by Beth Meyer (copyright 2012)
A niche is defined “as a special area of demand for a product or service.” It implies that the product or service is unique in some way, thereby making it different from that of its competitors. With the ever-increasing idea that every business venture has to get as big as possible in order to be successful, some see “niche marketing” as something small and undesirable. That couldn’t be further from the truth. Just about every product starts out selling on a small scale. Every product is developed to fill a special need or to be unique in such a way so as to attract a targeted group of people to buy it.
A perfect example of niche marketing is the development of a restaurant. An entrepreneur has an idea for a restaurant to sell seafood and lobster dishes. They open one restaurant. It goes over well and then the owners open another one a year or two later. As word spreads about how good the food is at the two restaurants, more individuals start seeking out that same type of food. The owners analyze the situation to determine whether they can obtain a sufficient quantity of seafood and lobster to supply more restaurants. If they can, they may develop a franchise a few years later. Ten years after the initial restaurant opens, this niche market may have franchise restaurants opening around the country.
By the sheer “nature of the beast”, the Beefalo breed of meat animals cannot grow rapidly and cannot hope to take over a large market share of the “beef” industry in just a few years. It is not a “mainstream” product, meaning that it cannot be presented to the general public to supply all or even a large percentage of the population. Each Beefalo cow can only drop 1 calf per year. You have a 50/50 chance of it being a heifer, and if lucky enough to get a heifer, it will be two more years until she can have her first calf. This doesn’t work well for mass production.
In order for the Beefalo breed to succeed and grow, it needs to understand and develop its niche. Given the brief history of the breed (less than 100 years), in order to get some ideas on how to proceed, it might be best to look outside of the breed to a similar type of niche market – the American Bison. If you look at where the Bison meat market is today and where it has been since the early 1990’s, (just 20 years) you can see what has worked for them and what has not. The following is a chart of Bison census numbers taken from U.S. and Canadian Agricultural Census data/websites.
Year 1990-91 1996-97 1999-2000 2006-07
U.S. 90,000 107,266 175,000 198,000
Canada 15,775 45,437 145,094 195,728
Rate of Increase
U.S. - 19.18% 63.15% 13.14%
Canada - 188.03% 219.33% 34.90%
In the early 1990’s, the number of bison animals held by private individuals in the United States and Canada were considered extremely low. The number in Canada in 1991, 15,775 is probably on the order of where the Beefalo numbers are today in the U.S. But throughout the 1990’s, the bison herds expanded dramatically. In Canada, for example, it has been reported that herd numbers went from 15,775 in 1991 up to 145,094 in 1999. Many of these animals were brought in from the U.S. From 1996 to 2006, the number quadrupled. According to the 2006 Canadian Agricultural Census, bison went from 145,000 in 2001 up to 195,000 in 2006. The U.S. herds started out the same time period with more animals than Canada, but by 2006-2007, the number of animals in the U.S. and Canada were about equal.
There was a 5-year period in the U.S. where the herds saw dramatic growth. While this sounds fantastic, there are two things to keep in mind; first, the numbers are only a very tiny fraction of the “red meat” animals produced in North America, and second, that growth was not sustainable because of the direction that the Bison market was headed in. If you take a look at the rates of increase in the numbers of bison in the U.S. and Canada, you see incredible increases leading up to 2000. It was in 2000-2002 that the crash of the buffalo herds occurred. Through the 1990’s, Bison producers were concentrating on increasing the number of and size of their herds. The sales of breeding stock were very good and getting better as more individuals became interested in raising bison, but everyone was interested in cashing in on selling breeding stock, not meat animals. According to an article by Steve Raabe printed in the Denver Post in April 2010, the late 1990’s saw unprecedented growth because bison meat processors were offering artificially high prices to the producers in order to promote herd growth. Many were hopping on the bandwagon and buying animals for meat and breeding stock. Everyone had those $$ signs in their sights and were sure they were going to get rich in this “new” niche market.
Unfortunately, consumer demand lagged behind, resulting in more meat than they were able to sell. This imbalance resulted in a crash of the bison industry in the early 2000’s when prices for bison animals fell from record highs of up to $100,000 for champion animals, to near catastrophic low levels of $500 per animal or less in many cases. Almost as quickly as new bison producers got into the business, they were jumping out. The bison producers that remained needed to re-think their approach in order to survive.
Breeding stock was not the niche – meat was. Breeding stock was the “seed” from which the “meat” plant was to grow. There are several lessons to be learned here. The first message for the Beefalo breed would be that while Beefalo producers are growing their breeding stock herds, they need to be growing their meat production herds at the same time. Only the best of the best should be kept (or sold) as breeding stock and all others should be marketed and sold as meat, thereby getting both breeding stock and meat out to the public at the same time. While this will result in a slower, steadier growth of the herds, it will avoid the boom/bust problem that the bison producers faced.
The second message is that while Beefalo producers need to sell both breeding stock and meat animals, they need to do it at reasonable prices. These prices need to depict the exceptional quality of the meat and the breeding stock. These prices should be higher than beef animals but should be slightly lower than or equal to bison prices. There isn’t an animal in this world that is worth $100,000! But by the same token, there isn’t a breeding stock animal in this world that should be sold for less than what it would bring for meat on a retail basis. Check out our Beefalo Calculator for more ideas on pricing your Beefalo.
And finally, Beefalo producers need to be actively developing and growing their meat business, either by direct marketing to the end user by quarters, halves and individual cuts, to small specialty markets and restaurants, or to other Beefalo producers who already have a meat market established.