Is Selling Direct to Consumers Right for You?
Hannah and Eric Klitz reside in West Point, NE and are the owners of Oak Barn Beef. Oak Barn Beef is their direct-to-consumer beef business that was started in 2018 by Hannah while she was in college. Since starting this endeavor, Hannah and Eric have navigated selling beef as quarters, halves and wholes, to shipping specific cuts and bundles to all 50 states and opening a storefront for their local community. They butcher approximately 100 head of cattle per year. Hannah shares her insight on how to know if this avenue of selling your beef is right for you and what resources have helped her along the way.
What cuts, packages and products should you sell?
Hannah started selling quarters, halves and wholes because that is what her dad was already doing. “The quarters, halves and wholes are the least time-consuming way to sell your beef directly to consumers. I recommend this option for people who want to get started but don’t have a lot of time to dedicate to this portion of the business. Selling individual cuts and beef bundles add a lot more time to sort through all the beef, and it requires much more infrastructure when you look at the freezer space needed. You will also need a good inventory system.” Said Klitz. While selling in bulk to consumers is easier, large purchases like this are not for everyone. Not all consumers have large freezers to store a quarter of a beef and it is a sizeable upfront investment for people who are used to purchasing one week of groceries at a time. Oak Barn Beef offers subscription boxes to accommodate those who lack freezer space but still want high-quality beef directly from ranchers. As far as selling individual cuts goes, Klitz said, “Selling individual cuts is more about the experience for the consumer. A lot of times, these are being purchased as gifts and shipped to other people.” Think about how much freezer space you have yourself to store product before diving into selling individual cuts and bundles.
Storefront vs. Online Shipping
The pandemic pushed many businesses to create online formats, however Oak Barn Beef found an opportunity to do the opposite. Hannah created an online format early on for her business, so she was already set up and ready to go once the pandemic hit. However, in the past year, Oak Barn Beef opened their storefront in West Point, NE. “The opportunity just presented itself. We were looking for a building to house a larger freezer and distribution space to accommodate the shipping portion of our business. The shipping boxes and insulated coolers take up a lot of room. We were using a retired hog barn on the farm that we had converted to a beef room, but we were outgrowing our space. When our current building came up for sale, it had enough space for supply storage, freezer space and office space. The office space was large enough to also accommodate a storefront as Eric and I are the only employees. Local clients had been asking if they could come to shop in person and others were driving over an hour to come to our other facility. This new facility was a win-win as it is a nicer and more convenient location for customers who want to pick up their beef and serves our local community.”, said Klitz.
Overcoming Learning Curves
While Oak Barn Beef is a great example of a successful direct-to-consumer beef business, Hannah and Eric have overcome many challenges too. “When we first started one huge learning curve was the butcher side of the business. I had experience with live cattle, but the butcher just seemed like an unknown category for me. We've gotten over that a little bit in the past few years and put some more processes into place to make this easier. Now I'd say our biggest, challenges are having a ground beef surplus from selling individual cuts, as well as having thinner margins with the high commodity prices we are currently experiencing.”, said Klitz.
Before starting Oak Barn Beef, Klitz interned at Five Mary’s Farms to learn the ins and outs of shipping beef to consumers. This gave her a strong foundation to launch her own business and avoid a few speed bumps along the way. Klitz also made a point to build a strong relationship with their local butcher. “As far as butcher relationships go, I try to make a better relationship with them. I try to be in there to ask questions and understand how we can make their lives easier with the things we are asking them to do. The last thing we want is to be a pain in the butt for our butchers. They are a critical part of our business and truly our partners.”, said Klitz.
Connecting with Customers
It’s no secret that direct-to-consumer sales have increased since the global pandemic, so how do you make sure your product stands out and that you are connecting with right people? Hannah looks at it as telling a story. She tells the story of her life on the farm and other farmers using social media along with the story of Oak Barn Beef. She also tries to distinguish herself from competition by taking extra steps to ensure meat quality through Neogen DNA testing and Dry Aging the beef at the butcher. Ultimately, people buy from you because they trust you. Think about who your ideal client is and what they are looking for in the product you are selling.
If you are already selling beef directly to consumers and want to grow or want to get started, Hannah has some great resources to share with you. Just contact her through her website oakbarnbeef.com and she will help you get started on the right foot.
