Four real-life examples show what can be accomplished with desire, commitment and a quality product.
If you have unlimited time, energy and resources, you can learn what you need to know about niche marketing on your own. But you can get a wealth of insight from others.
Here you will find producers who have taken matters into their own hands. Some have teamed up with others to add value to their product – pork.
In Our Own Backyard
“Part of something is better than all of nothing,” is the philosophy that inspired Haven Hendricks, Utah Pork Producers Association, and six of the state’s pork producers to look for ways to broaden their market.
Their first idea sent them down to Mexico. “We shipped a couple of loads of offal to Mexico. But due to our inexperience and the Mexican philosophy of ‘get the gringo,’ it wasn’t a good experience,” says Hendricks.
The producers turned their attention to Russia, Poland and Japan. The outcome of sending two loads of pork to Russia was similar to that in Mexico.
Reviewing their options back home, they found one that had existed the whole time. “We found that 10 percent of Utah’s population along the Wasatch Front was Hispanic,” says Hendricks. In all, there were 150,000 Hispanics; another 50,000 were Asian.
“We also found they weren’t getting what they wanted,” he adds. What they wanted was a whole pork carcass, with the skin, head and feet intact .
“If we could sell to half of that population and if each person ate a pound of pork a week, we could sell more pork at home than we could possibly supply,” Hendricks notes. So the group organized Gorditos Meats.
To start their new-found market the producers teamed up with two custom slaughterers. Shackle time and space soon became a problem, and in May 1997, the group purchased a small packing plant.
“We got federal inspection, and started up on Oct. 8, 1997,” says Hendricks. Two months later, the plant was killing 50 hogs a day. Capacity is 100 to 200 hogs a day, with the potential to reach 500. “Our kill costs are about the same as with custom slaughter,” he adds. “Except now we know we have the space and can manage the kill better.”
Gorditos Meats delivers to 10 Hispanic markets and offers three product lines:
- 30- to 60-pound carcasses.
- 70- to 90-pound carcasses.
- 100- to 160-pound carcasses.
Producers are paid for carcasses based on the lean hog futures market.
Although prices change, here’s an idea of what they charge for the carcasses respectively: $1.20 per pound; $1.10 per pound; 85 to 95 cents per pound.
“The Hispanics are loyal consumers who prefer to establish relationships,” Hendricks says. Hispanic shoppers treat food shopping as a social event, they want a full-service meat counter, they don’t like big supermarkets, women do the shopping and the family eats together, he says.
“After some time in a learning curve, we established four business rules,” says Hendricks.
1. Cash only, no credit.
2. Orders taken only on Mondays.
3. Wednesdays and Fridays are
4. There’s no carryover. On Friday the coolers are empty.
Gorditos Meats wants to expand its product line to better meet the demands of Hispanic customers. There’s also the prospect of branching out to other states and into Asian markets.
Lots To Learn
“Learning by doing” may be the 4-H motto and it’s still the best way to learn, but it can be costly in a niche market. Haven Hendricks, executive director of the Utah Pork Producers Association, shares these points on what he and the producers involved with Gorditos Meats have learned in getting their project off the ground.
- You don’t have to be big to use vertical coordination.
- Like all successful ventures, niche marketing takes time and
effort to make things happen.
- You must realize you are in the food business, not the pig business.
- People will pay extra if they get what they want, when they want it and in the quantities they want.
- Quality, uniformity, consistency and service are critical.
- Until someone sells something, nothing moves forward.
- Working together we can accomplish more than we can individually.
- You can’t compete head-to-head with the big boys. Try, instead, to find a niche.
- Hire good people.
- In the meat business, you sell it or smell it.
- You get paid according to the risk you take.
- If it’s done right, you get a bigger piece of the pie.
Quality Is First And Foremost
Outside of New Milford, Conn., sits The Egg & I Pork Farm, a farrow-to-meat case business that puts pork quality first. If a customer wants to know more about how the hogs are raised, no problem. Proprietor Jim Dougherty will host a tour.
Along with genetics, nutrition and animal health, he talks to customers about eliminating stress in the pig’s environment. “The customer wants to know these things,” he says. “The goal is for my hogs to have only one bad day in their lives.”
His point is to show customers how well cared for their product is. And he knows that reducing stress in the hog helps ensure quality pork.
Hogs raised at The Egg & I Pork Farm are slaughtered and processed in the ButchersChop, an on-farm, federally inspected processing plant. Dougherty sells the equivalent of 800 to 1,200 240- to 300-pound hogs a year.
Customers can purchase fresh pork and specialty products from the retail storefront or order via telephone, the Internet or mail.
