Capturing a premium through private label meats
Identifying and capturing a premium for ag products seems to be the name of the game as of late, and establishing a private label beef company is one way many ranches are attempting to do just that. The road to selling or shipping beef is a daunting one, however, and can be difficult to navigate.
Sari Kimbell, a food business consultant who also owns a farmers’ market in Fort Collins, Colo., uses her experience to help entrepreneurs launch their own food business, whether it’s a product marketed at farmers’ markets under the state’s Cottage Foods rules, or a product distributed more widely on store shelves. The Cottage Food Act became law in Colorado in 2012 and allows individuals to sell certain “cottage food” products produced in unlicensed home kitchens. Modified in 2013, the bill allows properly labeled foods like spices, jams, and certain baked goods to be produced and sold without a license or permit from the Colorado Department of Public Health and Environment and is not inspected by any state or local government.
Kimbell offers a variety of courses for those wanting to pursue a food business ranging from a free Farmers’ Market Jump Start course to one-on-one coaching. Licensing, insurance, pricing, supplies and selling wholesale are among the topics Kimbell touches on in many of her courses.
Elevation Beef is one of Kimbell’s clients who has worked with her to complete branding and marketing work around their Wagyu beef. Creating a brand, she said, is something people are willing to pay for especially if beef production is where their expertise lies rather than in website design and marketing.
Kimbell said concentrating on the features of a product, be it Wagyu, heritage pork, or humanely raised, concentrating on the benefits is key. Benefits can be the transparency of knowing the person who raised the beef or the satisfaction of serving meat raised a certain way to the family.
Kimbell began with Grant Farms in 2009 building the meat program when the farm to fork movement was gaining steam. She then worked at Whole Foods Market as a buyer and then helped onboard new producers. It’s that experience that demonstrated a need for what is now her consulting business.
“People work really hard to get their products on the shelf but then you still have to get it off the shelf and into people’s carts,” she said.
She encourages producers to concentrate on the consumer and not try to be everything to everybody. Defining the customer narrowly allows producers to learn to speak the language of the consumer and reach them directly and intentionally.
At 307 Meat Company in Laramie, Wyo., branded meat companies are part of Kelcey Christensen’s diverse private label clientele. Ranging from one customer who processes one head per month and places his own label on the packages to another who processes 15 head per week.
From his standpoint, someone who may be a good fit for a private label beef company is a producer with about a 50 head herd and a bit of extra time to invest in marketing and distribution. An operation like this likely sells primarily directly to consumers through friends and families. On a larger operation, he said, for example, 100 to 200 head, a private label business may depend on a more developed online platform to sell and distribute to consumers. Christensen said for private label businesses of this size, about 30 percent of the beef is sold wholesale directly to restaurants. Social media plays an important role in most models, he said.
Opening in the first week in March, 307 Meat Company is a full-service butcher shop with a retail store that carries products and cuts consumers wouldn’t be able to access at a grocery store.
“There’s a ton of cuts on a beef carcass that aren’t marketed well,” he said. “The merlot steak comes out of the heel of the hind leg, which 90 percent go to grind and unless you know where it is and want to take the time to get it, most people grind it. However, it’s a very good steak.”
Other unusual and sought-after cuts include a tomahawk steak and a porketta, a seasoned pork loin rolled with the belly around it that is typically cooked to a very high temperature for a short time.
On the plant side, Christensen uses his expertise to guide private label companies beyond the cuts — ribeyes, strips, filets and sirloins — that are best sellers. Adding value to cuts or creating specialty cuts keeps the private label from having an overabundance of grind and provides exciting options for consumers.
Value can be added to the grind through specialty sausages with a variety of different flavor profiles, cured meats, salami, summer sausage, jerky, snack sticks, specialty seasoned patties and premade meatballs.
Christensen said processors can guide producers in the creation of the actual label with a designer and, if claims like antibiotic free or organic are made, help submit the label to Washington, D.C., for approval.
The biggest challenge facing small meat marketing companies is the lack of an outlet through which to market their ground and it is allowed to accumulate, which it does very quickly. On ranch cold storage must be inspected by the local health department. If the product is taken from the package and reworked, the facility must then be USDA-inspected commercial facility.
From both the marketing and processing side of the plate, concentrating on the consumer and their experience is paramount. Kimbell said consumers want to picture themselves enjoying a product based on it’s benefits rather than it’s features. ❖
— Gabel is an assistant editor and reporter for The Fence Post. She can be reached at firstname.lastname@example.org or (970) 768-0024.
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It’s time for Colorado meat producers to throw down the gauntlet.