by Stephen Wagner
Dr. Scott Barao is executive director of the Maryland Beef Council and spoke at the Penn State Extension 2021 Lancaster Cattle Feeders Day virtual seminar, addressing challenges and opportunities. “What I’ve noticed because of the disruptions in the supply chain, which you’re well aware of, is that there’s been a renewed voice of those who think ‘local’ as the savior of the beef business. They like to claim that our food supply chain has become too centralized and that we need more niche opportunities, more small packers, more local food, and that may or may not be the case. At the same time, I’ve also heard many folks who are interested in trying to build a local meat business, specifically a local beef business, to try to address the new demand that was created.”
From there, Barao set out to identify some of the challenges you’ll face if you try to build a local meat business, especially at the retail level, “so you go into this with your eyes wide open,” he said, “because I can guarantee your checkbook will be wide open to get started.”
In Pennsylvania, Maryland and the northeast Mid-Atlantic region, multiple small packers have vanished. The challenge of harvesting and processing acceptable retail cuts for the consumer becomes a huge undertaking. Barao wants you to consider the travel distance for the live animal, trucking to the processor, to the harvest facility and getting that finished product when it’s ready for sale at your farm or your market. “We’ve gone from traveling 200 miles round-trip now down to about a 70-mile round-trip. You have to think about the size of your load, cost of the fuel, the equipment you have to do that safely and then how you get the finished product back.”
Packaging and presentation is another factor. Presentation of your packaging is important, even down to what your label looks like. Blood on the packaging is not good, nor do you want air and ice crystals inside. “From my experience, keeping the label as clean and simple as possible will pay dividends in the long run,” Barao said. The final thing in the harvest and post-processing is inspection, food safety and legal requirements to get that product into the hands of consumers at the retail level.
Labeling needs to meet legal requirements. “If you’re going to make claims on your label, even something like ‘grass-fed,’ those labels have to get approved. At the minimum, your label is going to need the USDA stamp for the processing facility so you can sell at the retail level.” To avoid crowding the label, use other means at point of sale to explain your feeding process, the way your farm operates, the family business or the history behind your farm, the breeds you’re using and so forth.
Assessing and addressing the local or regional market is yet another aspect you’ll be dealing with. Ask what your marketing opportunities will be and how you’ll address them. What will your sales structure be? Are you going to sell through a farm market on your property? Are you going to farmers markets or a co-op? All are viable options. Then you have to decide whether you’re going to sell by the retail cut or sell as sides or quarters. “I can guarantee you that if you can get your product sold at the retail level, you will find that is the greatest opportunity to add value to your product,” Barao said. If you’re raising cattle through the breeding and feeding stage, and then giving the product away at wholesale, you’re not going to be a sustainable business. But if you can capture more of the value of that, whether it’s sides and quarters or by the retail cut, you have a greater opportunity to be successful.
“Advertising can be expensive. How do we target a market? A niche? A person? A consumer? How do we develop our business model so that it is profitable and sustainable?” Barao asked. You have to identify your market niche. He said if you think you’re going to build a long-term profitable business on COVID customers, you’re crazy. “And those food line customers who are coming to your farm today because of COVID, or because they don’t want to shop with a bunch of other people … are going to go back there as soon as they perceive it to be safe,” he said.
A rigid concern should be customer service. This is where you can really set yourselves apart. “I have what I consider to be the three Cs of building customer loyalty.” First are the cuts – the variety, the availability, the size, the weight, the thickness and the leanness of the cuts. Second is cooking. Be prepared to give customers some cooking advice or a cooking guide or a recipe that will get them started. (All this information is available to help you through your beef council.) Third is convenience. “Your market hours, for example. Are you open every day? Weekends? Do you offer delivery opportunities? How about phone and internet orders? All things you might want to consider,” Barao said.
Lastly, consider product pricing. “If we don’t price the product right, if it isn’t truly profitable at the end of the day, not at the end of the year, then you will not be in business very long,” he said.