He wasn’t pushed and he remains an eager Australian Agriculture Company shareholder, but departing AACo boss, Jason Strong, says the fast changing meat sector did help persuade him to reset his role for the future.
Mr Strong, who surprised the beef sector with his decision to resign as managing director last month, says recent strategic market manoeuvres by AACo – and other industry players – have highlighted how the recipe for beef business success is now much more than just good prices, good seasons and good herd management.
Broadly he believes the industry must make a “maturity leap” to break from the unreliable commodity boom and bust price cycle which undermines investment momentum and confidence.
Much more must be done to connect cattle breeders, backgrounders and lot feeders with their understanding of the end market, especially the premium-paying overseas consumer.
Under his leadership AACo has pushed its business boundaries, launching its own branded beef exports into Asia and opening a $93 million abattoir near Darwin to process Top End cattle for export, particularly its own herds.
The company, already Australia’s largest cattle producer with about 500,000 head on about 21 properties, is integrating itself across the supply chain, intent on building a much closer branding, marketing and trust-focused relationship with consumers.
It was inevitable there’d be some commentary about my decision to leave, but that happens when any business has changes in its executive ranks.
“From conception to consumption our strategy is about giving the customer as much detail as possible about what we do,” Mr Strong said.
“Our brands are based on eating quality consistency, so our strategy is now all about the production background of our beef and full traceability back to the paddock.
“We’ve shifted from thinking about beef as a commodity or with grading specification-based attitudes, to providing the sort of product that reflects consumers’ interest and expectations in the brands they buy.”
AACo’s launch of its new premium grain-fed Wagyu beef brands Wylarah and Westholme into markets in Singapore and Taiwan in the past year had given him great confidence in the strategy and the wider opportunities in Asia markets and further afield.
AACo runs the biggest Wagyu cattle herd in Australia, and arguably the world.
The pastoral giant has also launched its Welltree brand, a name derived from AACo’s Welltree Station in Northern Territory, to promote its vast outback cattle stations and the beef they produce for export.
The new brands joined its well-established grass-fed beef labels, Brunette Downs and 1824.
Although he actually continues to be employed by AACo, Mr Strong stepped down from the top job this month, taking “study leave” prior to his eventual departure early next year.
Until we can make a maturity leap as an industry the margins will continue to charge up and down the supply chain.
An executive recruitment search is expected to fill his job by December.
He said given the rate of technical and business change and market disruption in the beef industry – and just about every other business sector – he wanted some personal development time to focus on new business strategies, including marketing leadership.
He has not hinted where his next career move will be, although he intends to stay within the agriculture sector.
Timing is right
“I’m a bit sad to leave AACo – it’s an awesome company and we’ve achieve a lot as a team – but the time is right for me,” he said.
“It was inevitable there’d be some commentary about my decision to leave, but that happens when any business has changes in its executive ranks.
“It’s my decision, and fits well with the company.”
Just prior to announcing his pending departure from AACo, Mr Strong used an industry forum in northern NSW point out some hot topics he felt were shackling the sector’s potential.
He told the Yulgilbar field day the industry’s structure invariably meant where the greater profit margin rested was a constantly shifting dynamic.
“In Australia what drives that movement is purely supply and demand,” he said.
“We’re the most extreme case of a supply and demand driven market you could ever find.
So many players in the beef supply chain were focused on setting themselves up to capture a shift in the market by being “at the right sale at the right time.”
“Shouldn’t the question be how do I set up a system to make a consistent margin and profit?”
“Until we can make that sort of maturity leap as an industry we are going to struggle and the margins will continue to charge up and down the supply chain.”
Of the 10 or so parts to a beef supply chain, only one or two had a link to the end value of the product, Mr Strong argued.
“There is very little real connection between a backgrounder or even a lot feeder to the value of the product going to a consumer in Singapore,” he said.
At AACo – with its critical mass in product and size and downstream investment – there was some opportunity to connect the various links in the chain.
On the industry’s ability to capture and utilise big data, Mr Strong said he had heard it defined as a data set that was inconveniently large.
“When you’re a set of yards in the middle of nowhere trying to collect a weight and your bluetooth doesn’t work between the wand and your $10,000 tough book that has to go in the airconned car every five or six hours so it still works – it’s inconvenient,” he said.
“We see a lot of technologies being developed at the moment where people are making big promises . . . proposals about data collection on individual animals and how we transfer that through satellites and build analytical tools.
“I’d just like to make a phone call.”
The story A good time to re-think beef business thinking – Strong first appeared on Farm Online.