Retail butchers have become customers of the Australian arm of mega shopping warehouse chain, Costco, since it switched exclusively to Oakey Angus Reserve brand beef.
“It’s the best beef in Australia by far,” says Marcel Moodley, assistant general merchandise manager, Costco Wholesale Australia Pty Ltd.
He told an enthusiastic audience during a seminar at Beef Australia 2018 in Rockhampton that Costco had sold $111 million of Angus Reserve beef since linking with supplier, NH Foods, in 2013.
Oakey Angus Reserve is produced from animals fed for 150 days at NH Foods’ Whyalla feedlot near Texas, Queensland, and processed at the company’s Oakey abattoir on the nearby Darling Downs.
Mr Marcel said Costco expected its sales of Angus Reserve brand beef would keep growing by around 20 per cent a year.
“The sales uplift has been phenomenal,” he said.
Costco’s Angus Reserve was so attractively priced that butchers along with restaurants and caterers were buying the premium brand beef, he said.
The company also sells Wagyu beef supplied by NH Foods.
Costco was preparing to expand into China and New Zealand and warehouses in the two countries would be stocked with Angus Reserve from Australia.
He said Costco’s philosophy was to buy the best branded products and sell them at the lowest price which was achieved through low retail mark-ups.
Costco Australia was already exporting branded food from Australia into Asia including Steggles chickens and muffin mixes from the Manildra Group.
Consumers must be members ($60 a year in Australia) to shop in Costco’s 749 warehouses worldwide which sell everything from coffins to nappies.
US-based Costco now has nine warehouses in Australia with two more (Melbourne and Ipswich) to open later this year.
“We plan to open two warehouses a year in Australia,” Mr Moodley said.
Shoppers typically only shopped there twice a month and many bought goods in bulk packs.
Mr Moodley described Costco as a “Bunnings selling Myers and David Jones quality goods”.
He said Costco’s profits came almost solely from membership fees which made renewals a key driving factor in the business.
Pat Gleeson, general manager of Oakey Exports, told the same seminar that NH Foods was struggling to source enough quality cattle for its Angus beef programs.
Oakey was processing 5000 head a week and 60pc was Angus verified.
This high-quality beef was in keen export demand in destinations such as the EU and China, he said.