N O R T H D A K O TA S TAT E U N I V E R S I T YIsaac AndersonDavid EhlersMylie HermanAudrey MascalMelissa Montgomery Nikki Naas

Calvin ObergThomas PetersonEmily SchubertGarrett StewardHayden StrickerWhitney Toyne

2 0 1 5 NAMA S T U D E N T COMPETITION

LOCAL, GRASS-FED PREMIUM

M A R K E T T R E N D STrendsMedia outlets from cable news networks to local culture magazines and websites are covering the trends that underlie this opportunity. One look at CNN’s Anthony Bourdain’s show, Parts Unknown, or Minneapolis-St. Paul magazine and you’ll see the trend. Even entire cable stations have been created around food. More specifically, these are the trends we’re building our business on:• New food concepts• Foodie culture• International cuisine (a top 3 steak trend according to the New York City Zagat1)• Farm-branded fare

Market Size and PotentialThe market potential for Midwest Marble beef products in the Midwest foodie culture area is plentiful and growing. Our target market customers consume over 209 million pounds of beef in a year. Approximately 18.8 % of that demographic purchases natural/organic beef for a total potential market of roughly 39 million pounds per year2. The stores on which we’ll build our distribution channel have identified themselves with a desire to educate customers and provide a natural product of top quality. There are more than 3,000 grocer options in our target geographies that range from specialized meat stores to organic grocers to local, regional and national grocery chains. Examples of these outlets include Ye Olde Butcher Shoppe, Albertsons, Whole Foods Market, Lund’s/Byerly’s and Cub Foods in the following cities:

Target MarketCentra-Kota’s ideal customer will be the trendy-know-how mom. She knows what she wants and shares her energetic lifestyle with the world by posting her recipes, stories, and quotes to her Pinterest, Facebook and Twitter accounts. They seek out superior products with which to feed their families and entertain their guests. This is the Midwest Mama.

The 1,246,378 Midwest Mamas are composed of married women ages 25-44, an education level of a bachelor’s degree or higher, living in Illinois, Minnesota, Nebraska, Colorado and Iowa with an average household income of $100,000 or more3. These engaging women desire healthy, high-end, superior goods for their families, friends, clients, and neighbors.

Midwest Marble distribution locations were selected based on their Midwest Mama foodie appeal and abundance in metropolitan areas. According to Travel & Leisure magazine, Chicago is the 5th most popular city among the foodie culture, Denver is the 13th, and Minneapolis is the 19th4.

I N T R O D U C T I O NIt’s been a long day of work - a long week - but now it’s social time. The neighbors are over, it’s sunny, and a light breeze carries the scent of freshly cut grass. The steaks are tantalizing. That’s because you chose Mid-west Marble beef. The flavor rolls over your tongue; the tenderness and marbling are simply exquisite. Your guests can’t get enough. Never has the “Kiss the Cook” apron been so deserved.

Innovation, quality, and stewardship are words synonymous with Midwestern farmers. Midwest Marble beef brings the values and tradition of farming in the Midwest straight to your table. The high quality of imported Waygu beef intertwined with the speed and efficiency of growing lowline beef cattle results in a product that beautifully delivers an intense natural experience that tingles taste buds but doesn’t lighten billfolds. Centra-Kota Cooperative will serve the farmers of its community by creating a unique opportunity to provide premium beef and consistent service at reasonable prices.

The foodie culture is a fast-growing phenomenon in large Midwest cities like Chicago and Minneapolis-St. Paul. Multiple annual foodie conventions are signs that these areas are primed and ready for new and exciting food products with a back-story and fantastic flavor. Centra-Kota presents this marketing plan to capitalize on this growing trend, maximize profits for our farmers and partners, and increase growth potential. Soon Midwest Marble will be a household name associated with superior taste and quality.

• Chicago, IL• Minneapolis-St. Paul, MN• Rochester, MN

• Omaha, NE• Lincoln, NE• Denver, CO

• Colorado Springs, CO• Boulder, CO• Des Moines, IA

1. “The 8 Hottest Steak Trends Across America.” The 8 Hottest Steak Trends Across America. N.p., n.d. Web. 25 Feb. 2015.

2. Lauren Gwin, Catherine A. Durham, Jason D. Miller, Ann Colonna. “Understanding Markets for Grass-Fed Beef: Taste, Price, and Purchase Preferences.” Food Distribution

Research Society (2012): 21. Web.Brown Hunt, Katherine. “Meet Our Local Experts.” Travel Leisure. 1 Sept. 2011. Web. 26 Feb. 2015.

