St. Charles, Minn. — Winona County cattle producers Ralph and Filomena Kaehler are a bit “touchy” about their identity-preserved beef business.
“Our customers can reach out and touch the people who produce their food,” Ralph says. “They can shake hands with the breeder, the feeder, the processor and the delivery person.”
Kaehler and his partners have integrated their business to control every step of meat production and distribution — from genetics and breeding to feeding, processing and delivery. They are among a small but growing number of Minnesota farmers who market straight to consumers to get more for their products.
Ralph Kaehler, 41, is a fourth-generation cattleman. He lives on his family’s century farm near St. Charles in southeastern Minnesota, country that is “as close to God as you can get without being in heaven.”
Since 1918, Kaehlers’ Homedale Farms has produced registered Shorthorn cattle, building an international reputation for Shorthorn, Angus and Simmental genetics. Kaehler and his two brothers sell about 100 bulls per season, plus semen, bred heifers and show calves.
The cattle are raised in Cannon Falls, Minn., in a 500-head feedlot owned and managed by partner Dave Kimmes. The third partner, Dave Lindevig of River Falls, Wis., provides nutritional and marketing oversight for the group, which finishes cattle for local cow-calf producers who use Kaehler Farms seedstock.
“We feed a totally balanced ration of forage and grain — no animal byproducts,” Lindevig says. To further differentiate their cattle in the marketplace, they do not use growth hormone implants in the finishing phase.
By controlling genetics, nutrition, feeding and handling, the group produces superior beef that is tender and well marbled, Kaehler says. “People rave about our quality. But (by) selling in the commodity markets, we weren’t getting the benefit of that.”
So in 2001, Kaehler, Lindevig and Kimmes formed a direct-marketing company, KimVig, Inc., to take their beef straight to consumers. “We’re trying to capture the increased animal value at the retail level,” roughly 40 percent over wholesale, Kaehler says.
Geneva Meats, a federally inspected slaughter plant in Geneva, Minn., processes KimVig beef, which is naturally aged for 12 to 14 days and handled separately to preserve its identity.
To cement KimVig’s identity, the group chose a folksy, Minnesota-modest brand. “We thought, let’s just call it what it is: Darn Good Meat,” Lindevig says. He says their first customer was even more emphatic: “I looked at the check and it was made out to ‘Damn Good Meat.’ ”
KimVig’s first direct sales were made through a River Falls youth hockey club, which earned about $1,000 in donations for the meat, and KimVig gained two dozen regular customers. Sales picked up in the summer of 2001 when KimVig partnered with Beskau Home Delivery of Hastings.
The milkman cometh
The Beskau family has been trucking since 1957. Their main service is hauling raw milk, but dairy industry consolidation could shut them out of that market within 10 years, says Mark Beskau, 39, who runs the company with his two brothers.
To diversify, the Beskaus began home milk delivery last year. Popular 50 years ago, home delivery “is making a comeback,” Beskau says. “People are busier now, and they like the convenience.” The business runs one milk truck full-time and another part-time, serving 300 homes and daycares in Hastings, a community of 18,000 southeast of St. Paul.
“The Beskaus were interested in putting meat on their trucks,” Kaehler says, “and we were looking for a way to reach more homes. They have the same values and goals as we do — it’s the perfect fit.”
The delivery arrangement benefits both companies. KimVig stocks the trucks with beef, allowing Beskau to expand product offerings without bearing inventory costs. Beskau, in turn, makes weekly sales calls for KimVig and fills orders.
Beef promo on a budget
Sales of home-delivered meat are running about $2,000 a month, Beskau says. “It’s a very good product. People who try it like it. We’re having trouble getting enough people to try it, though.”
Like most new food companies, KimVig has limited funds for advertising and free samples. “That’s one of our biggest marketing challenges,” says Lindevig, 42, marketing director of American AGCO, a farm services company.
AURI helped KimVig design a coupon promotion to encourage people to try their brand. The Institute also assisted with labeling requirements and KimVig’s marketing plan. The group has been working with AURI’s Dennis Timmerman, who has been an especially good sounding board for ideas, Kaehler and Lindevig say.
Touching the farm
In its first year, KimVig sold 60 head of beef directly to consumers. Eventually, the company hopes to market all its finished animals this way.
The Minnesota Department of Agriculture estimates that at least 29,000 head of beef were sold directly to Minnesota consumers in 2000, up 25 percent from 1994. That is less than 4 percent of slaughtered cattle. Still, says Paul Hugunin, an MDA marketing specialist, “Over the last 10 years, we’ve seen an increase in the number of animals sold directly to consumers.”
Why buy directly from farmers? “The top two reasons we always hear from consumers are quality and taste,” Hugunin says.
Beyond that, Kaehler adds, consumers are looking for assurance on how their food is produced. “We offer our customers not only an exceptional eating experience but an environmental and emotional connection to agriculture. That’s why our slogan is ‘Darn good meat from darn good people.’ ”
KimVig peddles its meat to Yunnan Province
By E. M. Morrison
China is a one-billion-person market, and KimVig wants a piece of it. With AURI’s help, the marketing company is pursuing beef exports to China, where Kaehlers’ Homedale Farms has already established business contacts.
Six years ago, the Kaehler family introduced Shorthorn cattle to Yunnan Province in south central China. Chinese officials bought 40 bulls and 110 bred cows from Kaehler and 20 other Midwest producers. While the deal was being put together, the Kaehlers hosted two trade delegations at their St. Charles farm. “They looked at our cattle and they liked our approach,” Ralph Kaehler says.
The Shorthorns went to China in the fall of 1996. The next summer, Ralph followed to check on the cattle and renew contacts with Chinese agriculture officials.
Last year, Ralph’s wife, Filomena, and son Cliff were part of a Minnesota Trade Office exhibition at the Food and Hotel Show in Shanghai. And this June, Ralph revisited China with Gov. Jesse Ventura. “There’s a lot of interest in our beef — both our genetics and our meat.”
As China becomes more prosperous, demand for beef will likely surge, providing a huge potential market for Minnesota cattle producers, Kaehler predicts. But that is in the future. “This is definitely a long-term effort.”