Meat processors are passionate about craft butchery and high-quality meat production, but some can overlook a key reality: where, how, and to whom will they sell their products?
A successful business model will consider a sales strategy that maximizes value and balances inventory. Below are some tips for thinking through this.
WHERE TO START?
Cattle, on average, yield 450-570 lb of finished goods from hanging weight, 130-160 lb of which is ground beef. As an example, processing 50 head of beef per week would generate 6,500-8,000 lb of ground beef per week, not to mention the other cuts. Without a clear sales strategy, it’s easy to become overwhelmed by inventory or overstock one type of product.
Answering a few foundational questions provides a good starting point:
- Business Type: which type of meat processing business do you want to start?
- Harvesting/slaughter for your own processing/sales?
- Harvesting and/or processing for others?
- Producing value-added or ready-to-eat (RTE) products?
- A combination of these?
- Species: which animals do you want to harvest or process?
- Domestic livestock only? If so, which species? (E.g., cattle, sheep, goats, pigs)
- Other species? (E.g., bison, poultry, seasonal wild game)
- Products: which types of products do you want to produce?
- Raw products only?
- Ready-to-eat (RTE) products only? (E.g., cooked/smoked sausages, jerky, snack sticks, etc.)
- A combination of both raw and RTE products?
- Markets: where, how, and to whom will you sell these products, and how will you position these products (e.g., packaging, labeling, pricing, etc.) to your customers?
- Consumer Retail? (E.g., retail stores, online, farmers’ markets)
- Local Retail? (E.g., third-party butcher shops, markets, retail stores)
- Food Service (E.g., HRI: hotels, restaurants, institutions)
The answers to these questions—and the others we’ll walk you through during your Friesla Project Development Phase—will help you shape your business plan, product line, and marketing approach.
OPPORTUNITIES FOR NICHE PROCESSORS
Large meatpacking plants focus on high-volume production built on efficiency and consistency. Very small and small processors have an opportunity to differentiate themselves by creating high-quality, craft products, connecting with consumers, and building a compelling brand story. The ability to carve out a specialty market allows for premium pricing.
Many small processors struggle with seasonality. Year-round operational stability is vital for keeping a processing business profitable. Maintaining access to a diverse customer base and a continuous supply of cattle—or augmenting with other species like pigs, sheep, goats, poultry, or wild game—are key components of a sustainable business model.
These considerations are well worth nailing down before opening your doors. Once production is underway, you’ll be initially focused on dialing in your operations rather than exploring new markets. Establish a clear plan in advance. Once you’ve begun, you can observe your operations, orient yourself to what is going on, decide the best courses of action, act on your decisions, and evaluate the results—then continue this loop.
CHOOSING WHERE, HOW & TO WHOM TO SELL
CONSUMER RETAIL
When people think of an independent meat processing business, this often takes the form of a direct-to-consumer retail business. Selling directly to end consumers is a great way to establish brand loyalty and earn a higher profit margin.
A retail model can take many forms, including selling through your physical storefront, online, or at farmers’ markets. The advantage of retail sales is direct engagement with customers, allowing for education about where your products come from, how cuts differ, and building relationships that lead to repeat business. Another key benefit is holding on to your maximum profit margin: selling directly to your end consumer allows you to cut out the middle man—and any margin you’d otherwise forfeit if they’re marking it up, reselling it, etc. Bear in mind that managing a retail space and/or fulfilling online orders will require additional staffing and logistical planning.
Selling beef in bulk—primal cuts, halves, wholes, or quarters—is another potential outlet. This approach ensures that the entire animal is utilized, rather than just the most popular cuts. While this model may serve your specific strategy, it may narrow your customer pool and limit your opportunities to generate additional value through further processing.
LOCAL RETAIL
Selling through local retail outlets like third-party butcher shops, markets, or grocery stores provides brand visibility and a steady sales channel. Retail meat products are typically packaged in cuts with which the consumer is familiar, like steaks, roasts, and one lb packages of ground beef.
When considering selling through local retail outlets, the big question is distribution: will you personally deliver your products, or will stores need to order them through a third-party distributor? While your profit margin may be lower than with direct-to-consumer sales, the ability to move a larger volume of products (e.g., ground beef) may offset that tradeoff. Local Retail sales may also be used in combination with the prior category, Consumer Retail.