3. U.S. Census Bureau. American Community Survey. 2012.4. America’s Best Cities for Foodies. (2011, September 12).

PA G E 1 : : LO C A L , G R A S S - F E D P R E M I U M B E E F

A U D I E N C E P R O F I L EThe North Dakota State University NAMA Chapter is proud to present a comprehensive marketing plan for the new beef crossbreed, Midwest Marble. This plan is presented to the board of directors of the Centra-Kota Cooperative, Bismarck, North Dakota. The board is comprised of eight industry advocates representing twenty organic, grass-fed beef producers positioned around the state of North Dakota.

LOCAL, GRASS-FED PREMIUM

M A R K E T A N A LY S I S CONTINUEDCompetitive ProfileOur target consumer shops for entirely grass-fed, all natural, and organic beef. Due to the efficiency gained from cross-breeding Wagyu and lowline beef, Midwest Marble beef will provide a high quality and fairly priced alternative to beef supplied by other holistic beef producers.

Within our targeted market, in which 39 million pounds of premium beef are currently purchased annually, we’ve defined our direct competitors as producers of British (Angus, Herford and Shorthorn) or Wagyu breeds. Centra-Kota sees this market as one with reasonable barriers to entry characterized by a limited number of competitors supplying a rapidly growing market. From a start-up perspective, our growth plan is aggressive, however; our market share objectives are very achievable in light of a strong growing market. Our price point makes this product more accessible to a broader audience. The following chart illustrates our projected market share at the end of year 3:

Producer Breed USDA Grade Product Ribeye $/lb.

Midwest Marble W-L CH-PR 724,000 $25.00

Country Natural A, H, S CH 1,687,000 $17.99

Panorama Meats A, H, S CH-PR 360,000 $28.66

Double R Ranch A, H, S CH-PR 1,139,000 $15.99

Grass Run Farms W PR 1,125,000 $78.00

A: Angus, H: Herford, L: Lowline, S: Shorthorn, W: Waygu, PR: Prime, CH: Choice

STRENGTHS WEAKNESSES

– Unique product– Background story– Flavorful and desirable marbling

– Biological expansion limitations– Narrow niche market– Existing breed/brand loyalty

OPPORTUNITIES THREATS– Trending foodie culture– Potential alternative markets– Relatively new product

– Weather– Disease– Competitor pricing adjustments

5. Agri Beef Co. 20156. American Grass Fed Beef. 20.2.2015.7. Country Natural Beef. 2015.

8. Grass Run Farms. 2015. Web. 9. Panorama Grass-Fed Meats. 2015. Web.

B U S I N E S S P R O P O S I T I O N

Product DescriptionMidwest Marble combines the desirable marbling trait (taste-enhancing intramuscular fat) of the Wagyu breed with the efficiency (one-third less production time) of the Lowline breed to provide a premier flavor profile at a competitive price.

Strategy StatementTo increase member income Centra-Kota Co-op will provide a consistent supply of premium quality beef to foodie and upscale grocery stores. Midwest Marble beef will be enthusiastically purchased by health conscious, selective customers who care about the story of where their food comes from and are willing to travel to purchase it.

Goals 1. 90% Customer Awareness among

Midwest Mamas by Year 3 2. 724,000 lbs. of beef sold in Year 3 3. Profit Margin of 12% in Year 3

Assumptions 1. All meat produced will be of a uniform quality 2. Midwest Marble beef meets all the requirements

to obtain: all-natural, grass-fed, free-range and organic labels 3. Meet or exceed minimum USDA breed, branding, and grading requirements

PA G E 2 : : LO C A L , G R A S S - F E D P R E M I U M B E E F

Competitive Market Year 3

Market Share (lbs./year)

PromotionCHANNEL PUSH• Business representative teams will demonstrate the benefits of the current price

point utilizing sales tools and ensuring their availability to answer questions.• A smart phone QR code reader application will be used to source desired

information to stimulate consumer purchases.• Supermarket weekly ads will feature “Midwest Marble” beef, as the lead steak for

the week.• Centra-Kota will provide cooking demonstrations with grilled steak samples at

point of purchase locations with co-op personnel who will additionally provide educational materials and visit with consumers.

• In-Store Promotions will capitalize on the design team’s capability to draw in customers utilizing resplendent photos and tag lines to entice shoppers with the homegrown back-story.

DEMAND PULL • Website: The co-op’s website will show the cuts of meat, prices and where to

find them. It will have a link to the background story of all ranches producing Midwest Marble beef.

• Trade Shows: Traveling business representatives will bring our product to potential customers at the Minneapolis Home and Garden, Des Moines H&G, Denver H&G, Chicago IG and others.

• Social Media: Centra-Kota will pursue multiple social media approaches to build end-user demand, including paid positioning on several food blogs, organic content publishing, and paid posts on social channels such as Facebook, Pinterest and Twitter to build awareness.

The selected food blogs cater to a similar demographic as Midwest Marble beef. They provide recipes and/or link customers to smart phone apps with dishes emphasizing beef.

