What’s Your Beef? Babbitt Ranches’ Grass-fed Beef

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What’s Your Beef? Babbitt Ranches’ Grass-fed Beef

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Publication Date:
June 01, 2016

Industry:
Food & Beverage

Source:
North American Case Research Association (NACRA)

Billy Cordasco, as President of Babbitt Ranches, was looking for alternatives to his current business model, where calves were born on the ranch, kept on the range for over a year, and then sold on the hoof at the market price. Interest in alternatives to the grain-fed beef offerings of supermarkets was growing. Health and sustainability issues had increased the popularity of grass-fed beef. Beef production and sales were generally low margin businesses, but if consumers were willing to pay a premium price for sustainable grass-fed beef, it might be possible for Babbitt Ranches to respond to the consumer need and increase the firm’s bottom line at the same time. Because of Babbitt Ranches’ financial resources, size, and reputation, numerous business model options existed. Billy needed to brainstorm which business models made sense for Babbitt Ranches. Presented with information necessary to understand the complex beef value chain, financial data on different value chain functions, and several options that were previously considered by Babbitt Ranches, Billy was able to both quantitatively and qualitatively the evaluate taking over one or more of the following functions: slaughter, hanging, processing, distribution, wholesale and/or retail sales. Under consideration was Babbitt Ranches’ ability to acquire or develop the necessary resources for a new business model. Recognizing the opportunity presented by the increasing demand for grass-fed beef and the challenge of a complex beef value chain, Billy’s goal was to limit the number of business model options to those that were feasible so he could put additional resources toward due diligence on a reasonable set of models.

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What’s Your Beef? Babbitt Ranches’ Grass-fed Beef

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