LEXINGTON, KY - The Kentucky Proud initiative has been in place for over nine years working to help Kentucky producers and value-added processors market Kentucky products. As the awareness of the Kentucky Proud brand has grown, so have the challenges that come in meeting market demand for products.
"Our biggest challenge over the years with Kentucky Proud has been distribution," said Roger Snell with the Office for Ag Marketing & Product Promotion at Kentucky Department of Agriculture (KDA). "We haven't had a system in place to get products, especially quality protein, in stores and restaurants from Louisa to Paducah on a regular schedule. Now that has changed."
The Idea
"Over the past several years we have talked with processors about the potential of segregating a line to run Kentucky beef for a branded product," explained Snell. "We kept hearing the economies of scale didn't make it possible, so we were getting discouraged."
That all changed about six months ago when PM Beef contacted KDA to learn more about the Kentucky cattle industry and the Kentucky Proud program. PM Beef, a Minnesota based company, recognized the amount of quality Angus cattle in Kentucky and proposed a pilot project to launch a Kentucky Proud beef line.
Snell explained that KDA was excited about the idea of bringing a Kentucky Proud beef line to consumers and began to collaborate with PM Beef on a pilot project.
"What was exciting was to finally have a processor interested in working with us that would be large enough and have the economies of scale to where we could come back with a product that is perfectly cut and price competitive with a Kentucky Proud label," said Snell.
In selecting the cattle for the pilot project, PM Beef purchased Kentucky source and age verified certified Angus animals through Kentucky owned markets. In explaining why they sourced the cattle through age and source verified sales instead of with individual producer contracts, John Hagerla, PM Beef's vice president of global marketing and sales, explained that they have to have a consistent supply of cattle year round to ensure that the product is in the market, creating a sustainable program and developing customer loyalty.
Once the cattle were purchased they were then shipped to Iowa and finished using a feed ration that incorporated selenium and other feed supplements from Nicholasville-based Alltech. The cattle were then processed by PM Beef and shipped back to Kentucky for distribution.
"PM Beef had scouted out to look at options of who their distributors might be and they choose Critchfield," said Snell. "In working with Critchfield on the Kentucky Proud beef project we began to see the potential to take this branded product beyond the Lexington area."
It was then that KDA and Critchfield brought two other distributors, Brown Foodservice based in Louisa and Southern Foods based in Bowling Green, on board to create the Kentucky Proud distribution team.
The Distribution Team
"We quickly realized these three Kentucky based, family owned distribution businesses had a great synergy," said Snell. "All three of them came together to create an unbelievable partnership to provide statewide reach, statewide distribution, for the Kentucky Proud beef. What is great is that it doesn't have to stop there."
Snell contends that this one project that began as a collaboration to establish a network for the distribution of a Kentucky Proud beef line, has led to what he believes is the single greatest development in the nine years of the Kentucky Proud program. It has brought players together and opened a pipeline from the farmer to the customer that had been blocked in much of the state due to the distribution challenge.
"This is the project where the puzzle pieces all came together to create a distribution team, and the really exciting part is it led by family businesses," said Snell.
It begins with family farms looking for a steady market for their products working with family focused processors like PM Beef. The processed products are then distributed by a network of family owned distribution businesse which deliver the Kentucky Proud products to small family restaurants across the state. Snell believes this system goes to the core of what the Kentucky Proud program is about, helping Kentucky families by promoting local Kentucky Proud products.
"Reaching this point, bringing all these players together, is a direct result of the investment made by the Ag Development Board," explained Snell. "They have given us the tools, through contracts, to work with experts in the field to pull projects and players together."
Snell went on to explain that the contract with John Morris, the Kentucky Proud Retail Liaison with the Kentucky Grocers Association, brought over twenty years of retail experience to the project and was instrumental in helping to develop the buyer contacts. He attributes the recent contract with Rich Laing through KCARD as the final piece of the puzzle in the distribution challenge. Laing was pivotal in the talks with Critchfield on the logistics of pulling in more distributors to expand the KY Proud beef project beyond the Lexington area.
"Rich knows distribution and he came in asking all the fundamental questions," said Snell. "Suddenly everybody started to see the vision of how we could do this, how we could get everybody cooperating, sharing territories, and taking the Kentucky Proud beef line statewide."
The Potential
"What makes this project work for us is that the beef we are receiving is of premium quality," said Mark Critchfield, Vice President of Critchfield Meats. "The consumer is asking for the Kentucky Proud beef, but if PM Beef couldn't provide the quality we expect we wouldn't be working with them on this project."
Critchfield estimates that once the Kentucky Proud beef project is up and running full force they will be able to sell 400 head of beef a week.
That is 400 head of cattle each week that were born and weaned on farms in Kentucky. That is 400 head of cattle each week that were sold through Kentucky markets to PM Beef for finishing. Then those 400 head a week would come back processed to be distributed by Critchfield, Brown Food Supply and Southern Foods, resulting in an estimated $24 million in sales of beef in a year through the distribution team.
"As the largest beef cattle state east of the Mississippi we should be proud to see our beef come back to Kentucky as a branded product," said Buck Greathouse, an angus producer whose cattle were sold to PM Beef for the pilot Kentucky Proud beef project. "It helps raise awareness of Kentucky's beef industry and the impact we have in our communities to the consumers."
Snell sees the Kentucky Proud beef project with the distribution team as an opportunity to renew efforts to bring in new restaurants, new retailers, and new clients to Kentucky Proud.
"I am seeing the interest in the Kentucky Proud mainly in restaurants and convenient store food service," said Wayne Brown, President of Brown Foodservice. "What I see as our bigger role in this collaboration is to get the word out about Kentucky Proud in Eastern Kentucky and our larger distribution network."
"At the end of the day this is going to be bigger than the Kentucky Proud beef line. The distribution team is also networking with Kentucky family farms for chicken, pork, dairy and lamb," said Snell. "We are looking for sustainability and what is good for Kentucky, and we are building relationships and networks that will last. This is what being Kentucky Proud is all about."