Niche Markets

Corporate consolidation in the beef industry has narrowed the marketing options for small-scale producers. It is increasingly hard for the family ranch at the bottom of the food processing chain to maintain profits at an acceptable level. This environment has pushed many ranchers out of the business, and inspired others to by-pass the industry and market their own products.

At the same time, the industry has faced a continuing decline in beef consumption. By the early 1990s, chicken sales had surpassed beef sales for the first time. Factors in this decline in market share include

• lifestyle changes among consumers
• health risks associated with beef fat and with "red meat" in general
• concerns about use of hormones, steroids, and antibiotics
• concerns about bacterial contamination
• "the inability of the consumer to purchase a consistent, quality product from the traditional meat case"

It is clear that the industry is failing to meet the demands of a considerable number of consumers. The successful niche marketer will target those poorly served consumers, identify their needs, and produce a consistent, high-quality product that satisfies those needs. Alternative beef marketing operations typically describe their product with some combination of the following terms: lean, organic, natural, pasture-finished (or grass-fed, or grass-finished). Other common selling points for alternative beef include "no antibiotics," "locally raised," "family farm," and "humanely produced."

Before a beef product can be labeled with terms that denote uniqueness or superiority of some kind the producer must file an "Animal Production Claim" with the Labeling Review Branch of the USDA. This involves submitting a label application, a prepared (manufactured) label including the claim in question, and an Operational Protocol (OP). An OP must be in the producer's own words and must state in detail how the animals are raised, including ration formulations, sick animal protocol, herd health management, and other facts relating to the proposed claim (e.g., "no antibiotics," "natural," "organic"). The term "chemical free" is not allowed to be used on a label. For details on submitting an "Animal Production Claim", including specific requirements for the OP, contact the Labeling and Additives Policy Division of FSIS.