LETHBRIDGE – Will Balog’s fledgling Alberta Beef Co. went into a tailspin on May 20, but the Lethbridge entrepreneur was determined not to lose control of his dream.
In 2001, he conceived the idea of a source-verified, high quality beef marketing machine.
The plan was to work with ranchers, a feedlot and processor to sell meat carrying the Alberta Beef Co. label throughout Canada and the United States via orders made on the phone and the internet.
“The future showed up on our doorsteps eight months ago,” said Balog.
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A case of bovine spongiform encephalopathy discovered in May in northern Alberta closed all export markets to Canadians, and Balog’s plans were frozen. Boneless beef did not start moving back into the U.S. until mid-September. His company has just started filling orders again.
Raised on a southern Alberta ranch, Balog has been in the cattle business all his life as a rancher, auctioneer and now a beef salesperson. He is working full-time to place his branded product in a growing market that seeks high quality, specialty products.
“I knew that one day there would be significant value for a beef product that could be completely dedicated to traceability, accountability and food safety assurance,” he said at the Tiffin lecture in Lethbridge on Jan. 15.
So far, he has 400 ranchers committed to the program. To receive the Alberta Beef Co. label, all cattle come with a signed declaration of being born, raised and processed in Alberta. Those joining the program must keep precise farm and food safety records. They may sell the cattle to his company or retain ownership.
If everything goes according to plan, Balog predicts he’ll need 1,000 ranchers supplying his company with beef. Small operators can join an alliance and could earn a premium selling calves into general markets in the fall.
“Too many sell off their calves and never question what happens or learn what kind of money might have been available,” Balog said.
People boast about the quality of the beef produced in the province, but so far marketing programs have lagged behind the hype.
“If we have such a superior product here, why are we so afraid to let it stand on its own and slap a label on it?”
Cattle designated for the program are fed separately at Highland Feeders in Vegreville, Alta., and processed separately at XL Foods in Calgary. The meat is aged for 28 days and should grade AAA.
Packages of individually packaged, vacuum-packed frozen steaks, ground beef and roasts are available.
Two lines of beef are offered. One is a traditional product while the other is labelled as all natural beef containing no antibiotics or growth hormones.
Balog is able to offer producers a slight premium of about five percent but hopes to increase that to 20 percent over generic beef prices.
He sees the internet as his greatest sales tool. More than 600 million people use the internet and a growing percentage are shopping on-line. His main focus is the U.S. market where annual beef sales amount to more than $35 billion.
Balog is not interested in an overseas market because there are enough customers in Canada and the U.S. to buy all the beef his company can provide.
He also prefers the American market because many are already familiar with branded beef programs, such as the trademark leader, Certified Angus Beef.
He is convinced branded, source-verified beef is the wave of the future. The beef will carry a history of where it came from and how it was processed to assure consumers it is safe and tasty.
To capture that discerning consumer, Balog plans to link with Amazon.com within weeks to sell more beef. This site markets food products and health supplements through its gourmet foods section. About 40 million people purchase products this way every month.
People purchasing a package of his beef receive their orders through Federal Express.
Distribution headquarters are in Montana and New Jersey.
The main market is likely to be the eastern United States with its larger wealthier population.