A C T I O N P L A NProduct Positioning and PackagingMidwest Marble beef is a premier quality beef enjoyed at home at an affordable price. In addition to being aesthetically pleasing, the product packaging will be designed to build the relationship between the co-op, producers of Midwest Marble, and the customers. By providing a QR scan code customers will be linked to the co-op website where they can learn the back-story and production methods, recipe ideas, and more. The black background of the packaging is classically designed to accent the desired meat’s bright red color and Midwest Marble beef’s green labeling.

Price

Cut Price/lb.

Tenderloin Filet (Roast, Steak) $55.00

Ribeye (Roast, Steak) $25.00

Loin Strip (Porterhouse, T-Bone, Top Loin Steak) $16.25

Tri-Tip [Sirloin] (Roast, Steak) $13.75

Flank (Skirt, Steak) $12.50

• Chuck (Roast, Steak, Eye Steak, Blade/Shoulder Steak) • Rib (Roast, Steak, Back Ribs) • Round (Top and Bottom Steak, Tip Steak) • Shank (Cross Cut, Brisket)

$10.00

Ground Beef $8.00

PlaceThe distribution network will develop from the 3,030 grocery stores in the target cities that are publicly acknowledged for supplying specialty, organic, natural, and/or health foods. This network will grow from 129 stores in Year 1 to 301 stores in Year 3. Specialty meat stores and smaller grocery stores will be targeted to take advantage of the owner/operator’s ability to make supplier decisions. Simultaneously, grocery chains will be targeted in order to gain the advantage of access to multiple outlets. This calculates 10% of potential stores selling an average of 48.3 pounds per week.

Stores Lbs/yr.Year 1 129 362,000Year 2 219 543,000Year 3 301 724,000

Food Blogs10 Total Page Views Cost (5 Months)

Foodista 490,000 $4,250

Matt Bites 30,000 $553

Goodlife {Eats} 240,000 $340

Simple Bites 460,000 $765

This Week for Dinner 110,000 $553

Big Oven 130,000 $595

$7,056

Year 1 Year 2 Year 3

PA G E 3 : : LO C A L , G R A S S - F E D P R E M I U M B E E F

CHICAGOMINNEAPOLIS, ROCHESTER, LINCOLN, OMAHA

DENVER, BOULDER, COLORADO SPRINGS, DES MOINES

• Print Media: These strategically selected magazines mirror the locations of our target market, making them ideal for promoting brand awareness.

• Events: From booming state fairs to intimate tastings, a 16-destination promotion schedule has been selected for high-volume sampling to launch the product to potentially more than 7 million food enthusiasts.

Year 3: Marketing ExpensesPromotion Fee

Brand Identity/Development $10,000Media Plan $863,000Advertisement Design/Production $47,500Photography/Video $20,000

Trade Shows/Events $88,000

Collateral $34,500Digital Real Estate $29,000Public Relations $61,500Distribution Support $200,000

Total $1,353,500

Venue City Attendance Fees

Aquatennial 14 Minneapolis 800,000 $250

MN State Fair 10 St. Paul 1,824,830 $1,800

Nebraska State Fair 13 Grand Island 317,785 $1,135

Thursdays on 1st and 3rd 13 Rochester 5,000 $250

Taste of Omaha 13 Omaha 100,000 $420

Healthy Farmers Conference 13 Kearney 20,000 $100

Iowa State Fair 11 Des Moines 1,015,000 $420

World Food & Music Festival 12 Des Moines 70,000 $1,150

LLL BBQ, Bands & Brews 13 Loveland 50,000 $255

Taste of Colorado 15 Denver 500,000 $300

Taste of Greenwood Village 16

Greenwood Village

1,225 $455

Taste of Pearl 17 Boulder 500 $720

Taste of Chicago 18 Chicago 1,500,000 $33,250

Illinois State Fair 19 Springfield 900,000 $1,700

Holiday Food Gift Festival 13 Colorado Springs 15,000 $1,150

Colorado State Fair 13 Pueblo 500,000 $1,000

7,619,340 $45,055

F I N A N C E SOur gross sales dollars in years 1, 2, and 3 are based on the sale of 1000, 1500, and 2000 head of Lowline-Wagyu cattle respectively. Centra-Kota Co-op’s 20 cattle producers will raise Midwest Marble beef to harvest weight and ship them to a federally inspected processing facility in Aberdeen, South Dakota. Upon delivery the producers will receive a 25% premium over market price for their cattle.

Cost of goods sold includes purchase of live cattle, live and retail shipping, processing fees, USDA inspection and quality grading, and packaging costs. Midwest Marble beef will then ship to our select grocers up to 750 miles from Aberdeen.

