October 27, 2011
NAZARETH, Texas: A major problem for long-distance purchasers of frozen grassfed products is that the priority delivery freight charges often are nearly as high as the product itself. Needless to say these high charges greatly dampen demand.
However, if your local market is an extremely small town like Nazareth, Texas, there is really no viable alternative to soliciting urban customers.
Alan Birkenfed raises grassfed beef, lamb, goat, poultry and eggs on his Paidom Ranch near Nazareth.
All of his land is Certified Organic. In addition to grazing, he also sells organic wheat to Arrowhead Mills.
The wheat is grazed during the winter but his cattle are always shifted to other winter annuals for several weeks prior to harvest to avoid the “gamey” taste that wheat pasture often produces.
In 1997, he got to studying this high freight charge problem.
He said he had started out with just local deliveries to relatively nearby Amarillo and Lubbock in 1994.
However, in the intervening years - thanks to his Internet website and a listing on Eatwild.com - he had developed several hundred customers all over Texas.
His largest group of customers was in Houston 600 miles away and their freight charges were indeed horrific.
Birkenfeld put a pencil to it and figured he could haul the beef to those Houston customers for half of what the express companies were charging.
By making the delivery charges a separate enterprise, he figured he could add a new profit center.
He queried his Houston customers by email. They were enthusiastic about the huge freight savings and readily agreed to come to a central point to pick up their beef and lamb.
Due to the lower freight charges, his meat became much more reasonable in price for the Houston consumers and his customers quickly found other customers and Birkenfeld’s Houston business grew rapidly.
In fact, it quickly outgrew the multiple picnic coolers he was using to keep the meat frozen while in transit.
In 2003, he bought a refrigerated trailer capable of carrying 10,000 pounds of meat. This trailer is still small enough he can pull it with the ranch 3/4 ton pickup.
He then emailed customers along the route he traveled to Houston and asked them if they would like to save on their freight charges as well. The answer was a resounding yes.
Wichita Falls, Dallas/Fort Worth, Austin and San Antonio became delivery points as well and his route through Texas stretched to 1600 miles for a round-trip. Birkenfeld calls this his “Texas Swing.”
Joel Salatin calls these group pickup points Metropolitan Buying Clubs.
However, Joel Salatin uses customers’ homes as pickup points whereas Birkenfeld prefers commercial sites for pickup points.
“We need a spacious area where there is room to maneuver a trailer and space for customers to pull up, pick up their orders, visit, and move on.
“Since we’re only there for 30 to 45 minutes, we don’t cause any problems with the businesses.”
Each trip to Houston currently grosses him about $35,000 in meat sales and $3,000 in freight charges. ($3.80 per loaded mile.)
He said the freight charges are high enough that it is profitable even with the recent increase in fuel prices.
“Compensated deliveries can be extremely profitable for both the grazier and the consumer. We are both better off.”
The personal delivery has marketing benefits as well.
“We always started off with a new customer by selling a relationship first. Thanks to the buying clubs, we now get to meet 80% of our customers face-to-face and can continue to sell the relationship before selling the product,” he said.
While Birkenfeld estimates he currently has around 800 customers in 31 States, 75% of the $250,000 of the grassfed products his ranch sells every year now comes from the buying clubs.
The deliveries are made every three months for a reason.
“We sell pastured hen eggs and three months is about as long as you can store a refrigerated egg.”
In 2005, he added a new northwest quarterly route through New Mexico and Colorado.
He calls this new route “The Northwest Passage.”
In the future he may add other delivery routes on a contract basis.
He is also contemplating contracting out more production as the consumer demand for his grassfed products continues to grow rapidly.
He said he will soon probably need to buy a reefer truck for his long “Texas Swing.”
However, he is sanguine about the long-term future of that long-haul down to Houston.
“Eventually, the ranchers in Southeast Texas are going to wake up to the huge market in their backyard.
“I figure in the long-term our future is going be to servicing customers in Amarillo and Lubbock.
“In fact, I see a day when we’ll just take care of these local customers and try to find other suppliers for our distant customers,” he said.
“Local sales are the ideal for sustainable food systems.”
© by The Stockman Grass FarmerRead More Articles