Niche marketing Producers can add value to beef
Casper – Niche marketing in the beef industry has resulted in premium prices in all the different cuts of beef. While entering a niche market can add value to production, there is also more risk involved for producers.
University of Wyoming Extension Educator Bridger Feuz, a marketing specialist, said, “Producers have to do their homework and identify their target market, also identifying demand and need before producing a product.”
Feuz presented during the Progressive Rancher Forum held on Dec. 2 at the 2013 Wyoming Stock Growers Association Winter Roundup.
Generally, cattle producers sell their cattle for about the same price, and it is very hard to differentiate one producer’s cattle from another’s.
With niche marketing there is definitely more risk involved, but there may also be the benefit of not having to deal with the constant pressure to cut costs all the time.
On the other hand, niche marketing may also require additional technical labor, as well as some innovative technology to add the value to an operation.
“When thinking about differentiating a product, think about observable characteristics like sight, smell, touch and taste,” said Feuz.
The reason some niche markets succeed and others do not is due to producer’s ability to identify a certain segment in a market that is being underserved or is not being fulfilled to the consumer’s needs and wants of that product.
Feuz also said, “Ranchers shouldn’t develop a brand they don’t believe in. Find people that share the same values.”
Strategies producers can utilize to help promote their product in a niche market include product specificity, process specificity and finding customers that are willing to pay a higher price if necessary.
Examples of some programs are Certified Angus Beef, source and age verified, advertising humane treatment of animals, safe handling and non-implanted beef.
“Studies show that consumers are willing to pay a premium for identified characteristics, such as food safety, specific areas of origin like product of the U.S., natural and organic,” said Feuz.
Advertising is also essential to launching and promoting a new product.
If producers are marketing a product that presently has little demand, it is more essential that more advertising is done at the producer’s cost. Promoting a product to a smaller niche requires more advertising on the producer’s efforts. Ads help inform the public, and promotions inform and educate the public about the niche product.
“Figure out where the target market shops. Is it farmers’ markets, mail orders, internet, restaurant, road side stands, farms or retail?” said Feuz.
Calculating a price for a niche market product is very important, and the area that the product is in determines a lot. Feuz stated that premium pricing has the best success, especially when the meat is sold at farmers’ markets.
The use of a website displaying beef products can be a useful tool because buyers can see the product, and the website can provide materials describing the product. Be careful about designing a website, for it may be challenging, and designers must be able to create the page correctly for it to work.
Another increasing trend in niche markets is for producers to take part in agro-tourism.
Ranchers have opened up their operations for educational purposes to teach school children about ranching.
Ranchers have also begun selling shares of their herd to the public. This works great for people who want to own a cow but live in the city. The shareholders are able to drive out to the ranch and spend some time with their cow, and the producer can still have a productive cow for their herd.
“This can definitely be a challenge for producers. Agro-tourism can add a lot of value to operation, but they are going to have to like people,” said Feuz.
Some other already established niche markets in the cattle industry are raising specific breeds of cattle, such as Piedmontese or Lowline cattle, raising rodeo-bucking bulls, or creating a breed of cattle and marketing that.
An example of a producer making the use of niche marketing to their advantage is the Lasater Ranch.
The Lasaters utilized niche marketing by creating their own breed of Beefmaster cattle. These cattle are a composition of Brahman, Hereford and Shorthorn cattle. The ranch then promotes their herd as being naturally raised and markets their green approach to the public.
The Lasaters received their first big break in the meat market when they marketed their beef to a Whole Foods store in Colorado Springs. Initially they started by selling one whole carcass per week, and now they are selling two carcasses weekly. This method was a great way for the ranch to sell all the cuts of meat from the carcass.