New Chuck Roll Cuts:The Next Frontier

Agenda

• Increasing Beef Demand• Program Background• NEW! Chuck Roll Cuts: The Next Frontier

– The Denver Cut– America’s Beef Roast– Boneless Country-Style Beef Chuck Ribs– Delmonico Steak

• Tools to Assist You• Getting the Word Out• Next Steps

Increasing Beef Demand

• Adding value to the chuck by giving consumers more choices within several price ranges

Loin Cutout Values

150

200

250

300

350

400

4/1

1/0

3

7/1

1/0

3

10/

11

/03

1/1

1/0

4

4/1

1/0

4

7/1

1/0

4

10/

11

/04

1/1

1/0

5

4/1

1/0

5

7/1

1/0

5

10/

11

/05

1/1

1/0

6

4/1

1/0

6

7/1

1/0

6

10/

11

/06

1/1

1/0

7

WEEK

$/c

wt

Prime Branded Choice Select Ungraded

Source: USDA

Chuck Cutout Values

80

90

100

110

120

130

140

4/11

/03

7/11

/03

10/1

1/03

1/11

/04

4/11

/04

7/11

/04

10/1

1/04

1/11

/05

4/11

/05

7/11

/05

10/1

1/05

1/11

/06

4/11

/06

7/11

/06

10/1

1/06

1/11

/07

WEEK

$/cw

t

Prime Branded Choice Select Ungraded

Source: USDA

The chuck (and round) cuts do not achieve value for different grades (yet)

• New news about beef– Passion + Protein + Strength = Beef– “It’s ok to satisfy my desire for beef”

• Consumers Love Beef Beef is great tasting! Beef makes you strong! Beef keeps you going!

Increasing Beef Demand

Program Background• Original Beef Value Cuts program launched in 2000• Most successful cuts from the clod include:

1. Flat Iron Steak2. Petite Tender 3. Ranch Steak

+19%+43%

+96%

RanchSteak

PetiteTender

Flat IronSteak

Foodservice: 2006 Tremendous Growth

37MM lbs.

40MM lbs.

92MM lbs.

Retail: 2006 Increased Availability

Source: NCBA Retail & FS teams

321

9,900

5,000

0

2,500

5,000

7,500

10,000

2003 2005 2006

# o

f R

etai

l Sto

res

The Next Frontier:

Introducing America’s Favorite Chuck Cuts

• Tender, flavorful, versatile

• 4th most tender muscle

• Generously marbled for a juicy,restaurant-quality steak experience

• Preferred Cooking Method– Grill

• Applications– Center of the plate

The Denver Cut

(Under Blade 116G)

The Denver Cut

A Steak Lover’s Steak

America’s Beef Roast

• Succulent and impressive with great beef flavor

• Cost-effective alternative to Prime Rib– Includes 3rd and 8th

most tender muscles

• Preferred cooking method– Oven roast (dry roasting)

• Applications– Center of the plate– Perfect for roast beef sandwiches

(Chuck Eye 116D)

America’s Beef Roast

The Versatile Roast

• Flavorful and juicy

• Meaty, tender ribs without the bones

• Perfectly portioned

• Leftovers have great robust flavor

• Preferred cooking method– Braise or braise then grill

• Applications– Center of the plate– BBQ

Boneless Country-StyleBeef Chuck Ribs

(Chuck Eye 116D)

Boneless Country-StyleBeef Chuck Ribs

Delicious. No Bones About It.

• Premium flavor

• Extremely tender & juicy– Cut from an area of the Chuck Roll

right next to the ribeye

• Suitable for any occasion

• Preferred cooking method– Grilling

• Applications– Center of the plate– Dry rubs & sauces heighten the great beef flavor

The Delmonico Steak

(Chuck Eye 116D)

FIX

The Delmonico Steak

A 4-star plate presentation

Positioned For Success

• Industry tested and developed– Project work to date

• Muscle optimization study• Technical

– Detailed due diligence

• Culinary center research– Cooking applications– Recipe development

Positioned For Success (cont.)

• Industry tested and developed– Positive input and feedback

from top packers– Integrated naming process

• Industry business professionals• Academia

– University of Nebraska

• Consumers• USDA involvement

Versatile• These chuck cuts are well-suited for:

– High-volume cooking– Home-style cooking– Ethnic dishes– Steaks– Premium beef offerings

• Fajitas• Burgers• Roasts

Why America’s FavoritesWill Be Yours Too

• Beef lovers will embrace these new Chuck Roll cuts!– Offer versatility, variety & great beef flavor

• Distinctly different cuts from what is currently offered in the fresh meat case and restaurant menus

• These cuts will meet the needs of their cooking and dining lifestyles

• Increased profit & margin opportunities

Getting To Know The CutsTools To Assist You

• Cutting Guides– IMPS/NAMP

descriptions– Image of new cut– Detailed cutting

instructions– Images showing

cutting procedures

• Fact Sheets– Cooked product image– Product attributes– Applications– Preparation

instructions

Getting To Know The CutsTools To Assist You

• Sell Sheets– Great for staff

education– Cooked product image– Product features &

benefits– Customer benefits

Getting To Know The CutsTools To Assist You

116 A Chuck Roll Net Margin ($) CWT Retail Value Per PoundTotal Cost Per Pound Pound Profit

Net Margin (%)

Retail Price Assumptions1) Beef Chuck Roll Retail Merchandising: Chuck Roast/Steaks, Chuck-Eye Steak $182.32 $4.02 $2.20 $1.82 45.35%

Beef Boneless Chuck Roast/Under Blade Roast $4.29 Three new ways to merchandise the Chuck Roll

