Where pampered beef cattle generate a niche profit
Niche markets for red meat do not come more specialised than that for Kobe beef, where cattle are fed a ration of cereal laced with beer and massaged three times weekly. But pampering is generating profit for beef farmer Craig Walsh, as Simon Wragg found out.
At a time when most producers are looking to simplify beef production systems to reduce labour and associated costs to protect profits, Craig and Marjorie Walsh have moved firmly in the opposite direction.
Their small, niche Kobe beef unit at Lucies Farm, Powick, Worcestershire, requires the level of pampering normally associated with cup-winning canines rather than cattle.
However, the end product is so good customers are prepared to wait six months to get supplies and pay hefty premium for the privilege.
“It helps that I’m from Hawaii where there’s a large Japanese population and Kobe beef – or Wagyu, meaning cattle of Japan – is commonly imported for restaurants.
“It’s a high quality, highly marbled steak that’s succulent and full of flavour,” said Mr Walsh.
With a background in financial services, Mr and Mrs Walsh moved to the UK in the 1980s and settled in Worcestershire.
“We started out with a few acres on which to exercise our dogs and – having seen the film Rob Roy – bought Highland cattle as aesthetic lawnmowers, effectively,” he said.
The interest in Kobe beef stemmed from home. “Kobe is as generic as Yorkshire pudding – it refers to a product not where it’s specifically produced.
“But, you know, I did a search in Oxford, with all its huge libraries, and only one book was found mentioning Kobe beef.
“It’s the practise from Japan of feeding cattle on cereal and beer – the latter to stimulate appetite – and massaging to replace the exercise as Wagyu rarely graze outdoors due to the demand for land to produce rice.
“And I got to thinking it could be done here in the UK where Kobe is sold by a handful of outlets but is generally imported, expensive to buy and, quite frankly, disappointing to eat. So that’s how we got started,” said Mr Walsh.
A trip to a specialist beef show only served to confirm his suspicions. “Here we had these big industry speakers basically confirming beef producers had no control over the end market for the product so the whole emphasis was on how to produce the stuff cheaper. That’s not our approach – we’re about quality.”
Quality is paramount if the cattle are to generate the premium price paid for Kobe beef, as Mr Walsh explained.
“Fillet sells for £89 per kg and sirloin sells for £44 per kg. Picanha, a cut off the rump described as the culinary equivalent for a man of spending a night with Cameron Diaz, sells for £68 per kg.
“But bare in mind, off a 250kg carcase you only get 2.5-3kg of fillet, 12kg of sirloin, 4-5kg of Picanha, 10kg of rib roasts and rolls and 80-100kg steak mince, and then you can see that it has to be expensive to pay.
“But, believe me, customers are happy to pay if the quality is right.”
Each steer costs £1,100 to buy in and take through to finishing, including all slaughter, cutting, packing and overnight distribution costs. Revenue for sales of Kobe products in the UK is typically £2,500 – but in Japan, Wagyu carcases sell for $12,000-$15,000.
“It sounds great but then we’re rearing these cattle in a Zen-like fashion. How many farmers would go into their beef sheds and massage a steer three times a week? We can’t just drop the steer to a local abattoir – we had to find Eric Robinson in Chasetown, West Midlands, who could handle small numbers, typically three beasts every few months, and trim and cut to our specification. This is a Rolls Royce product, not something off a production line,” he said.
The rearing system revolves around a cereal ration laced with beer in the Japanese tradition, although Mr Walsh said there is ‘little scientific data’ on the ins and outs of the system.
“Some say beer influences the flavour while others disagree. We wanted to honour the Wagyu tradition to buy small kegs from a local micro-brewery, but found it cheaper to get it from Tesco.
“Each animal has a pint poured onto its ration each day and they seem to like it. Steers are taken through to 550kg liveweight at about 21 months old.”
“Big industry speakers basically confirmed beef producers had no control over the end market for the product so the whole new emphasis was on how to produce the stuff cheaper, That’s not our approach – we’re about quality.”
The slow-maturing Highland cattle worked well as they had the natural ability to lay down the all-important intramuscular fat that gives Kobe beef its quality – but they did present the Walsh’s with a problem.
“The problem was with selling it as Scottish Kobe beef. The public know what a Highland calf looks like – hairy and kind of sweet – and they just don’t want to think of eating what they picture in their mind,” he said.
Although by 2002 the Walsh family had one of the largest Highland herds in the UK with 83 head, marketing decisions forced them to switch to Aberdeen-Angus.
“It’s just different – most people don’t even know what an Angus looks like. Either way we’ve gone for purebred cattle each time.”
Despite the majority of Wagyu consumed in Japan being reared in the US or Australia, the Walsh’s attempts at generating interest from UK-based Japanese restaurants for domestic Kobe beef fell flat.
“We explained it’s raised in the Japanese tradition but most outlets were concerned they’d offend their clients more than anything else,” said Mr Walsh.
Instead he used his experience in the e-business world to build not one but three websites that generate orders from customers. “Unlike most businesses that try to ensure they get their company or product in the first 10 listing from a Google search on the internet, we usually occupy at least six,” he said.
When a group of steers is ready for slaughter, an email is sent to existing and new clients with a price list. Orders are filled quickly.
“There’s a lot of demand from London, of course, and from what I call ‘real foodies’ who are looking to serve their friends or family something just that bit special. We can outstrip supply each time without trying.”
Because of that, unlike with most food businesses, external promotion – whether in the form of press articles or food recipes – can be a hindrance.
“We just can’t handle surges in interest as our established customers can easily accommodate what we produce.”
So why not produce more Kobe beef?
“Believe me, I’ve tried,” said Mr Walsh. “I’ve offered dairy farmers – the ideal candidate as they’re always on-site – contracts but they’re just not interested. It may be the massaging that puts them off. There again we’re talking about people in an industry producing milk who can’t be bothered to make cheese.
“It’s a pity because while Kobe won’t make a fortune overnight it does generate a very good income stream as part of a larger business.”
Once matured carcases have been prepared by Mr Robinson, Mrs Walsh faces a frantic few days preparing orders shipped overnight by couriers using gel packs to keep meat chilled.
“We don’t ship overseas – it’s just too expensive,” she said.
The diversity of small production systems does not stop there at Lucies Farm. Having looked at trends in the cuisine heartlands of New York, Chicago and Los Angeles, the Walshes have begun to rear Kurobuta or Black Hog.
“Ironically, as far as Kurobuta is concerned, we live in the Vatican City as this is the home of the Berkshire pig,” said Mr Walsh.
“Again, it is a cereal and beer ration – but instead of massaging pigs we take them swimming.
“Comments suggest it’s the best pork some customers have ever tasted. Demand is not as high as for Kobe beef but then we’re living in a nation of beef-eaters aren’t we?
“We are thinking our time here in England is coming to an end but it would be nice to think before we go back to the States that someone would take up the Kobe beef and utilise the websites and client lists. It’s not mainstream but it is very profitable.”
Livestock - FG