Company background: Thousand Hills Cattle Company (THCC) shipped its first line of packaged, fresh beef products in January 2005. The company now processes about 1,300 cows annually through its 10,000 square foot facility in Cannon Falls, Minnesota. THCC works with more than 40 family farms throughout the Midwest to meet the growing demand for grass-fed beef. They sell their product to retailers and chefs across the U.S. THCC is organized as a corporation and owned by Todd Churchill, who grew up on a cattle ranch and has extensive business management experience as a consultant. THCC products are packaged, branded and certified by the Food Alliance Midwest as sustainable and Midwest-raised.

Risks identified at early stages: 1. Too dependent on a limited number of customers. 2. Production quality. 3. Inventory management (carrying costs can be high as partner producers are paid for animals at time of slaughter).

Risk management strategies: 1. Diversify the customer base. THCC has more than 70 customer accounts (retailers) with no more than 10% of sales going to any one buyer. 2. Establish stringent production standards to ensure that animal and product quality is maintained. 3. Separate inventory and marketing risk from production risk. Producers should be paid for the cattle when delivered to processor. A branded beef company should maintain sufficient working capital and/or debt availability to handle fluctuations in inventory and receivables. 

Greatest management challenges: 1. Simultaneously educating the producer base about production practices and customer base about product. 2. Delivering on promises to buyers when production volume is slim.