Market Research

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High Sierra Beef

• Market Research
• and
• Development

Niche Markets for Meat Products Workshop UC
Davis March 31, 2004
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High Sierra Beef Overview

• Background
• Market Overview
• High Sierra Beefs Market Research
• Customers versus Consumers
• High Sierra Beefs Markets
• Product Development and Carcass Value
• The HSB Team
• Next Steps
• Questions

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Background

• Ranching families from our 6 county region met in
  2001 to discuss opportunities for marketing local
  beef.
• Our initial focus was on turning culinary cows
  into ground beef.
• High Sierra RCD and UCCE obtained grant funding
  to evaluate the feasibility of marketing locally
  and to develop a business plan.

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Market Overview

• What others are saying
• Lee Arst, former CEO of Coleman Natural Beef
• The natural beef market is currently worth
  approximately 350 million in annual sales. The
  market will grow to 1 billion in annual sales
  (about 2 percent of total beef sales).
• Consumer perceptions about food safety afford
  natural beef programs a large marketing
  opportunity there is not currently enough
  product to satisfy this interest.

2003 Niche Markets for Meat Products Short Course
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Market Overview

• What others are saying
• Dr. Gary Smith, Colorado State University
• Story beef is the wave of the future.
• The most important consumer motivations for
  purchasing natural beef are
• Hormone free
• Ranch name
• Antibiotic free
• Cattle are not fed meat byproducts
• Animal care
• Environmental stewardship

Chico Beef Day 2004
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Market Overview

• What others are saying
• Laurie Demeritt, Hartman Group
• The hottest new food trend is the wellness
  consumer.
• Consumers two biggest concerns in meat are
  antibiotics and artificial hormones.
• Consumers want meat with stronger flavor and more
  variety.
• Consumers want meat to have health benefits and
  to be guaranteed tender.

Stockman Grassfarmer, March 2004
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High Sierra BeefsMarket Research

• Conducted survey of 29 restaurants, retailers and
  institutional buyers to determine key motivations
  for purchasing beef.
• Collected consumer surveys from approximately 200
  consumers during tasting events
• Gold Country Fair (Auburn)
• Taste of the Gold Country (Grass Valley)
• Placer Land Trust Harvest Dinner (Auburn)
• North American Farmers Direct Marketing
  Association Dinner (Roseville)
• Used volunteers to conduct surveys

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(No Transcript)
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Key Attributes - Retail/Restaurant
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Key Attributes - Consumers
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Key Attributes - Comparison
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Key Attributes - Conclusions

• Beef must have certain attributes before the
  story has value
• Flavor
• Tenderness
• Food safety
• Consistency

• Locally produced, grassfed beef is far more
  important to consumers than retailers and
  restaurateurs realize!
• Natural beef is more important to consumers.
• Consumers do choose beef for its nutritional
  value (more so than retailers and restaurateurs
  realize)

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Customers versus Consumers

• Customers are the individuals or businesses who
  buy your product
• Restaurants
• Retailers
• Institutional users
• Consumers are the individuals who eat your
  product
• May also be customers

• Customers are the key to your marketing strategy
  you must convince customers to buy your
  product!
• Consumers can create demand for your product and
  can help convince customers to carry it.

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High Sierra Beef Markets

• Geographic focus San Francisco Bay Area
  (including Napa and Monterey), Sacramento Metro
  Area, High Sierra region, and Reno/Tahoe.

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High Sierra Beef Markets

• Products will be marketed through upscale
  restaurants, specialty retailers, high-end
  institutional markets, and the internet.
• Products will include steaks, roasts, premium
  ground beef, and a variety of value-added
  products (including beef sticks, jerky, lunch
  meats, sausage, case ready products, etc.)

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Product Development and Carcass Value

• Carcass yield and retail cut-out are critical to
  determining carcass value!
• How much of each cut (or product) will you have
  in each carcass?
• What factors influence yield and retail cut-out?
• Product development should maximize total carcass
  value.

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Retail Value
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Who Is On the HSB Team?

• The 12-member Executive Board and 50-member
  Steering Committee are composed of ranchers who
  are potential investors and participants in the
  HSB program. They bring real-world perspective to
  the project team and give HSB a producer
  foundation to start the business.

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Who Is On the HSB Team?

• Dan Macon, High Sierra Resource Conservation and
  Development Council
• Roger Ingram, University of California
  Cooperative Extension Farm Advisor
• Terry Jochim, High Sierra Beef Project Manager
• Doug Freeman, Sierra College Small Business
  Development Center

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Who Else Is Needed on the HSB Team?

• Marketing Consultant
• Product Development Consultant
• CEO
• Marketing and Sales Expert
• Field Representative
• Administrative Staff

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Where does High Sierra Beef go from here?

• We are currently conducting market research to
  determine the size and value of High Sierra
  Beefs potential market.
• Critical to attracting outside investors!
• We will be developing a suite of products
  designed to meet customer needs and maximize
  carcass value.
• We will be evaluating how we match customer needs
  with consumer desires.

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Where does High Sierra Beef go from here?

• Developing strategies for reaching each
  identified market sector.
• Finding transportation, processing and
  distribution partners.
• Planning to begin product development and test
  marketing activities in Fall 2004.
• High Sierra Beef will complete its marketing,
  business and financial plan by Fall 2004.
• Anticipate product roll-out in Spring 2005.

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Questions?