Putting Value Back in the Putting Value Back in the Value ChainValue Chain

Allen R. Williams, Ph.D., PASAllen R. Williams, Ph.D., PAS

Tallgrass Beef CompanyTallgrass Beef Company

• Source Verified

• No Fed Antibiotics

• No Added Hormones

• No Animal Byproducts

• Grass Fed – No Grain

Verifiable ProtocolsVerifiable Protocols

• Heritage Genetics

• Ultrasound Selection

• Annual Ranch Visits

• Producer Affidavits

• Source Verified

• Strict Protocols

• Network of Producers

Tallgrass FeedlotsTallgrass Feedlots

• Rotational Grazing

• Forage Sequencing

• Non-Confinement

Product AttributesProduct Attributes

• Omega 3, CLA, Vit. E

• Favorable Unsaturated to saturated fatty acid ratio

• Lower E. coli, campylobacter

• Environmentally Friendly

• USA Family Farms

• Healthy Animals, Healthy Environment, Healthy People

Tallgrass Value Chain Tallgrass Value Chain SystemSystem

Preferred Seedstock Genetics

Cow/Calf Producer

Custom Grazer/Finisher

Selected Processor

Distributor

Retailer (Grocer, HRI)

E-Commerce

Data Sharing Loop

Tallgrass ChallengesTallgrass Challenges

o Lack of InfrastructureLack of Infrastructureo Forging Partnerships within the Forging Partnerships within the chainchain

o Economies of scaleEconomies of scaleo Ability to grow effectively and Ability to grow effectively and efficientlyefficiently

o Maintaining and even improving Maintaining and even improving product quality as you growproduct quality as you grow

o Trust at all levels – from producers Trust at all levels – from producers to consumers.to consumers.

Tallgrass PhilosophyTallgrass Philosophy

o Forge Strategic Partnerships throughout Forge Strategic Partnerships throughout the VBVC.the VBVC.

o Don’t seek to reinvent wheel where not Don’t seek to reinvent wheel where not necessary.necessary.

o Complete data sharing.Complete data sharing.o Risk/Reward transparency and sharing.Risk/Reward transparency and sharing.o Relationship and trust based.Relationship and trust based.o Identify and work through Identify and work through

problems/issues WITH strategic problems/issues WITH strategic partners, not against them. partners, not against them.

o Constant communication/feedback with Constant communication/feedback with retail partners and CONSUMER.retail partners and CONSUMER.

Value Chains – AFF Point of ViewValue Chains – AFF Point of View

o Support development of regional based food Support development of regional based food production and family farms.production and family farms.• Must be based in a relationship among suppliers Must be based in a relationship among suppliers

across VC.across VC.• Includes much more than price.Includes much more than price.

o Relationship must be “Values Based”.Relationship must be “Values Based”.• Shared economic risk/reward.Shared economic risk/reward.• Fair treatment of employees.Fair treatment of employees.• Clearly defined product attributes.Clearly defined product attributes.

o This Values Based relationship benefits everyone This Values Based relationship benefits everyone involved, including the CONSUMER.involved, including the CONSUMER.• Values can be verified/certified by independent Values can be verified/certified by independent

third party.third party.• Values can be clearly communicated to the Values can be clearly communicated to the

consumer.consumer.

Value Chains – AFF Point of ViewValue Chains – AFF Point of View

o Consumers/Purchasers of Values Based Consumers/Purchasers of Values Based Value Chain products must be an Value Chain products must be an integrally involved group. They are the integrally involved group. They are the DRIVER. DRIVER. • Consumers must have information necessary Consumers must have information necessary

to determine differentiation among products.to determine differentiation among products.• AFF proposes a web based communication AFF proposes a web based communication

tool to augment/compliment direct tool to augment/compliment direct communication.communication.

• Consumers wish to purchase products they Consumers wish to purchase products they can TRUST.can TRUST.

• Consumer driven differentiation provides the Consumer driven differentiation provides the competitive advantage that VBVC’s need to competitive advantage that VBVC’s need to survive and thrive.survive and thrive.

SummarySummary

o All successful VBVC’s have been built by All successful VBVC’s have been built by catering heavily to the consumer.catering heavily to the consumer.

o VBVC’s must establish constant dialogue VBVC’s must establish constant dialogue with the consumer through variety of with the consumer through variety of media.media.

o Capacity building is important, but must Capacity building is important, but must lead with the consumer, not with lead with the consumer, not with capacity building. Many have gone capacity building. Many have gone bankrupt that way.bankrupt that way.

o TRUST is the key word. Consumers must TRUST is the key word. Consumers must trust that the products we are providing trust that the products we are providing do provide the attributes they seek.do provide the attributes they seek.

Thank YouThank You