Market Overview

The Certified Angus Beef ® brand marks 11th consecutive sales record

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Propelled by growing consumer demand for high-quality beef and family
farmers focused on that target, Certified Angus Beef LLC reported record
sales of 1.121 billion pounds in Fiscal 2017 (ending Sept. 30).

That's the 11th consecutive annual sales record, continuing a 13-year
streak of year-over-year growth. It is also the second time sales topped
1 billion pounds and marked an increase of 10.4%, or 106 million pounds,
over last year.

"Our partners, from the farm to the plate, all fit together in the
effort to fulfill demand for high-quality beef," said brand president
John Stika. "Sales growth was fueled by the dramatic, positive shift we
continue to see in the supply of high-quality cattle."

Quality at the farm

Since the Certified Angus Beef ® brand's start in 1978 as the
brainchild of Angus cattlemen who wanted to give consumers consistent
beef quality, family farmers have been its foundation. Raising cattle
that target the brand's 10 exacting product quality standards enables
processors, distributors, restaurateurs and retailers to meet
ever-growing consumer demand.

Responding to strong economic signals over several years, ranchers have
grown the size and improved the quality of their herds through the best
genetics and management practices. This collective improvement
translated into 4.53 million cattle certified for the brand – 15.6% over
Fiscal 2016. The rate of cattle eligible for the brand rose to a record
29.7%, up from just 16% a decade ago.

Business divisions set records

Sales growth from a global network of more than 19,000 licensed partners
reflected consumers' preference for the brand, and recognition of its
quality on menus and in meat cases.

  • Sales exploded in 49 countries outside the United States, reaching a
    record 174.5 million pounds – a 26.4% increase. Growth came from a mix
    of new business in China, the Dominican Republic and Peru, as well as
    strong gains in Japan, South Korea, Hong Kong, Mexico and Canada.
  • Retail sales grew nearly 5%, reaching a record 456 million pounds. The
    top 50 licensed retailers averaged 6.6% growth and two-thirds
    increased same-store sales.
  • The Foodservice Division netted sales of 385 million pounds – an 8.5%
    increase. Licensed distributors increased sales by more than 9%, and
    sales to licensed restaurants were up over 12%.
  • Sales of value-added products that bring convenience meals to both
    retail and foodservice customers rose more than 5% to 27.0 million
    pounds. Key items included marinated thin meats, fully cooked burgers
    and fresh corned beef.

Growth across product categories

Consumers crave steaks for special occasions, and this demand backed an
8.4% increase in sales of middle meats (premium steaks). Sales of roasts
and other end meats rose by 13.5%, and ground beef sales were up 1.7
million pounds. The most discerning customers pushed sales of the
brand's Prime product extension up more than 35%.

This balanced growth resulted in 12 monthly sales records, and included
seven out of the 10 best sales months in the brand's 39-year history.

About the Certified Angus Beef ® brand

World renowned for its exceptional quality and generous marbling, the Certified
Angus Beef
® brand is the original brand of premium beef,
created in 1978 and still owned today by family ranchers. With only the
best Angus beef making the cut, 10 exacting standards ensure superior
taste and tenderness in every bite. For more information, visit
CertifiedAngusBeef.com, or follow the brand on Facebook,
Twitter,
Instagram,
Pinterest
and LinkedIn.

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