Targeting demand
By James D. Ritchie
To successfully compete in a niche market, these farm families are finding ways to differentiate their products. They've found they can make more by adding more. That's where opportunity exists.
In his book, The Next Economy, Paul Hawken notes that most products are valued on the basis of how much "information" has gone into them. Shirts have more "information" than cotton cloth, cloth has more "information" than raw cotton lint and so on.
In the past few years, several meat marketers have added value to their products by tailoring them to a specific clientele. They make the product worth more to the customer by adding "information" that makes the product closer to what the consumer wants and needs.
"We make a living in the niche market," said Edward Woods, president of Woods Smoked Meats, Inc., Bowling Green, Mo. "As concentrated as the meat business has become, the only way we can compete is to add value. I think that will be more important in the future; marketing and packaging are vitally important.
"There's certainly more opportunity in what we're doing than in selling meat as a commodity," Woods added. "Consumers today want convenience and speed. Processing and pre-cooking let us fill that demand."
By designing products consumers want and demand, Woods has built a national market for cured, smoked and processed meats. He produces branded meats under his "Sweet Betsy from Pike" label, as well as for other companies.
"We do private-label products for other companies all over the country. That's a big part of our business," he said. "We market directly, also, and have a secured website. We sell a lot of product over the Internet."
In some cases, producers have come up with totally new products designed for today's time-short consumers.
Take Earl and Judy Burton's "Steak-Ity-Doo," for example. Several years ago, the Burtons ran a grass-and-cattle operation near Madison, Mo. They also managed a steakhouse restaurant.
"We noticed there aren't that many quality, ready-to-eat beef products on the market," said Earl. "We started experimenting with different products--test-marketing them in our restaurant."
They settled on a product made from ball tip of sirloin. It's cubed, threaded onto skewers, cooked and then vacuum-packed and quick-frozen. This pre-cooked "filet-on-a-stick" comes in four five-ounce servings per package, ready to heat and eat.
Judy Burton named the product one afternoon while she was on the tractor baling hay.
"I was thinking about it, and the name 'Steak-Ity-Doo' came to me," she said. "When we started marketing the product, that's what we named the company."
In addition to steak kabobs, the Burtons also market pre-cooked six-ounce filets and four-ounce ground beef burgers. To date, their primary market outlets have been concessions and institutions.
"We're getting the product out to supermarket delis now," said Earl. "We need to come up with a more eye-catching package to compete in grocers' frozen meat cases, and that will take a sizeable investment in equipment."
The Rains family took a bit different tack to adding "information" to products. Don and Erma Rains and their sons, David and Steve, manage a diversified farming operation just north of Gallatin, Mo., where they produce crops, cattle and hogs.
But conventional farming was not producing the income needed to support an expanding family. The Rainses began looking at alternative ways to add value to what they produced on the land.
"We did some research and found that a lot of consumers are concerned about what goes into their food," said David Rains. "So two years ago we took the plunge with natural meat. We borrowed money and built a meat-processing plant and retail market here at the farm."
In getting their meat business up and running, the Rainses had quite a lot of help from the University of Missouri's Small Business Development program and Agmo financing. Jerome Gerke, MFA's area credit manager with Agmo, has aided the family in their growing need for cash flow for the venture. Most of the beef and pork sold comes from animals produced on the farm. The Rains family runs a herd of about 150 crossbred cows and also manages a farrow-to-finish swine operation.
"We don't use any medicated feed additives, synthetic hormones or growth promotants," said Rains. "MFA formulated special protein supplements for us to feed with our grain."
"When we have a sick animal, we do treat it with therapeutic antibiotics, but once the animal recovers, we sell it through regular market channels--that meat does not go into our program," added Steve Rains. "We get lamb and poultry from other producers who follow the same production methods."
"Actually, we aren't doing anything new; we're doing something old," said David. "Our clientele is not just health-conscious customers. We have a lot of older customers who buy their meat here because it's what they were used to years ago."
Rains Natural Meats hires slaughtering done in a USDA-inspected plant, then brings carcasses to their facility (also USDA inspected) for breaking into retail cuts.
"We operate a retail meat outlet here at the farm, but most meat is sold frozen," Steve Rains added. "In two years, we have sold meat from Arizona to Massachusetts. A lot of our customer base is in the Kansas City area, and we hope to put a satellite store there some day. We've been in a constant state of expansion since we started."
In fact, Rains Natural Meats now markets all of the beef and pork produced on the family farm.
"Scheduling production to meet demand is becoming a problem, especially when we raise a lot of our own," said David. "We can't expand live animal production much more here. And it's tricky to line up new sources of supply when we don't know for sure what our market will need next month or six months from now."
"We have seven employees besides family members, and they are excellent help," said Steve. "We'd like to bring more of the family into the business, too. Our wives and children already work hard in the business.
"We are ordinary farmers trying to make a go of something that is brand new to us," he added. "We've had to learn a lot of things the hard way, and we are still learning some expensive lessons. But, being new at this, we didn't have a lot of bad habits to break."
These three meat producers agree that to compete successfully, you have to do something different from what the main market is doing. You have to design and sell products that fit a particular niche in the consumer market.
For more product information and price lists, contact:
Woods Smoked Meats, Inc.
1501 Business Hwy 54W
Bowling Green, MO 63334
Telephone: (573) 324-2247
FAX: (573) 324-2249
Website: www.woodssmokedmeats.com
e-mail: swmeats@daffron.com
Steak-Ity-Doo, Inc.
25860 Hwy 151
Madison, MO 65236
Telephone: (660) 295-4824
e-mail: jburt@cvalley.net
Rains Natural Meats
23795 260th Street
Gallatin, MO 64640
Telephone: (660) 663-3674
Website: www.rainsnaturalmeats.com
e-mail: Rainsmeat@ponyexpress.net