grilled steak

Become a Steakholder: Crowd Cow Disrupts U.S. Beef Business

July 6th, 2017 Posted by shopper experience 0 comments on “Become a Steakholder: Crowd Cow Disrupts U.S. Beef Business”

A Conversation with Founder and CEO Joe Heitzeberg

Do you know where your beef comes from? Do you know what breed it is and how the animal was raised? Do you know the backstory behind the family that owns the ranch? And can you get higher quality steaks and ground beef directly from those ranchers at a price that’s comparable to supermarkets?

Joe Heitzeberg is betting the farm (so to speak) that consumers are ripe for higher quality and more transparent beef products, by purchasing their proteins directly from the rancher through his website and then delivered to your door.

Joe’s company, Crowd Cow, is disintermediating the traditional way beef is purchased with an innovative business model – one that plays deeply to the consumer’s desire to know more about the foods they buy and eat.

We spoke at length about his new approach and how it can potentially change the face of beef sales in America.

What problem are you working to solve at Crowd Cow?

JH: “Crowd Cow is delivering variety and choices consumers don’t normally get at traditional retail. At the conventional supermarket meat counter, you’ll encounter a limited array of cuts and little to no information about breed, how the animals were raised, and what they were fed.

We’re all about transparency – single-origin beef, if you will. So, we answer the question about knowing where your food comes from and sharing the story of the rancher who raised and cared for the animal.”

How is this different than how beef is sold currently?

JH: “The industrial food supply was designed to move large quantities to the retail system as efficiently as possible. Meat packers are concerned about these efficiencies and about cost, more than they care about quality stories. There are four companies supplying nearly 80 percent of the beef sold in America. So, you aren’t going to know where your beef comes from. But consumers have changed and now they want to know everything about the food they eat.

Some companies, for example, are feeding their cows grass pellets so they can claim the cattle are grass fed. This is industrial farming. On the other hand, the small rancher knows their land, treats the animals well, and breeds for quality. We’re tapping into this and bringing it directly to the home kitchen.”

How is this different than visiting a ranch and buying from them?

JH: “Ranchers sell animals, not individual steaks. So, if you buy beef from the farm, most often you’re going to have to buy 550 pounds of meat, which won’t work for most people. And for the rancher, they need to sell all the cuts, or they’re going to go broke. When an animal is ready for harvesting, you need to move it. Selling to a meat packer in the commodity world turns you into a price taker. Working with us enables the rancher to sell all of the cuts at a better price, while the consumer can select the types and amounts they want.”

What enables you to do this?

JH: “The Internet has changed everything. From wherever you live, you can engage with Crowd Cow and watch video or read stories about the rancher and how they raise their cattle and how those animals are treated.

You can point and click on the types of cuts you want and purchase the quantity you’re interested in. We invite consumers to become “steakholders,” so to speak, and we sell portions of a cow until it’s completely gone. We don’t charge anyone until the entire animal is purchased.

We can do this at prices comparable to food retail because we cut out the middlemen. So, you’re getting a higher quality product with transparency about the source at an affordable price.”

What are the challenges to scaling your business?

JH: “Right now we are national and can ship anywhere. Our single biggest challenge is creating a nationwide network of farms that meet our standards for animal welfare and a commitment to quality in how the animals are fed and cared for.

We have ranches involved now on both sides of the nation, and all of our beef is domestic. But we also want to provide unique and special experiences so we’re going to Japan where the highest quality Wagyu beef is raised. There’s a natural marbling unique to that breed you can’t get anywhere else. And, we want to bring it to our customers.”

How do you address food safety concerns?

JH: “We use 100 percent USDA procedures throughout our process. Every single piece of beef we handle will have been touched by USDA inspector presence. And that presence is way higher than in a traditional plant where hundreds of animals are slaughtered every hour. Many of our inspectors are veterans. They’ve done the big plant assignment earlier in their career and prefer now to be working with real people who care about what they’re doing.”

Why do you think you’ll succeed?

JH: “Quality, convenience, choice and transparency. It’s just easy to go online and click to buy. Our goal is not to be a special-occasion option, but an everyday protein purchase. The economics are there for competitive price, better quality and the opportunity to explore the variety of producers and types. It’s not a niche thing.

We are de-commoditizing beef. Key to this and our growth is education. And the Internet enables a rich, multimedia experience with photos and video. You may not know what a Murray Grey breed is, but we can tell you that story. People love to explore.

There’s discovery involved in sampling beef from different ranches – how they raise the beef has an impact on flavor profiles and taste experiences. We provide explanations about the cuts, recipes and preparation guidance, so you have help from us too.”

In sum…

Joe thinks other adjacent businesses may be ripe for this model including seafood, bison, pork and turkey. For now, he’s a beef missionary: “This is fun and exciting because we’re the first to do this. And we’re introducing consumers to a variety of breeds and flavors that may be new to them.”

Collapsing the distance between producer and home kitchen is at work in his model as small becomes the new big; and unique and special overtakes standardized and consistent. To the extent consumers care about meaningful differences, disintermediation could occur in other categories where higher quality, skill, craftsmanship and story matter.

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Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

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