Prairie Lamb Cooperative

November 1998
Interview with: John Essame
Goal: Develop markets for innovative, consumer-ready lamb products
Date Established: July 1995
Area Served: Upper Midwest region
Number of Members: 35
Key Challenges: Cultivating consumer demand, building membership, and financing
Helpful Resources: Agriculture Utilization Research Institute, Minnesota Department of Agriculture, and University of Minnesota, Department of Animal Science

Prairie Lamb Cooperative is carefully planning and methodically working toward its long-term goal - the creation of new markets for innovative lamb products. Its membership has continued to grow since the Cooperative’s formation in 1995, although the group has not yet signed a marketing contract or supplied a product. The Cooperative is taking the time necessary to conduct thorough market research, develop products, and ensure adequate supplies before jumping into production and sales. At the same time, Prairie Lamb Cooperative is building a foundation of membership trust and long-term marketing collaboration.

Why market collaboratively - identifying a need and an opportunity

In December 1994, seven Minnesota sheep producers met to discuss what they saw as long-term challenges to the sheep industry. Throughout the United States, sheep producers were experiencing the effects of declining consumption in an already limited market. The number of packers offering slaughter and processing capacity was shrinking. Innovation in product development was minimal. Price stability, already undermined by seasonal lambing, was further threatened by expanding imports. This group of sheep producers recognized the need to supply creative products to new markets.

Exploration of an idea

Not long after their initial meeting, lamb producer John Essame and six others formed a steering committee to explore the potential for a regional lamb processing and marketing cooperative. Almost immediately, they registered Prairie Lamb Cooperative with the Minnesota Secretary of State on July 14, 1995 to begin what would be a long process of product development and to gain access to technical and financial assistance.

The Cooperative’s official mission was clear - to develop and provide profitable market opportunities for shareholding members, who consistently produce high-quality lamb and related sheep products. Easier said than done, Essame says, explaining that "most cooperatives try to corral a piece of an existing market. We’re trying to reform an industry by increasing lamb consumption. We want to connect progressive producers with modern consumers and offer lamb in ways that fit today’s shopping and eating habits."

Drawing on observations made during individual trips to the United Kingdom and New Zealand in 1991 and 1993, the Prairie Lamb steering committee began to consider marketing objectives. "They are years ahead of us in the UK and New Zealand," Essame explains. "Producers are very consumer focused. Closely linked distribution channels allow communication between consumers and producers. Consumption of lamb in the UK is 10 times greater than in the United States, so the British consumer is very discriminating and the industry works hard to protect market share."

In November 1995, Prairie Lamb invited training staff from the British Meat and Livestock Commission to conduct a four-day workshop at the University of Minnesota. Participants learned to completely debone and defat a lamb carcass and prepare many products that are unknown to the U.S. market. At the same time, Prairie Lamb was working with a consultant hired using financial assistance from the Agricultural Utilization and Research Institute (AURI). The consultant arranged for steering committee members to discuss new lamb products with Twin Cities’ restaurants and retailers where the response was very positive.

Membership recruitment and responsibilities

Later in the fall of 1995, Prairie Lamb began to offer "supporting memberships" to Minnesota sheep producers for $100 each. Membership fees were used to help pay for the day-to-day expenses of the organization.

The next year, 1996, kept Cooperative members busy. Informational meetings were held in Rochester, Pine City, Wadena, and Willmar, with a total of more than 250 producers attending. In April, Prairie Lamb members presented the cooperative concept to a large audience at the Wisconsin Sheep Industry Conference. Contact was made with producers in North and South Dakota. Meanwhile, the steering committee was working on the development of bylaws, a business plan, and marketing agreements. "We had to answer many questions one at a time," Essame recalls. According to plans, Prairie Lamb eventually will offer 1 to 10 shares of stock to interested sheep producers. Shareholders will be obligated to raise and deliver 50 lambs that meet the requirements of the marketing agreement for each share of stock owned.

Capital investment needed to develop the concept of cooperative processing and marketing would first require stock offerings and a larger membership. But at that time, the Prairie Lamb steering committee was not ready to launch stock sales. "Before offering stock," Essame explains, "we need to sell the idea of a cooperative to producers in the region. We know that it will take a persuasive argument for producers to change the way they do business." So, through the long winter of 1996/97, Prairie Lamb set aside all work on organizational development and turned full time to product and market development to inform and attract potential members.

Interviews for consultants were conducted through the summer of 1997, and grant applications written, so that a region-wide survey could be made of lamb buyers in the retail and food service industries. In September, a consulting agency was hired and, with funds provided by the Minnesota Department of Agriculture, a survey was conducted of 120 lamb buyers. "The survey provided a lot of useful information while confirming what we already suspected," Essame says. "Lamb represents such a small portion of any distributor’s volume and profit that there is widespread prejudice against it. Traditional cuts are so out of date that few buyers have any idea of how to expand their sales or even believe they can."

Challenges and opportunities

Following the 1997 survey, Prairie Lamb spent many days visiting those who returned positive survey responses. These included retailers in Minneapolis/St Paul area, regional food service distributors, and a frozen food manufacturer. "One problem that we encountered in the survey was that people couldn’t visualize the new lamb products." Essame says, "Also we were told in our meetings that we should come back with sample products in hand. So, much of 1998 has seen work on the development of innovative lamb products. Our goal is to provide lamb in the exciting and convenient ways that are becoming commonplace in traditional and new electronic markets." Once a product line is developed and tested, Prairie Lamb will begin marketing the Cooperative to producers, its future members.

Looking back over the last three years, Essame says the Cooperative’s biggest challenges have been the lack of useful market information and the Cooperative’s broad agenda. "The process has been slow. We are trying to help revive an industry, with no footsteps to follow."

December 1999 update

For Prairie Lamb, 1999 has been a year of focusing further on developing new lamb products, with the decision in late 1998 to focus on oven-ready recipe dishes. In Summer 1999, they conducted a survey of 20 Minneapolis and St. Paul restaurants that serve lamb and sent in four teams of four tasters to report back on more than 50 lamb dishes. Recipes of the top-ranked dishes were then adapted to manufacturing scale. Packaging and labeling are now being developed and the final touches are being added to the business plan. Prairie Lamb now hopes to become the marketing arm of any and all lamb producer cooperatives in the Upper Midwest.

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