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Agricultural News


Times are Changing - Producers Must Change with It to Fit into New Hybrid Retail Model Taking Hold

Wed, 07 Mar 2018 11:35:15 CST

Times are Changing - Producers Must Change with It to Fit into New Hybrid Retail Model Taking Hold


According to Don Close, protein market analysist for Rabo AgriFinance, some of the things going on closer to the consumer along the beef pipeline will have an impact eventually on our beef cattle industry and how we produce beef for today’s consumer. He explained to Radio Oklahoma Ag Network Farm Director Ron Hays, it is all about what’s happening at the retail level. He says with a changing environment with new channels for consumers to make their transactions with retailers, the traditional brick and mortar grocery store is becoming boxed in with nowhere to go. New business models incorporating e-commerce, delivery and other shopping innovations, Close says, will continue to evolve and force grocers to adapt in the future.


“This all really accelerated and came to life with the announcement back in June when Amazon bought Whole Foods for $13.7 billion,” Close said. “Initial thinking when that transaction was completed was - it’s just war and how quick will it be before online shopping takes over from the conventional stores. As time has gone by, people have had the chance to rethink some of that and really what we’re landing on - it will probably be more of a hybrid.”


By that, Close means customers will probably do their shopping and pay online, but pick up their groceries from a centralized collection site, either from an open grocery store or from a closed store that has been converted to simply a warehouse facility. Eventually, he says this will pressure producers throughout the beef pipeline to adapt their business models to fit into this new mode of distribution.


“I think we’ll get back to the craze we were at 15-20 years ago that everybody needs to be in an alliance or some kind of marketing agreement, but as we become more and more specific, not only with the quality of cattle we’re talking about, but how those cattle were fed and managed,” he said. “So, the price range that we have in all classes of cattle, I think will be much wider than what we see today.”


The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.



   



   

Listen to Ron Hays speak with Don Close of Rabo AgriFinance about the changing retail marketplace
right-click to download mp3

 

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