Dougherty also supplies pork to area restaurants. For example, 1.5-inch thick chops sell for $3.50 each; smoked chops bring $4.50. “I talk to a lot of chefs,” he says. “I watch meat cases and cooking shows. I deliver the product myself. I’ve even been known to snoop around dumpsters trying to gather information. Our customers develop our marketing plan.”
Part of that marketing plan includes local and national advertising campaigns. Of particular note are the farm’s print ads in upscale magazines Saveur and Connecticut.
Not to miss an opportunity, Dougherty can be seen at flea markets in a retired, red and white airport bus, with a kitchen installed. There he serves egg and bacon or sausage sandwiches. “We sell 400 on a Sunday.”
What’s his biggest challenge? “We have to sell the whole pig,” he says. “Things like how to better market the shoulder keep me up at night.”
Brothers Customize Canadian Meat Cases
One size, in reality, does not fit all, and at the meat case some people want a custom fit. That’s the premise on which David Price and his brothers, Ray, Art and Glen, built their pork processing and retail business.
As they watched supermarket warehouses pop up across Canada, the brothers believed customers looking for quality, consistency and service at the meat case were being left behind. Already part owners in Pig Improvement Canada, the Prices purchased a small packing plant in November 1989. Ray manages the federally inspected plant, which started custom slaughtering and supplying beef and pork to wholesalers and restaurants.
After a trip to Hong Kong, Glen proposed establishing an upscale retail food store in Calgary. The Prices now have three such retail outlets in Calgary and one in Edmonton.
“Our retail outlets are more than delis,” says David. “Glen delivers high-quality, fresh food products including bakery, fruit and vegetables as well as meat.” In-store butchers answer questions and offer advice. Even more innovative is the fact that there are in-store chefs who help inform customers on preparing meals and how to complement various meat cuts.
“We also provide fresh prepared products from salads to stuffed pork tenderloin for home preparation,” adds David.
Ten farms supply the hogs that supply the stores, and they must meet specific production standards. “The hogs have a home in the meat case before they enter the plant,” says David. That provides for a stable market and hog supply.
Feedback is another benefit. “Working directly with consumers is valuable for final product quality feedback,” says David. “You can’t get a better taste panel evaluation than one that involves consumers paying their own money. It’s a powerful message to our producers and our genetics business.”
Through the years, the Prices have learned much up and down the chain. “Each business must be competitive on its own, but there are many synergies available if there’s give and take between the links in the pork chain,” says David. “The key is to look at the business from the customers’ eyes and experience rather than our own.”
The customer tells the Prices where and how to expand the business. “Building a consumer clientele is a gradual process,” David notes. They plan to open more stores in the future.
“Open, honest communication and business dealings will make everyone more efficient and will yield superior value for everyone involved,” he says.
Turning A Hobby Into A Market
“It’s a product that people have to taste to buy it,” says L.O. Bishop of his Alabama-style barbecue.
It started in 1976 as a hobby. Ten years later, Bishop began marketing his hickory-smoked pork barbecue and vinegar-based sauce.
The 30-foot-by-40-foot shed that he built to accommodate the 18-hour cooking process went through state inspection, which allowed him to sell in stores and restaurants.
Three years later, he received the federal inspection’s seal of approval, which let him sell between states. But as Murphy’s law would have it, his facility burned down three weeks later.
“It seemed devastating at the time, but it actually put us in business,” says Bishop. He rebuilt the facility with three times the capacity.
Bishop’s Barbecue Pork now cooks twice a week, vacuum packaging 1,000 pounds each time. The value on 1,000 pounds of his barbecue comes to $5,000. In 1997, sales totalled $300,000.
Bishop used to run a 200-sow, farrow-to-finish operation but now finishes hogs on contract. He purchases the Boston Butts that he cooks from a broker who buys them from area packers.
Individuals can order his barbecue by phone or purchase it in wholesale and retail outlets throughout the Southeast. Having tried his hand at commercial advertising, he is an advocate of the word-of-mouth method. “You can’t make the stores take your product, but the customer can,” says Bishop.
He offers this advice for anyone interested in turning a hobby into a business:
- You need an alternative income during the tough times.
- You must be willing to work. “My whole family helps as needed. My son does the cooking,” he adds.
- You must have a superior product.
- You need cheerleaders – people who love your product. “These walking advertisements tell everyone just how good your product is,” Bishop says.
- Have good insurance.
- Advertising can help. So can a good food broker – however, with a single product that can be hard to find.
- Always tell people business is good. If they think business is slow, they won’t buy your product.
“I see a lot of opportunities to sell meat items to small stores,” says Bishop. “A large packer isn’t willing to stop at small stores. But you can.”