The expenses include all marketing and advertising, operating expenses, travel, and employment and benefits for sales, events, and office staff. Following the production and promotional expenses, co-op producers will see a patronage dividend of $16,400 in the third year on top of the 25% premium price upfront.

Midwest Marble Income

Statement Year 1 Year 2 Year 3Gross Sales $4,112,250 $6,168,375 $8,224,500

Net Sales $4,112,250 $6,168,375 $8,224,500

COGS $2,427,270 $3,640,905 $4,854,540

Gross Margin $1,684,980 $2,527,470 $3,369,960

Expenses

Marketing $656,000 $946,000 $1,353,500

Payroll/Benefits $528,000 $590,400 $604,800

Ins./Rent/Util. $41,416 $56,225 $54,970

Travel $42,000 $43,500 $44,000

Total $1,267,416 $1,636,125 $2,057,270

Net Income $417,564 $891,345 $1,312,690

Patronage Dividends (25%) $104,391 $222,836 $328,173

Net Income Less Patronage $313,173 $668,509 $984,518

Profit Margin 7.6% 10.8% 12.0%

10. CONCESSIONS & EXHIBITS - Becoming a Vendor.” Minnesota State Fair. N.p., n.d. Web. 1 Feb. 2015.

11. “Commercial Space.” - Iowa State Fair. N.p., n.d. Web. 1 Feb. 2015.12. “Sponsor.” World Food and Music Festival. N.p., n.d. Web. 1 Feb. 2015.13. Federated Media Publishing (Ed.). (n.d.). Explore Sites. Retrieved March 8, 2015. Federated

Media Publishing (Ed.). (n.d.). Explore Sites. Retrieved March 8, 2015.14. “Get Involved.” Minneapolis Aquatennial. N.p., n.d. Web. 1 Feb. 2015.15. “PARTICIPANT INFO.” A Taste of Colorado. N.p., n.d. Web. 1 Feb. 2015.

– Chicago– Chicago Home & Garden– Colorado Expression– Colorado Gardens– Taste of Colorado– Midwest Living– 417 Home (MW)– Spaces (CO)

– Homes and Lifestyles (TC)– Best of the Twin Cities– Twin Cities Family Times

(Nook)– Eat This Not That (Nook)– Working Mother (Nook)– Homes & Antiques (Nook)

PA G E 4 : : LO C A L , G R A S S - F E D P R E M I U M B E E F

M O N I T O R I N G A N D M E A S U R E M E N TMidwest Marble will gauge the efficiency and effectiveness of this marketing plan by monitoring and measuring the following: profitability, customer awareness, and sales. The most emphasis will be placed on customer awareness, due to its role in driving the other two qualitative measurements. Customer awareness within the target market will be analyzed through data collected from all technological based advertisements and reviewed to ensure return on investment.

Monitored Goals Methods Contingency Options

Brand/Customer Awareness 90% Midwest Mama Awareness by Year 3

Monitor platform-specific social interaction KPIsEvaluate strengths and weaknesses of advertising based on online feedback

Utilize Google Analytics to track other online brand activity

Focus efforts toward lowest selling regions

Sales 724,000 lbs. of beef sold in Year 3

Closely monitor early sales to ensure feasibility of year three goal

Adjust the product’s price and positioning to align with demand

Review quarterly sales growthAdjust marketing strategies for

under performing segments

Profitability 12% Profit Margin in Year 3

Analyze monthly and quarterly financial reportsAdjust production, distribution and

margins to align with demand

Evaluate high margin opportunities within our region

Divert portions of profits to increase retail visibility

C O N C L U S I O NWhen a bad day has got you down, lift your chin up and don your “Kiss the Cook” apron because

soon you will be enjoying the tantalizing taste of a Midwest Marble steak. What is better than

sitting with friends and family enjoying a magnificent Midwest Marble steak? Nothing, because

from farm to fork we are raising the steaks!

16. “Food.” Taste of Greenwood Village. N.p., n.d. Web. 1 Feb. 2015.17. “Taste of Pearl 2015.” Downtown Boulder, Inc. N.p., n.d. Web. 1 Feb. 2015.18. Slowik, Mary, Program Director. “Taste of Chicago.” Message to the author.

4 Feb. 2015. E-mail.19. “Vendor Applications.” Illinois State Fair. N.p., n.d. Web. 1 Feb. 2015.

PA G E 5 : : LO C A L , G R A S S - F E D P R E M I U M B E E F

We believe that a consistent dialogue with each retailer is essential to ensure brand awareness. Should grocery endeavors provide unsatisfactory results, Centra-Kota will expand the initial market by promoting to up-scale fine dining locations. Should the endeavor exceed expectations, the market expansion will be re-calibrated (scaled back) accordingly to ensure continuous supply to existing demand.