Transcript Direct Meat Marketing PPT

Direct Meat Marketing
Dr. Bryon Wiegand
University of Missouri
Elements of Market Discovery
 Why do I want to participate in a non-traditional
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marketing system?
What can I produce?
Am I an expert in these production systems?
Who would buy it?
Where would I sell it?
What can I charge?
Will I make money?
What is my contingency plan?
Why do I want to participate in a nontraditional marketing system?
 Incorporate hobby into earnings
 Additional income stream for household
 Small-scale production system
 Participate in local or regional economy
 Value-added in current economic climate
What can I produce?
 Endless possibilities
 Bound by local ordinance
 Limited by expertise and facilities
 Beef
 Pork
 Lamb
 Goat
 Poultry
 Rabbit
 Venison
Am I an expert in these production
systems?
 Animal husbandry
 Niche does not mean inefficient!!
 Niche does not mean devoid of technology and/or science!!
 Previous knowledge base
 Draw on previous knowledge, but be prepared for new thinking
and changes in production practices.
 Access to production practice information and willingness
for adoption.
Planning is key! Jumping into animal agriculture with
both feet might be the riskiest venture ever if serious
consideration is not made for the “SYSTEM” of making
meat.
Who would buy it?
 Market study
 Case study
 Full Circle Farm
 Thankful Harvest
 Planned Lamb
 Evaluate locally
 Ask questions
 Do not assume that your customer wants what you want!
Where would I process the
animals?
 Local meat processors are a good source
 Many are State or Federally Inspected and would entertain a
business agreement
 Approach them with a good plan
 Know your product
 Ask them questions as to options for:
 Slaughter capacity
 Cooler space (especially important for aging of beef)
 All fees (slaughter, aging, cutting, packaging, storage)
 The more streamlined you can make the system, the easier it
is for the processor
www.missourimeatprocessors.com
Where would I sell it?
 Farmer’s Markets
 Direct/off farm
 Grocery stores
 Restaurant
 Web marketing
Farmer’s Markets
 Most require an annual membership
 Can lead to more direct marketing opportunities/build
customer base
 Regulated by local health authorities
Selling meat at Farmer’s Markets
 Require meat to be inspected either by state or federal
inspection
 Most health ordinances require meat to be sold frozen and
require a chest freezer to be provided by the producer. Check
with your local health department for their regulations.
 Requires a well defined pricing that is highly visible.
 Most shoppers move quickly through the market and need
quick and concise information without the “total sales pitch”.
Columbia Farmer’s Market
 Hours
 Monday 4-6
 Wednesday 4-6
 Saturday 8-12
 Location
 behind the Activity & Recreation Center (ARC), on the
corner of Clinkscales & Ash streets.
Successful Vendors
• Show-me farms
• “Born Tender Beef ”
• “Omega Beef ”
• No hormones, implants, antibiotics
• Pasture raised chickens
• Susie’s Grass Fed Meats
• “100% grass fed locally raised animals, not
fed antibiotics or implanted with hormones.
• Animals are sustainably raised on small
family farms.”
• Missouri Legacy Beef
Direct/Off farm Marketing
 Producers located near large metropolitan areas have a
greater potential for direct marketing because of their
proximity to a large number of consumers.
 Requires more “education”, but likely appeals to more
customers with “niche language”.
 Might have the greatest margin capabilities.
 More expensive
 Travel
 Fees
 Time
Grocery Stores
 Small independent retailers with more upscale meat
departments are probably your best opportunity
 Realize however that even some independent grocers buy
from wholesale warehouse businesses and some products may
be “spoken for” in these purchasing agreements.
 Large grocery chains give management some discretion for
local purchases.
 Gerbes
 Hy-Vee
Restaurants
 Since individual restaurants do not
use large quantities of meat, access
to a large number of restaurants
and a mixture of different
restaurant types is necessary for a
producer to successfully target this
market.
 Patchwork Farms features the
Patchwork pork chop at Murray’s in
Columbia, MO
 Missouri Legacy Beef is featured at
Hoss’s Market in Columbia, MO
Internet Marketing
 One of the barriers to this kind of “remote marketing” is that
packaging and shipping costs can as much as double the end
price to the consumer.
 Websites can be useful in helping local buyers to locate
producers in their area.
 Strict rules exist regarding interstate commerce and sales tax
collection.
 Federal Inspection required for interstate trade of most meat
products. (Stayed tuned next week for Dr. Clarke)
Ethnic/Religious Markets
 The ethnic market is a niche often forgotten for meat
products.
 Goat is preferred by Hispanics, Caribbeans, and Muslims
 Jewish prefer cuts from the front-end of the animal
which can be difficult to market to typical American
consumer (Kosher)
 Facilities for on-farm ritual slaughter may be desired by
some ethnic groups (Kosher or Halal)
Marketing ideas
 Separate yourself from other producers or products that can be
found at a grocery store
 Be certain the claims are accurate and backed by fact and not
feeling
 Sell your product rather than demean the competition
 Most directly marketed products have a unique claim - find your
niche
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Organic
Local
Natural
Grass-fed
Antibiotic Free
Synthetic Hormone Free
Free-Range
What can I charge?
 Know your cost of production, promotion, and distribution.
 Make sure you charge more than your break-even price.
 Be aware of what other direct marketers are charging
 Attend farmer’s markets in your area to see what other
producers are charging for the same type of product
 Economic assessment
Whole Carcass sales
 If selling a whole or half carcass, processing doesn’t
necessarily need to be done at a USDA inspected facility
 If the animal is sold LIVE to the consumer, custom exempt
processors can be used. (Rules and Regulations for this in
Part II of this series).
 By using this sales method, customers can specify certain
cuts, wrapping, and curing preferences.
 Whole Animal Buying Guide
 Make sure customers understand how much yield they
could expect from a certain live animal
 Beef Cutout
 Pork Cutout
 Goat Cutout
Will I make money?
 Be honest when balancing the books
 Your labor is an expense
 Treat it like a business
 Small business ventures usually see “light” in three years.
 Depending on the level of capital investment, some turn a
profit in their first full year of existence.
 Be patient
 Don’t be afraid to cut costs
 Web site design
 Printed advertising
 Radio advertising
What is my contingency plan?
 Hopefully the business will be successful and you find room
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for growth, but what if………….?
Be certain to have an out
Where do you sell animals?
Where do you sell equipment?
Can the business be sold in it’s entirety?
Having a plan to dissolve, liquidate, or sell a small business
will save a lot of pain in the end.