AUSTRALIA'S biggest and oldest pastoral powerhouse is no longer a cattle company - it's a beef company, its managing director told guests at the Rural Press Club in Brisbane this morning.
Since taking the reins of Australian Agricultural Company (AACo) last year, Jason Strong is continuing to draw on his experience as a retailer and marketer of Australian beef to sharpen the message that AACo wants to be at the forefront of supplying beef to the burgeoning Asian dining boom.
Echoing the sentiments of Agriculture Minister Barnaby Joyce and National Farmers' Federation president Brent Finlay earlier this week, Australian beef producers will not be part of the Asian food bowl, but a strategic, specialist link in supplying high end product with a premium price tag.
Hence, the Darwin abattoir, which Mr Strong assured would be delivered on time and on budget as early as next month, providing a new chilled and frozen beef gateway to the growing Asian middle class through Australia's most northern port.
The positioning of AACo as a vertically integrated branded beef behemoth - from production, processing, sales and marketing - is nothing new. The same message was sold to the market and shareholders - keen to see AACo lift out of it debt doldrums - by his predecessor David Farley at the company's AGM two years ago.
Mr Strong acknowledged as such this morning, as the Rural Press Club's keynote speaker for its annual breakfast at the Royal Queensland Show in front of more than 300 people.
"I need to stress this is not a knee-jerk or overnight move," he said.
"This transition has been going on for several years. Over 12 years, our branded beef business has grown from nothing to a division that provides more than half of our revenue.
"A year ago about half of our feedlot and backgrounding production was sold as branded beef. In the first quarter of this year it was 85 per cent. Just as important is how and where we sell that beef.
"The key question for us in developing this strategy was not just about which parts of the supply chain we want to participate in, but at which end of the market we want to operate at."
And like the federal and Queensland governments, AACo is seeing ripe opportunities north, close to its big herds and soon to be opened meatworks at Livingstone, south of Darwin.
When the killing floor opens for business, Asia will be waiting, Mr Strong said.
"The Asian dining boom is a stunning change in global food consumption. I'm sure that most of the people in this room have heard the statistics: food demand rising by 70 per cent in the next 30 years, how Australia will need to double food exports and so on.
"There's a growing Asian middle class: right now it is about 500 million people, but that will increase to 3.2 billion just 15 years from now. The Asian middle class in 2030 will be five times the entire combined population of Europe and the US today.
"In world terms, Australia is an important part of supplying that food demand. But we can't supply all of those people with all of the beef they will demand.
"What we can do is supply the very top of that demand with premium beef. I don't think that our cattle industry should try to be the food bowl of Asia.
"I'd rather that we were the high-end specialist."
Not content with being a commodity player, AACo will position its offering in the premium category, from Wagyu to trimmings, all at the top of the premium price pyramid.
"In the past couple of months our Darling Downs Wagyu brand has won gold medals at both here at the Ekka and at the Royal Melbourne Fine Food Awards. This is terrific beef.
"Our top Wagyu brands sell for more than $250 a kg at some of the world's best retailers. That clear focus on profitability has seen our Wagyu herd grow to become the biggest in Australia - and possibly the world at more than 50,000 head.
"Our Wagyu cattle now account for about half of all our branded beef sales - and it sells for about 60 per cent more than our short-fed beef.
"There is still enormous potential for our Wagyu, especially as that Asian middle class continues to grow and demand not just red meat, but premium red meat.
"This is a customer-led transition. We will produce the beef and the cattle that our customers want."
To read more of Jason Strong's vision for AACo, pick up Queensland Country Life next Thursday.