Food Service
Food service accounts for a substantial portion of beef sales in the U.S. This market, commonly known in the industry as “HRI”, includes customers like hotels, restaurants, and institutions (e.g., schools, healthcare facilities). The types of cuts that HRI accounts purchase vary widely. High-end restaurants may prefer subprimals to cut their own steaks, while other food service customers may require pre-cut steaks and roasts.
Since food service is a diverse market, it’s a great channel for balancing inventory. Ground beef is a significant portion of food service demand, and partnering with restaurants can be a great avenue for moving valued-added products, such as beef cheeks or menudo ingredients to local Mexican restaurants.
Challenges with food service accounts are primarily economic. Selling through intermediaries means forgoing margin twice—you sell to a distributor at one price, and the distributor resells it to another for a markup, adding a layer between you and the end consumer and reducing your profitability. Food service buyers may have extended payment terms, requiring you to carry costs for an extended period and often require consistent, large volumes. These factors may make this channel less viable for small processors.
Diversification & Maximizing Value
Regardless of which markets you’re selling to, diversification is key for a meat processing business to be truly sustainable. Relying on a single revenue stream can be risky, especially as the market fluctuates. Successful processors often maximize value by offering a mix of direct-to-consumer, retail, and food service sales while carefully crafting a niche that enables them to sell at premium prices.
EXAMPLES FROM LOCAL MEAT PROCESSORS
A big differentiator for independent processors is product quality, and that’s where Friesla comes in. We provide Meat Processing Systems purpose-designed for your operation, along with a full services package and training, which gives you the tools to craft premium products. Friesla’s clients are a testament to the value that is generated through premium products and a solid business model.
MTXBeef
MTXBeef added in-house meat processing to handle their own cattle, simplifying logistics and guaranteeing supply and quality for their direct-to-consumer and restaurant customers in Texas. They supply local restaurants in West Texas’s Hill Country (think prime steaks for higher-end restaurants) and regional restaurants in San Antonio (including ground beef for Mexican restaurants) while also selling direct-to-consumer through their website. Watch their story here.
The Meating Place
The Meating Place began as a butcher shop and custom-exempt wild game processor. They later vertically integrated their Oregon operation to ensure a constant supply of high-quality, local meat for their patrons—and to eliminate being beholden to other processing facilities. They sell in-person through their own retail store and a separate, standalone café. More on them here.
Five Marys Ranch
Five Marys Ranch had already built a brick-and-mortar processing facility and offered a diverse supply of California ranch-raised meats. But they wanted to add onsite harvest to their operations: both to gain control of the process and ensure quality from pasture to plate. They sell direct-to-consumer through their website and in-person through their flagship restaurant, Five Marys Burgerhouse. Read Five Marys’ story here.
Bear Mountain Beef
To avoid hauling cattle long distances and being limited by the unavailability of Wyoming meat processors, Bear Mountain Beef built their own plant, integrating in a Friesla Mobile Harvest Unit and Cut and Package Module. Their business model includes selling in-person through their two retail stores (in both their local town and the state capitol) and direct-to-consumer online through their partner, Mountain View Meats. Here is how they got started.
Harrison Harvesting
Their business model is an entrepreneur’s answer to the pressing need for USDA-inspected meat processing—and a local meat market—in Kentucky’s Bluegrass Region. Customers purchase beef through their Bourbon Barrel Beef store next to their meat processing plant, online with in-state and regional shipping, or via Harrison Harvesting’s weekly local pickup service. Watch more here.
The Producer Partnership
A 501(c)3 nonprofit founded in Spring 2020 with the mission to end hunger in Montana, The Producer Partnership partners with livestock producers across the state by processing donated livestock to provide meat to local Montanans in need. Through 2024, they had donated nearly 250,000 pounds of Montana-raised animal protein to the Montana Food Bank Network and other charities across the state. View their Client Story here.
BRK Meats
BRK Meats’ business revolves around locally-raised, high-quality East Texas beef. Customers purchase their products in-person at their retail store or in regional grocery stores like Brookshire Brothers. They offer fresh and frozen products and an extensive line of jerky that is smoked in-house. Watch how they do it here.
ONE SIZE DOESN’T FIT ALL
Ultimately, success in independent meat processing hinges on a business’s local, regional, and/or digital opportunities. Capitalizing on these opportunities requires thoughtful planning, strategic market selection, a commitment to quality, and a compelling brand story to tie it all together. With a solid business model and the tools for restoring local meat processing, processors can build a business that is both sustainable and positioned for long-term growth.