Opening the door to global markets
17 October 2017
The rise of organic beef for export has been an Australian success story, with the product now accounting for the largest proportion – 20% – of Australia's organic export market. But getting the marketing right for a high value product with perceived unlimited demand is not easy, as Clayton and Jackie Sargood discovered.
The Sargoods, who have been organic beef producers since 1995 and have sold their own label, Clayton’s Organic Beef since 2011, found huge challenges.
“If I could start this journey again, I would outsource marketing from the beginning,” Jackie said.
“We know cattle and we’re good at meat, but there are lots of hurdles we didn’t know existed. Marketing has so much influence on how successful you can be.”
The main challenges for the Sargoods have included:
- ensuring correct organic certification along the supply chain, including retailers, in export markets.
- securing reliable markets for a whole carcase and not just certain cuts.
- developing good logistics to reduce input costs.
“One of the toughest aspects of this business is finding and keeping a market that will take the whole body and not just certain cuts,” she said.
From the beginning...
The couple began their organic journey at Clayton’s family property, ‘Manresa’ at Augathella, and quickly found the location – while excellent for producing organic beef – failed the other business tests of good market access, supportive infrastructure and being able to source and guarantee supply.
“We originally supplied OBE Organic Beef and Australian Country Choice sporadically before being approached by another company in 1999 to feed organic cattle,” Jackie said.
“We hoped this new relationship would provide us with some stability but by the time we bought the feed at Chinchilla, transported it to Augathella and sent the cattle to Brisbane for processing, it wasn’t economic.
“Being on a dirt road also caused problems with supply – all it took was a shower of rain and we couldn’t get cattle out.”
If Clayton and Jackie wanted their own organic label to succeed, they needed a property close to markets, with sealed access where they could grow their own feed.
In 2005 they found 'Tulloch Brae', an old dairy, with 121ha under irrigation, 18km from Toowoomba.
Since then, the Sargoods have used Manresa as a breeding block, producing about 2,000 weaners each year, which are then finished to Japanese Ox specs on a home-grown, organic grain ration at Tulloch Brae.
Organic-certified steers (450kg and above live weight) are also bought in to help fill a current US export order of 66 head/week.
According to Jackie, securing a US export deal was a mixture of circumstance, serendipity and hard work.
“In 2010, the organic beef line we were supplying was axed and that was tough for us,” she said.
“The company agreed to kill out what we had but after that, we had nowhere to go other than to sell outside the organic system."
However, the value of building strong relationships came to the fore, with contacts within Thomas Foods International linking the Sargoods with the US east coast supermarket chain, Shoprite.
“It all happened so fast – within a fortnight we were trying to sell our organic beef story to people in New York,” Jackie said.
“It sounds simpler than it was. Shoprite wasn’t certified organic and management didn’t understand what it meant; we helped them through the process of becoming certified.
“Again, this proved to us how important marketing is, particularly in the US. It’s a big deal there.”
Moving into export required a level of licensing, certification and administration that was outside the Sargoods’ expertise and capability.
“We formed a joint venture with Stanbroke Beef in Grantham to process our cattle and, because we don’t have an export licence, they own the meat while it’s on the water.”
Clayton's Organic Beef's US market share has grown year-on-year until recently and remains steady despite strong pressure from rising US domestic supply and Uruguay.
Looking ahead, the Sargoods want to spread their business risk with more focus to the domestic market.
“Local inquiry for our product is increasing. It’s getting easier to source organic-certified stock and we have a lot of faith in Australian organic beef continuing to build market share,” Jackie said.
“Operating in multiple markets would make our business more secure.”
Clayton’s Organic Beef
T: 0427 093 410
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