“Both the advantage and the disadvantage of our product is that the entire animal is changed,” Hansen says. “It creates supply chain planning challenges as we go forward.”

The greatest challenge is what to do with the higher-value steaks. But that’s a problem both Hansen and Landgraf say is solvable. Hansen has a background in marketing and merchandising; prior to joining NBO3, he was with Koch Industries and Hormel Foods. Landgraf was both a fed cattle buyer and a meat salesman for IBP (now Tyson) and National prior to joining Lakin Feedyard.

 

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GreatO ground beef has been test-marketed in several retail stores, and early results are encouraging, Hansen says. While their target market is health-oriented consumers, their research shows the product has appeal across a wide range of consumer demographics.

That means their challenge going forward is primarily consumer education, helping people understand they can get an added health benefit from a product they know and love already. To Hansen’s mind, pricing will have a lot to do with how quickly and to what extent consumers will try the product.

Much of their beta testing thus far has been to determine how much of a premium the product can carry, and how best to reach consumers with point-of-purchase information. The product is priced below natural and organic, yet promises to deliver a health benefit that consumers understand. That’s a combination they hope will entice consumers to try the product.

While the sweet spot in pricing is a moving target, the health benefits are the bedrock upon which they can grow the product, Hansen says. They’re not shooting for the “natural” market in their production practices, but their production practices change the beef’s nutritional profile. Thus, they’re marketing the product as “naturally better.”

Initially, they plan a Midwest rollout, and Hansen is guardedly optimistic. “It depends on consumers’ willingness to pay for a real product benefit,” he says. But they have ambitious targets for growth. “We started with the Midwest, but we certainly see it growing across the U.S. and export.”

Landgraf agrees. “Maybe the first time, consumers will try it because they want to be healthy,” he says. “Then the second and third, they buy it because they like it.”

 

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