Cattle ranchers started pushing for brand-name beef in the 1990s in hope of reversing a slump in consumption. They think processors will do a better job of marketing beef and be more conscious of its safety and quality if they've got their name on the label.
Packers currently do little advertising for beef. The ad campaign — "Beef. It's what's for dinner" — is paid for by producers.
‘Not a Messy Product Anymore’
Wal-Mart's shoppers like the prepackaged meat because of the watertight package it comes in, said Wal-Mart spokeswoman Jessica Mouser.
"They like to be able to pick up a nice, clean package. It's not a messy product anymore," she said.
Wal-Mart is selling Thomas E. Wilson beef in about half of its 868 supercenter stores nationwide and plans to phase it into the rest as IBP increases production
IBP retrofitted a plant in Council Bluffs, Iowa, to cut and package the beef, and has a larger facility under construction in Nashville, Tenn. So far, IBP is selling about 5 million pounds of Thomas E. Wilson products a week, out of its total weekly sales of 210 million pounds.
"It's hard to say that we've reached a point to say that this is the only way we're going to buy beef," said University of Missouri economist Gary Brown. "It's safe to say we're definitely trending in that direction and it will continue to be more and more a dominant part of what happens."
The Tyson-IBP merger has cleared the Justice Department's antitrust review. Tyson has delayed closing the deal, pending IBP's resolution of accounting issues raised by securities regulators. IBP slaughters 35,000 cattle a day, well ahead of No. 2 ConAgra, at 24,800, and reported sales last year of $14 billion.