decade of year-after-year price gains and experienced lamb prices that were cut in half from the prior year. To address this price volatility and other lamb market issues, such as the back log of slaughter lambs and quality topics, a taskforce was formed to develop recommendations for the lamb industry. To assist in this effort, ALB with financial support from the National Sheep Industry Improvement Center (NSIIC), hired an unbiased third party that didn’t have any previous experience within the industry – The Hale Group.
With considerable experience helping a wide variety of food industry entities with strategic planning, The Hale Group has worked with the National Cattlemen’s Beef Association, the U.S. Grains Council, the National Pork Board and the U.S. Meat Export Federation and such private companies as Starbucks, Sunkist, Tyson and Sam’s Club.
“This effort started with a request from the industry for a summit to discuss the current lamb market. Instead, out of these discussions, the committee thought it more meaningful to develop real solutions and strategies and design a roadmap for the industry,” explains Megan Wortman, ALB executive director.
As Bob Ludwig, a consultant with The Hale Group that has worked on both sides of the farmgate, stated about the Lamb Industry Assessment Study, “I’m not interested in another study. Another study won’t solve the industry’s problems. We are committed, through this study and the advisory committee, to identify actionable plans that we think are realistic and create a mechanism to execute them on a timeline that this group establishes.”
Those participating in the first of three meetings of the advisory committee represent all sectors of the industry, large and small producers from various geographic locations. They included Reed Anderson, Oregon producer; Greg Deakin, Illinois producer and editor of The Banner Magazine; Richard Drake, National Livestock Producers Association (NLPA) Sheep and Goat Fund Committee and ALB member; Nick Forrest, Ohio producer and ALB member; Richard Hamilton, California producer; Burdell Johnson, North Dakota producer and Food and Fiber Risk Managers chair; Clint Krebs, Oregon producer and ASI president; Dan Lippert, Minnesota lamb feeder and ALB chair; Pierce Miller, Texas producer and NLPA Sheep and Goat Fund Committee; Frank Moore, Wyoming producer and Mountain States Lamb Cooperative member; John Oswalt, Michigan producer; Gary Pfeiffer, Superior Farms; Kathy Soder, Pennsylvania producer; Dennis Stiffler, Ph.D., Mountain States Rosen; Angelo ‘Butch’ Theos, Colorado producer and ALB member; Clark Willis, Utah producer and NSIIC member; and Henry Zerby, Ph.D., The Ohio State University and producer.
“This team consists of a wide range of perspectives and backgrounds as we had hoped. Since the study is absolutely focused on implementation of strategies, it is critical there be representation of all facets of the sheep world, so that in the end we could all buy in,” says Lippert.
Overview of Initial Meeting
The purpose of the Lamb Industry Assessment Study is to identify and analyze the major challenges facing the American lamb industry, to propose the most effective solutions to those challenges and to develop a strategy for the industry that will strengthen its short-term and long-term competitive advantage and return the industry to consistent profitability.
Ludwig said to the Industry Advisory Group, “Our objective is to stimulate collaborative industry action to reverse the decline of the American lamb industry and develop ways for the industry to engage in continuous improvement in the future.”
Support for these goals was echoed by the U.S. Department of Agriculture’s (USDA) Undersecretary for Marketing and Regulatory Programs Edward Avalos with his comments. “We at USDA welcome this study. It is extremely important to understand the challenges that the producer, packer and consumer faces. It is even more important to develop solutions to these challenges.” Avalos ended his call with a request from the group to keep him informed of progress made as the lamb industry is not only important to America, but to him personally.
The intent of the meeting that was held in March was to provide direction for the project. Ludwig began by covering some background information regarding protein consumption and consumer trends over the past 30 years. Although the amount of protein Americans have been consuming has declined since the high in 2008, one protein that has more than doubled in consumption over the past 30 years is shrimp. Ludwig provided this example to demonstrate that it is possible to increase the per capita consumption of a small protein category that is not inexpensive. “It can be done,” he relays.
Some of the major consumer trends impacting the food industry include demographic shifts, consumer connectivity, focus on value, sustainability, local sourcing, health and wellness and flavor and variety. Trends in the major supply chains include the continued consolidation of the foodservice marketplace and retail growth in the natural sector.
With these trends of what consumers are wanting in mind, the committee was asked to engage in a SWOT (strengths, weaknesses, opportunities and threats) analysis of the U.S. lamb industry. The committee engaged in very candid discussions for each of these categories, putting a lot of the issues the industry is experiencing on the table.
“Some very serious discussions on complex issues all segments of the industry are facing were had. There are no easy answers but at least we are all working together to find solutions,” says Krebs.
It was through these discussions and the SWOT analysis that committee members were asked, “What five changes do you think should be the high priority action items for the American lamb industry?”
After each committee member weighed in on their action items, they were broken down into five categories. These five categories are used to divide the committee into smaller working groups. They will work closely with The Hale Group in collecting and analyzing information and then make recommendations to the full Industry Advisory Group for proposed changes to the industry in preparation for the next meeting. The working groups and the questions that will drive their work are:
Meat Quality and Consistency: What changes should the American lamb industry make to ensure that all consumers get the quality of lamb they want with every eating experience?
Seasonality Management: What changes should the American lamb industry make to better manage the challenges of the seasonality of production, the seasonality of consumption and the seasonality of slaughter and processing?
Productivity Improvements: What changes should the American lamb industry initiative to make continuous improvements in productivity at every link in the lamb value chain from breeders to food retailers?
Awareness and Promotion: How should the American lamb industry make non-lamb eaters aware of the great attributes of lamb and what should it do to promote higher lamb consumption among those who currently eat lamb?
Information Transparency and Industry Collaboration: How should the American lamb industry provide greater transparency of information throughout the industry and build greater trust and collaboration among all sectors on the industry?
Over the next six weeks members of the working groups will be gathering information from various industry sources and begin shaping the action plan for their assigned category. The purpose of the next meeting of the Industry Advisory Group, scheduled for mid-June, is to hear from each of the working groups, review and analyze the information they have collected and develop outlines for tentative action plans.
“At the June meeting, the group will be digging deeper into the real strategies and recommendations the industry can implement to increase profitability for all segments of the industry and improve the long-term competitive advantage of the entire industry,” explains Ludwig.
To engage the entire industry, various webinars will be held following the June meeting asking for input regarding the recommendations. “We are hoping for heavy industry involvement in these webinars,” says Wortman, explaining that this will be the most opportune time to collect feedback from the industry regarding the recommendations before the action plans are refined and the roadmap put in place in August.
“I was encouraged that the advocacy each representative brought for their own industry segment or geographic region was tempered by the collective goal. If that team approach prevails in the end, we have a real chance of making the positive changes we need in the sheep industry,” says Lippert.