SPECIAL EDITION - Go Direct

Boost Your Agri-Business: Go Direct

An eight-foot, deep green Christmas tree brings the aroma of fresh outdoor forest air to the room. Strings of lights twinkle and garland rests gently on the boughs. Ornaments of all colors, shapes, and sizes hang delicately from the branches. Neatly wrapped packages adorned with bows and ribbons stacked neatly under the tree’s canopy.

The children’s excitement is heard buzzing throughout the house as the adults announce it’s time to gather ‘round the tree and open presents. One by one the gifts are distributed to kids and grown-ups alike. After the space beneath the tree is bare, and all the gifts have been opened, Grandpa announces, “I have one more present for each family. I just need to grab it from the freezer.”

The freezer??

Grandpa returns carrying a box of Omaha Steaks for each family.

This scene has played out thousands of times since 1952 when Omaha Steaks launched their direct-to-consumer line of meat products.

Considered a true pioneer in the direct marketing of beef products, Omaha Steaks was founded in 1917 as a meat-cutting operation. In the ‘40’s, steaks were furnished to travelers on the Union Pacific Railroad and wholesaled to restaurants and hotels. Omaha Steaks’ mail order business was launched in 1952 with their first catalogs mailed to customers in 1963. By 1984, only fifty percent of their business was to retail outlets and restaurants, the rest was through direct marketing.

In 2021, revenue estimates were at $450M-$500M and Omaha Steaks boasted 48 retail stores in 20 states with ~1,500 employees.

So how did this mom & pop butcher grow to become a staple for corporate and personal gifting and “The Official Sponsor of Tailgating?” They embraced a value-add approach to an otherwise commonplace commodity.

Omaha Steaks was an early adopter of internet advertising, when they placed their first online ad on CompuServ in 1991. They launched their website in 1995 and drove customer engagement through direct mail, online advertising, and their retail stores. Eventually they published cookbooks and pursued partnership opportunities effectively funneling customer leads to their premium, direct to consumer brand.

How does this help you, the producer?

Thanks to the likes of Omaha Steaks for paving the way for direct marketing meat, you have an opportunity to grow your agri-business in much the same way. Consumers are growing increasingly aware of where their food comes from and how it reaches their plates. And they are proving they care with their wallets.

There are only two ways to increase your agri-business profits: increase revenue or decrease expenses. In production agriculture, many of your expenses are fixed. So let’s increase revenue. You have the power to tell your story, craft your brand, and create a loyal following of consumers who will pay a premium for your products.

Butcher Box launched in 2015 and bootstrapped their way to ~$600M in revenue for 2022. They recognized consumers wanted grass-fed beef, all-vegetarian fed hogs, and organically fed chickens. So, they created a loyal brand following through effective online marketing and the use of influencers.

Good Ranchers launched four years ago and did $40M in revenue in 2021. They recognized that ~80% of grass-fed beef sold in the US was being imported, so they pledged to be 100% American sourced. Couple that with their initiative to give meals to food-banks for every box purchased, they have been able to cultivate a fiercely loyal customer base.

These are just a couple examples of companies that differentiated themselves and crafted a brand to speak to their following. Both Butcher Box and Good Ranchers utilize a subscription-based ordering model which helps with backend cash-flow and inventory management. They have leveraged internet marketing in the digital age to grow their brands.

Opportunity abounds for every specialty ag producer to capture their portion of this growing market. With inexpensive access to software and online tools, you can boost your profits by thinking bigger than produce stand sales and Farmer's Market Saturdays.

That’s great, but where do I start?

1. Niches Get Riches

Trying to appeal your product to 100% of consumers will quickly lead to calls with a bankruptcy attorney. Find your niche and double down. Here’s some idea generators:

• Organic

• Natural

• Free Range

• Grass-Fed

• Grain-Fed

• Humane Handling

• Locally Grown (state/region)

2. Business Plan

You’ve identified your niche, now you need to build out a basic business plan as your roadmap to success. (Keep in mind that we have yet to see a successful company that adhered 100% to their initial business plan; flexibility is key!)

Your business plan should at least cover the following:

• Executive Summary

• Company & Business Description

• Product & Services Lines

• Market Analysis

• Marketing Plan

• Sales Plan

• Legal Notes

• Financial Considerations & Model

3. Execute

This is where you get to experience the thrill of going to market with your “baby.” It's going to take focused determination and a lot of hustle, but you have the roadmap to execute. Have faith in yourself and your team, treat obstacles as learning moments, and do not be afraid to ask for help from those who have done it before.

Email us with questions you have along the journey, and we will gladly help where we can.

When you hit stumbling blocks and feel the inevitable thought that you can’t pull it off, just remember this:

Here are some resources to help you:

• E-book "How to Direct Market Your Beef"

• USDA - Division of Food Safety & Inspection

• Ag Marketing Resource Center

• USDA - Alternative Farming Systems Information Center

• ATTRA Sustainable Agriculture

• University of Kentucky Project

• Sustainable Agriculture Research & Education

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