Beef Boneless Chuck Eye Steak $4.991(a) Beef Chuck Roll Rib Program: Chuck (Splenius) Steak , Country-style ribs, Serratus Ventralis Steak $273.66 $5.03 $2.29 $2.74 54.46%

Beef for Stew $3.99

80/20 Trimmings (Ground Chuck) $3.291(b) Beef Chuck Roll Full Merchandise: Underblade Pot Roast (Serratus, Splenius, Rhomboideus), Country-Style Ribs and Chuck-Eye Roast $253.34 $4.67 $2.14 $2.53 54.20%

Beef Boneless Chuck Short Ribs (1c) $4.99

New Beef Boneless Chuck Eye Country-Style Ribs

$5.99 1(c) Beef Chuck Roll Full Single Muscle: Chuck-Eye Roast, Chuck (Splenius), Rhomboideus (Stew), Serratus Ventralis Steak and Short Ribs $277.54 $4.84 $1.79 $2.78 57.29%

New Beef Boneless Chuck (Serratus Ventralis) Steak

$6.99

New Beef Boneless Chuck (Splenius) Steak $5.99 SPLIT the Chuck Roll into 2 sections 116A = 116E + 116D

Rhomboideus (Stew) $3.99 116 E Chuck Under Blade (Serratus Ventralis, Rhomboideus, and Splenius) Net Margin ($) CWT Retail Value Per PoundTotal Cost Per Pound Pound Profit

Net Margin (%)

New Beef Boneless Chuck-Eye Roast $5.992) Under Blade with Rhomboideus 1/4 trim: Chuck (Splenius) Steak, Rhomboideus (Stew), Serratus Ventralis Steak, Stew and Trim $214.23 $4.96 $2.82 $2.14 43.21%

Subprimal Cost Assumptions Date

USDA Market News (National Weekly Boxed Beef Cutout and Boxed Beef Cuts )

9/21/2007 2(a) Beef Chuck Under Blade: Under Blade Pot Roast $136.99 $4.17 $2.80 $1.37 32.88%

116 A Beef Chuck, Chuck Roll $1.76

116 E Beef Chuck, Chuck Under Blade Roast $2.56 2(b) Beef Chuck Under Blade: Under blade Pot Roast, Rhomboideus (Stew) $125.80 $4.09 $2.83 $1.26 30.78%

116 D Beef Chuck, Chuck Eye Roll $2.56

116 G Beef Chuck, Edge Roast (IM) $2.74 116 D Chuck Eye Roll Net Margin ($) CWT Retail Value Per PoundTotal Cost Per Pound Pound Profit

Net Margin (%)

116 G Beef Chuck Edge Roast (IM) + 116D Chuck Eye Roll + Splenius

$2.56 3) Beef Chuck Eye Roll Only: Chuck-Eye Roast $555.42 $5.55 $2.90 $2.66 47.84%

Variables

Hourly Retail Meat Cutter Labor Rate $18.00 3(a) Beef Chuck Eye Roll Only: Country-Style Ribs $554.62 $5.55 $2.69 $2.86 51.55%

Marketing Cost (% of retail price) 0.00%

116 G Chuck Edge Roast (Serratus Ventralis) Net Margin ($) CWT Retail Value Per PoundTotal Cost Per Pound Pound Profit

Net Margin (%)

4) 116 G Serratus Ventralis Single Muscle: Serratus Ventralis Steak, Stew and Trim $263.25 $5.50 $3.06 $2.63 46.26%

Tab Color Key

116G + 116D Net Margin ($) CWT Retail Value Per PoundTotal Cost Per Pound Pound Profit

Net Margin (%)

5)116 G Serratus + 116D Chuck Eye Roll with Chuck (Splenius) $256.35 $5.50 $2.94 $2.56 46.60%

Cut Test: Supporting cut test detail (teal tab)

Retail Merch Subprimals: 116A and 116D Merchandising Options Top line detail summary view (light blue tab)

116 A Chuck Roll

116 E Chuck Under Blade

116 D Chuck Eye Roll

Enter new retail prices, subprimal, labor and marketing costs and new date (Column B)

Assumptions and Results: What if scenarios? All data rolled up into top line results (yellow tab)

116E Subprimals: Top line summary view (purple tab)

116 G Chuck Edge Roast (Serratus Ventralis)

NEW BOX: 3 pieces in box. 116G Serratus Ventralis, 116D Chuck Eye Roll and Splenius

Economic Model

Recipes Website

Technical Support

Getting To Know The CutsTools To Assist You

Photos

Getting the Word Out!

• NCBA PR– Press releases– Fact sheets– Photos– Be available for interviews– Posting materials on Foodservice, Retail & BIG

websites• Participate in events/trade shows

– RCA – March 2008– AMI – March 2008– MUFSO 2008– NRA 2008

Optimizing the Chuck Roll is a Win-Win!

• For Consumers– Expands the range of appealing

beef cuts from the chuck • Variety• Versatility• Great beef flavor• Tenderness

Optimizing the Chuck Roll is a Win-Win! (cont.)

• For Operators and Retailers– Stimulates beef demand

and consumption• News for your consumers• Provides additional meat equities

for operators and retailers• Provides added margin/profitability

in the fresh meat case• Merchandising flexibility• Potential for improved in-stock position

Optimizing the Chuck Roll is a Win-Win! (cont.)

• For Processors/Packers and Steak Cutters – Adds choices/variety– Boosts volume, increases margin– Maximizes carcass value

New Chuck Roll Cuts:The Next Frontier

Let the Expedition Begin!