Big beef business, Australian Agricultural Company (AACo), is poised to launch three new brands to reinforce its surging export marketing offensive.
Last financial year AACo grew exports to its best markets, the US and Korea, by an impressive 175 per cent and 54pc, respectively.
To bolster its expanding footprint in the high-end restaurant and food service sector in USA, Asia and Europe, two new premium brands with grain-fed origins, Wylarah and Westholme, will officially launch in September.
The company’s Westholme Wagyu stud will share its name with a new “richly-marbled” Westholme beef range identifying AACo’s Wagyu beef which is feedlot finished at Dalby in southern Queensland “to deliver a signature tenderness and a juicy steak”.
The Wylarah brand takes its name from AACo’s Wylarah Station aggregation near Surat in Central Queensland - the breeding base for its Wagyu stud herd and feeder steers.
“Wylarah” also breeds composite cattle for AACo’s 550,000-head herd and provides backgrounding conditions for its various lot-fed beef lines.
Another new brand name, Welltree, is derived from Welltree Station in Northern Territory, bought in 2013 from the former R.M. Williams Holdings pastoral business.
The Welltree brand will promote AACo’s vast and pristine outback cattle properties and the beef they produce for export.
The new brands join the company’s existing grass-fed beef labels, Brunette Downs, named after AACo’s 12,000 square kilometre Barkly Tableland property, and 1824, which recognises the year AACo was founded in the NSW Hunter Valley.
Managing director, Jason Strong, is staying fairly tight-lipped about how the new brands will fit specific markets and meat description characteristics.
“There’s a fair bit of industry anticipation about what we’re doing and we don’t want to give too much away at this point,” he said.
“We need to be quite controlled about our commentary until the roll-out gets started and builds momentum into next year, but this new branding is an indication of the different market opportunities we see overseas.
“We’ve picked names and descriptions that represent the heritage of the company and will build on their stories.”
Mr Strong said the 192-year-old AACo had a “great story to tell” about its operations in northern Australia’s wide open pastoral areas.
“For many people around the world, this is a part of Australia that embodies this nation,” he said.
“We have a proven track record in producing some of the best beef on the planet and we’re proud we produce an authentically Australian premium product.”
Company chairman, Donald McGauchie, told this month’s annual general meeting AACo’s ambition to be a globally-recognised premium beef producer was “within our grasp”.
However, he also urged shareholders to continue to “be patient” because building a premium global brand required considerable investment funding and effort.
Despite a 96 per cent increase in the amount of beef and by-products sold by AACo last year and a 45pc rise in sales revenue, the business had (again) not paid a dividend to shareholders and was not yet promising when its seven-year dividend drought may end.
Instead, it was funnelling earnings into strengthening supply chains and logistics; processing and marketing more of its own cattle, and buying new technology to improve on-farm data analysis, pasture mapping and genetics.
Mr McGauchie said investment was already transforming the business which had lifted beef sales from representing 59pc of total revenue in 2014 to almost 90pc in 2015-16.
“By focusing on quality we have managed to increase the amount of beef we ship and achieve a higher price for our produce.”
Selective overseas targets
AACo’s market growth won’t be a random push into any export opportunity, says managing director, Jason Strong.
Rather it is focused on carefully building on established relationships in the US, Europe and Asia’s high value food service sectors in South Korea, Hong Kong, Japan and Singapore.
“We might have a lot of cattle, but as a percentage of the total Australian herd we only have a limited amount of product to go around,” he said.
“Most of our growth is in key markets, particularly the US.
“Our priorities are on providing a consistent supply of high value beef to our existing customers and building on those connections.
“We have to be careful not to be go out there offering too many things to too many customers.”
The US is now the company’s biggest single market, thanks largely to an increase in AACo’s exports to a select group of buyers taking grain-fed beef (including Wagyu) and now grass-fed manufacturing-type lines supplied via the 18-month-old Livingstone abattoir near Darwin.
The new meatworks is now processing at its single shift capacity of about 500 head a day.
Although the focus of some early criticism about inadequate waste treatment processes, Mr Strong said the plant was now working well, with good management systems and a good labour force.
“Livingstone is a key asset in the north and a clear indicator of our willingness to invest in technology which is driving a lot of our growth,” Mr Strong said.
More investment in technology to improve AACo’s efficiency would continue at the meat plant as well as significant projects on company cattle stations to lift herd productivity.