We've all heard of beef producers who ventured into the retail business. More often than not, those enterprises turned into hard lessons in retailing.
Now we have a story about a retail chain that went into the cattle business. As you might expect, they've also learned a few lessons.
Enter Yoke's supermarkets, with headquarters in Spokane, WA, and 11 stores in eastern Washington and northern Idaho. Their cattle-business odyssey began when company managers began searching for a better way to control beef quality and ensure more consistency in the meatcase.
“We just weren't getting the quality of beef we wanted through traditional channels — and our sales were reflecting that,” says Ken Chapin, Yoke's chief meat merchandiser.
Chapin and other Yoke's managers looked at their competition in the Spokane area. They noticed most of the smaller independent retailers had followed the lead of the mega-chains and dropped their principal beef offerings to USDA Select.
Thus, the logical first step was to ally with a quality beef program. Yoke's chose the Certified Hereford Beef (CHB) program.
“We knew we had to stay in the business of offering higher-end beef,” Chapin adds. “We decided our niche was with CHB. We could be unique in offering CHB, and their specs met all our criteria.”
Going A Step Further
After this initial step into branded beef, Chapin and Yoke's executives decided to try something almost unheard of in the supermarket business — owning their cattle supply. In doing so, they did not want to abandon their alliance with CHB.
So last fall, they formed a wholly owned subsidiary, Yoke's Cattle Co. Then they sought out and bought a total of 430 Hereford-based feeder calves from two local ranches.
The Jake Harder family, Ritzville, WA, longtime Hereford producers, sold Yoke's its first draft of feeder calves. The cattle were subsequently finished in feedyards near Omaha, NE, and harvested at Greater Omaha Packing Co.
“Our goal was to be able to provide 100% of our own bought, raised and processed cattle,” explains Chapin. “We initially thought it would take a couple of years to get to that point. The way things turned out, it wasn't as easy as it looked.”
While their sojourn into owning and feeding cattle didn't hit pay dirt, Chapin knows Yoke's was is the same boat as everyone else who fed cattle over the past year. Stung by that experience, they're staying out of the cattle business for now. But the employee-owned corporation hasn't taken down the Yoke's Cattle Co. sign.
Maybe Next Year
“The idea has super potential for a small retail chain like Yoke's,” says Jake Harder. “But they got into the cattle business at probably the worst time possible. It wasn't anyone's fault — who knew the world was going to swallow its tail last September?”
Harder says Yoke's losses weren't nearly as severe as what many other cattlemen experienced during that period.
“Given what happened with the market last fall and winter, and for their first go-round, they didn't do too bad,” says Harder. “And, of course, we were happy to have another buyer in the market.”
Arden Gremmert is Yoke's CHB representative and the person who originally sold Yoke's on the idea of CHB brand equity. He says its tough to put a price on the experience gained through an integration effort like Yoke's.
“The idea of owning cattle might not be too popular around Yoke's today, but there's nothing to make me believe they won't try it again at some point,” says Gremmert of Carnation, WA. “They know that as well as anyone that it hasn't been a good year for anyone in the cattle business.”
He's confident that Yoke's will stick with CHB. “We can still offer the quality and consistency without them having to take the risk involved with owning and feeding cattle,” he adds.
“We'll keep watching for a time when it looks like we can do better to get back into the cattle business,” says Chapin.
While the Washington Beef Council (WBC) wasn't a participant in setting up Yoke's Cattle Co., WBC executive director Patti Brumbaugh supports the concept.
“We really support efforts that help bring producers and retailers together to gain a better understanding of consumer expectations,” says Brumbaugh.
“As programs come and go there's always going to be a learning curve,” she adds. “It doesn't matter which side of the fence you're on; you're always going to be better off when you've been in someone else's shoes.”
Chapin agrees. “We certainly got an education in the cattle business. If nothing else it makes us a lot more compassionate towards cattle producers and their problems,” he says.
Walk The Talk
There was an added payoff from Yoke's decision to own their beef supply from the ranch to the meatcase. Nationwide publicity surrounding the formation of Yoke's Cattle Co., coupled with the store's local “Yoke's Pride” advertising campaigns, turned out to be a public relations coup.
“The attention was great but, beyond that, people found out we really care about the quality of not only the beef we sell but everything else we offer in our stores,” explains Chapin. “That's something you can't put a dollar figure on.”
In advancing the Yoke's image, cowboy-hatted meat managers not only posed for weekly newspaper and television ads — they walked the talk — sort of. Meat manager Tony Faux, for instance, says participation in Yoke's Cattle Co., was a chance to learn about the cattle business and learn what goes into breeding, raising and selecting calves that end up in his meatcase.
“What better way to connect with the supply of product than to be a cattle owner,” says Faux. “It puts a whole new light on cutting beef when you're an owner of the live product.”