Exploring Value-added Beef Products.

 By Jaclyn Krymowski.

A big part of growing and expanding a successful business is finding ways to better meet the needs of your current and potential customers. At the end of the day, you are always trying to add more value to your product in some way, shape or form.

According to the University of Maryland, to improve net profitability there are two strategies farmers can use to accomplish this: direct marketing and value-added products. Direct marketing allows the producer to interact directly with those buying your product. Think of on-farm sales, farmers markets, online stores and shipping services. Value-added products allow producers to dig deeper into their current products, make them worth more and therefore more marketable. This option ties very well into either direct or indirect marketing strategies.

Benefits to having value-added beef products includes expanding new markets, extending the marketing timeframe and allowing the public to gain better appreciation the uniqueness of the farm/brand.

Mistakes To Avoid
In the Penn State Extension article, Marketing Value Added Products, author John Berry defines it as a “product whose value has been increased especially by special manufacturing, marketing, or processing.” This has the end goal of remaining viable with a long-term market is to continually and consistently provide the consumers with what they are seeking.

Market is a key part of creating a value added product; half the game is to be sure that your concept stands out and will succeed with your intended consumer base. Berry breaks down the marketing side into four different strategies: market penetration, market development, diversification and product development.

Penetrating or entering the market can be difficult, this may involve either direct or indirect contact with customers. Once established, developing and honing that niche is the next step, and if fruitful then diversification and product development.

USDA defines value-added in three different ways for consumers. One of the ways is a change in the physical state or form of the product, secondly enhancing the value of the product through the production and lastly the physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product.

Value-Added Beef
For marketing and adding value to beef products, there are an array of ways to do this that suite different needs and operations.

Branding is a powerful tool, as illustrated by the success story that is Certified Angus Beef. And associating increased value with your specific brand doesn’t need to just be about the final product, it could very well start on the hoof.

Selling beef to fit a particular label, brand or certification is a great way to exercise this type of additional value. Grass fed, organic breed certifications and various welfare certifications are a few popular examples. Best of all, if your operation already practices certain breeding or management protocols that fit into a niche that already has branding/labeling, this is a very low-input way to significantly generate more profit because now your beef isn’t just another commodity.

Don’t feel confined to labels or brands already on the market. If you are marketing savvy and an avid recordkeeper, you can easily use your management practices and values to turn your farm or business into its own brand.

Even if you aren’t under an official label, your breeding decisions can easily work their way into a higher end product. Think about Waygu and Waygu-influenced beef products. Waygu beef has become a highly marketable product that continues to grow interest from professional chefs and home cooks. Other specialty breeds or types can be harnessed the same way if marketed properly.

The end product is another way to add value to beef. Products of convenience are hot sellers in any market. Jerky, pre-marinated cuts and other unique cuts are great ways to stand out in direct to consumer settings.

Of course, adding value should not mean you’re losing the expense and time you put into them. You always want to be sure that adding value helps increase profits to continue to better manage and grow the operation is also key.

Outside the box
A simple example of how adjusting a specific cut increases the value in marketing is the flat iron steak. In the South Dakota State University Extension article, Adding value to the beef carcass: Getting to know the value cuts, Amanda Blair explains how this phenomena took root and shook up beef sales.

Previously, the flat iron steak was retailed as part of the Chuck Blade Roast, but after analyzing the muscle that comprises the flat iron was tender enough it would perform well on its own. There have been other fabrication changes like this that have resulted in new value for other cuts that assist in filling the void between premium steaks and ground beef.

One of the main benefits to adding value to the product, besides stating the obvious, is that it should not only improve the quality of the product being offered, but also push the operation/herd to continue to improve their management and organizational structure to continue to offer the best quality.

When value added products fit management styles and market, profitability follows almost effortlessly. Sometimes it may require the simplest change in management or structure, but that decision may very well start the process of adding value with a long-term impact. It could also be worth the leap to a bigger adjustment in management to being a better marketer of your farm and beef.