Article Index "Consumer Demand for Goat Meat" Article Index

MARKETING CHANNELS FOR MEAT GOATS

By Frank Pinkerton and Lynn Harwell
About the Author

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Introduction
Much of this information is drawn from an earlier study (Pinkerton et al, 1993) and from a very recent assessment of Florida goat sales and utilization of products by the authors. We initially contacted goat industry personnel already known to us and thereafter contacted persons and firms identified by the original informants as being market players of various magnitude. We then interviewed on site those who agreed to share information concerning industry production, processing and marketing practices. We also gathered assorted statistical data from state agencies, the U. S. Departments of Agriculture and Commerce, Canadian government entitles, and from certain public livestock auctions.

Frequently, interviewees provided additional investigative leads while they were imparting historical and current knowledge of the goat trade across time and place. As expected, interviewees varied widely in willingness to share operational aspects of their firms. Many held quite divergent attitudes toward their suppliers and customers. Moreover, some interviewees spoke only guardedly while others spoke rather freely about their competitors. Considerable variation in assessments of future industry developments and prospects was also encountered. As always in such situations, we were obliged to make value judgments on the validity of the respondents replies and observations and, subsequently, to search for affirmations and contradictions among the aggregate findings.

Goat Demand
-- Overview --

The economic concept of demand holds just as it does with supply; that is, demand represents a schedule of amounts and prices over time, and the sensitivity between price and quantity can be expressed in terms of elasticity. Demand is thus a reflection of the "consumption personality" of the industry.

There are indications that consumption has moved up substantially since the mid-1980's at more or less stable prices. Figure 1 shows that total goats slaughtered at federally inspected plants has more than doubled since 1980 from a base of less than 100,000 head. This apparently reflects the continuing satiation of demand, a phenomenon strengthened by significant levels of immigration. With supply and demand both shifting upward, indications of a growing industry are in place. Figure 1 also reveals the number of goat slaughter plants in operation has declined by more than half since 1984, probably reflecting development of a more mature, solidified industry.

The major demand for goat meat comes from myriad ethnic groups; the predominately white, middle-class population consumes relatively little goat meat. Ethnic and religious identity is often a significant component of a consumer's self-concept. Ethnic persons may expend great effort to keep their identification from being merged into the dominant society. Both food preference and religious affiliation show evidence of this determination (Solomen, 1992). Thus, the consumption of goat meat is interwoven into the fabric of tradition and religious observation; e.g., the quantity taken and the prices of goat meat rises dramatically each year at Christmas, Easter, and Ramadan.

Because of this persistence in maintaining ethnic practices, whether related to habit, tradition, or religious beliefs, the demand for goat meat is thought to be relatively inelastic. This means that the demand for a certain volume of goat meat will hold in the face of strengthening prices. It also means that a decrease in price will not do much to create additional goat meat sales. Further increases in demand will come with increases in ethnic populations and improvements in their purchasing power. However, one caveat should be noted. Ethnic income, on a per capita basis, largely comes from employment in the blue collar and service industries, and is, therefore, more subject to economic aberration than salaried employment. The current economic recession has had an impact on goat meat consumption, particularly in and around New York City. This impact has come in terms of prices processors are willing to pay and in terms of quality taken.

On balance, prospects for a increase in general demand for goat meat appear to be good, in part because immigration, which averaged 61,150 per month in the last decade, will likely continue at an unabated pace and many will be goat consumers; see Figure 2. Also, the economic status of many recent immigrants continues to improve. Contrarily, acceptance of goat meat as standard fare will likely increase much more slowly among consumers with traditional allegiance to beef and pork.

Additional sources of demand are coming from the health food sector and from the yuppie community now beginning to consume goat meat as a gourmet item. To date, these are relatively minor forces, but this niche market seems open to development. Breakthroughs in utilization of goat meat (chevon) in gourmet restaurants may be easier to achieve than earlier thought. Only 15 to 20 specialty meat purveyors move the bulk of such products in the U.S.

Goat meat is a relatively "high ticket" item. While this may seem incongruous with low income economic consumption, it is not for at least three reasons: 1) ethnic households have a higher proportion of wage earners than households of other consuming groups, 2) immigrants are accustomed to paying more of their discretionary income for food, and 3) goat meat is regularly featured as holiday fare, particularly at religious celebrations, during which costs are of lesser concerns.

Population Demographics
Early on, the majority of American immigrants came from Europe, but immigration patterns changed dramatically after World War II (Soloman, 1992). Recent arrivals are more likely to be Asian or Hispanic. For example, in Detroit, the largest share of recent immigrants comes from India.

Hispanic populations are highly concentrated. Over 50 percent of the total live in only six cities: Los Angeles, New York, Miami, San Antonio, San Francisco, and Chicago (LaFranchi, 1988).

As might be expected, the makeup of foreign born in the various metropolitan areas differs in rather extreme degree. While foreign born residents in Houston and Los Angeles come mostly from Central and South America, persons with European ancestry comprise the larger group (or groups) in New York City. In Miami, most foreign born immigrated from the West Indies. Figure 3 pictures this separation of ethnic cultures for the four cities just described.

Ethnic restaurants are a fast-growing segment of the food industry. In a recent study (Zelinsky, 1987), restaurant patronage in the U.S. increased by only 10 percent in a four-year period, but rates increased by 43 percent for Mexican eating establishments and 54 percent for Asian restaurants. Chinese is the most frequently served cuisine, followed closely by Mexican and Italian. These three groups account for more than 70 percent of the total, and goat meat consumption is common to all three cultures.

