Laura's Lean Beef
by Keith Richards 
(This article was originally printed in Southern Sustainable Farming, issue no. 7, September 1995, published by Southern SAWG.) 

Laura's Lean Beef, of Lexington, KY, has been one of the outstanding business successes in a field littered with failures. Begun as a value-added enterprise on Laura Freeman's eastern Kentucky farm thirteen years ago, her company has grown into a $20 million a year business.

Farmers contract with the company to produce low-fat, hormone- and antibiotic-free beef raised to exact specifications. The steers start on grass, usually at a Kentucky or Tennessee family farm, then are shipped to small feed lot operations in Ohio or Indiana for finishing. Laura's oversees production from start to finish, and markets the packaged beef directly to grocery store chains in 18 states from New York to Texas. 

How She Began 

Laura says, "I came back to the family farm in 1982. Basically it was a cow-calf operation with a tobacco base. That's what we can raise out here. There aren't a lot of options." Her mother had a feeder operation going that wasn't doing too well financially, so Laura figured she would come up with a product to market direct to the local stores.

When she set her goals for production, Laura says, "I knew a primary goal ought to be to control the price of the product." Her second goal was to keep it free of antibiotics and growth hormones because she believed in raising animals that way. And she knew not all consumers were aware of chemical issues, so "low fat had to be part of it to sell in this part of the country."

Laura started selling beef raised on her farm to grocery stores, but quickly ran into difficulty balancing the demand for certain cuts with the limitations of producing a few whole cows. She says, "I kept thinking I could do it on a one farm scale, (but eventually) I realized that I had a puzzle where the pieces didn't fit in." 

Economics Forced Larger Scale 

"The economics of grocery stores forced me to get larger than one farm could produce," she says. "It was strictly an economic decision to get to that volume." Once she realized this, she developed her business at a grocery store warehouse scale.

Expansion can often kill a thriving small business. Laura avoided failure as she expanded by clearly defining and controlling the quality of her product, and by adding John Tobe as her business partner. Even though she had taken accounting courses to strengthen her basic business sense, Laura says, "We made sure we got a business partner, not so much for the capital, but for the business expertise. John helped us establish controls for the company and accountability through budgets."

Also, as she expanded by contracting with other farms for production, she stayed with what she knew and avoided big capital outlays. "We are basically a marketing company. We don't own a packing plant." Instead, they have a lease arrangement with a plant in Indianapolis.

Laura feels two personal traits have contributed to her success. "I like selling. I think a lot of farmers aren't comfortable with that. And this may come from being female, but I really listen to what customers want." She hasn't tried to force something on the marketplace without listening to consumer response. 

Back Home on the Farm 

Even though her company took a different route, Laura believes farmers can definitely make a living on a one-farm scale. As long as you are in the $50-60,000 per year range, you can stay in the niche markets. But when you go beyond that scale, you have to participate in the mainstream.

On her own farm, Laura and her husband Doug Fowley still raise cattle for Laura's Lean Beef. The cow-calf operation provides a steady income base. Slowly, they are layering on alternative enterprises like lambs for direct sales and free-range chickens. And their 11-year-old daughter Alice has a good little egg business.

As she runs through LaGuardia Airport on the way to another business meeting, Laura sometimes thinks about the irony of her dual worlds. She feels the tug of desire to live a simple life on her farm with Doug and Alice, then the challenge of running a strong, farm-based business pulls her on.