Many Latins, and some Orientals, are illegal immigrants, a group understandably difficult to count. It is estimated that anywhere from 1.8 to 5.4 million persons enter this country illegally each year; again, their preference for goat meat is well known. Even among the foreign born residing in this country legally, the proportion without U.S. citizenship is rising dramatically. As shown in Figure 4 the proportion of those not a citizen rose from 36% in 1970 to over 60% today.

The Hispanic subculture, until quite recently ignored by marketers, is characterized by rapid growth and increasing affluence. Now numbering more than 19 million, it is projected that Hispanics will outnumber blacks as the nation's largest minority group by 2015. The average Hispanic household, at 3.5 people, compares with the 2.7 average of other households. Latins are also a group of youthful consumers. Their average age is 23.6, compared with U.S. average of 32.

Mexican-Americans make up 62 percent of all Hispanic-Americans and are the fastest growth segment. In contrast, Cuban-Americans are by far the wealthiest segment, but are also the smallest group and are older on average than other Hispanics (Schwartz, 1988).

Asian-Americans comprise the fastest growing minority group. Among Asian subgroups, Chinese are the largest, with Filipinos and Japanese second and third, respectively. Asian-Americans currently include about two percent of the population (Kern, 1988). Typically, they save more of their wages and borrow less, and tend to invest conservatively. In 1990, the median income of an Asian-American household was $31,500 compared to $28,700 for whites, $20,000 for Hispanics, and $16,000 for blacks.

Religion per se has not been studied extensively in marketing, possibly because if is seen as a "taboo" subject. However, the evidence that has been accumulated indicates the religious affiliation has the potential to be a valuable predictor of consumer marketing behavior (Hirschman, 1983). The teachings of Mohammed, identified with several religious groups collectively known as followers of Islam, appear mysterious to most Americans. A goat is often slaughtered for special occasions, holidays, or celebrations. In the Mohammedan calendar, there are two important feasts, the "small Eid," celebrated at the end of the fasting months of Ramadan, and "the great feast of Eid." Muslims in a financial position to do so are urged to slaughter a sheep or goat for these feasts (Beker, 1981). There are said to be some 14 million Muslims now in the U.S., almost all in the urban centers.

Consumer Preference
Hispanics spend 15 percent to 20 percent more of their disposable income on food than the national average. Goat meat is frequently holiday fare in most Hispanic homes. Family activities are important and spending time en familie influences the structure of many consumption activities. Mexican-Americans prefer to serve "cabrito," preferring young high quality, milk fed kids (live weight 15-25 lb) for this purpose.

Chinese and Koreans prefer young goats of good quality, but in the 60-70 lb liveweight range. They typically consume goat meat only during the cool weather months. Italians prefer 20-25 lb kids and Greeks prefer 30-40 lb kids at Christmas and Easter.

Jewish ethnicity exerts an exceptionally strong influence on consumers, since it incorporates both cultural and religious dimensions. Jewish celebrations of their New Year and Passover are similar to Greek and Italian observations of Christmas and Easter. Preferences are for high quality kids weighing from 20 to 40 pounds live. To satisfy an increase in demand for kosher food, each year about 500 new kosher products appear on the market. This trend is driven by 1) increased religious observance by young Jews, and 2) the belief among many gentiles that kosher food is of higher quality.

Certain people, predominately of the Moslem faith, but also groups of African descent from the West Indies, prefer older goats of lesser quality, and many times want intact males. Many wish to perform the slaughter function themselves; strongly felt religious significance is a part of this observance. Near the major cities of the Northeast and Southeast, rather extensive facilities exists on nearby farms to accommodate particular ethnic wishes.

Conclusions
1. Rationalization of production and marketing of slaughter goats is essential if future demand is to be met and if all players in the marketing channel are to receive reasonably equitable returns; modifications in industry practices, though obviously needed, will likely be slow in coming.

2. The current industry practices of marketing mostly whole or half carcasses should be altered over time and place to sales of primal and retail cuts and value-added products.

3. While yet a predominately adolescent industry, signs of maturity are beginning to emerge. Major players with some notable inter-city exceptions, will not likely be the same five to eight years from now. As sale volumes continue to increase, so also will sophistication in transportation, processing, and marketing.

4. Mass marketing to ethnic sub-culture consumers began receiving enormous play, principally in marketing journals and trade magazines only recently; consumption of goat meat will likely be favorably affected by those investigations and exhortations.

Monthly Immigration

Years Number per Month
1961-70 27,681
1971-80 37,444
1981-90 61,150
Source:  U.S. Immigration and Naturalization Service

References
1. Beker, F. 1981. Socioeconomics of sheep and goat production in Pakistan's Punjab. Verlag Brientenbach Publishers, Ft. Lauderdatel.

2. Hirschman, E. C. 1983. Religious affiliation and consumption processes: an initial paradigm. Research and Marketing, JAJ Press, Greenwich, CT.

3. Kern, R. 1988. The Asian market. Too good to be true. Sale and Marketing Management, May issue.

4. LaFranchi, H. 1988. Media and Marketers discover Hispanic boom. The Christian Science Monitor, April Issue.

5. Pinkerton, F., L. Harwell, N. Escobar and W. Drinkwater. 1993. Marketing channels and margins for slaughter goats of southern origin. Southern Rural Development Center, Mississippi State University.

6. Schwartz, J. 1988. Hispanics in the eighties. American Demographics, January Issue.

7. Solomon, M. R. 1992. Consumer Behavior. Allyn and Bacon, Boston, MA.

8. Zelinsky, W. 1987. You are what you eat. American Demographics: 6, July.

About the author: No information is available.

Agricultural Research Service

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