Academic journal article Journal of Applied Management and Entrepreneurship

A Passion for Beef: Michael Knight and the Australian Meat Industry

Academic journal article Journal of Applied Management and Entrepreneurship

A Passion for Beef: Michael Knight and the Australian Meat Industry

Article excerpt

Executive Summary

Michael Knight, a fourth-generation butcher, began his career behind a meat counter almost 40 years ago. He is now managing director of one of Australia's largest free standing butcher shops, Knights Meats, located in Wagga Wagga, New South Wales, about 275 miles southwest of Sydney.

In 1965, when Knight arrived in the regional center of Wagga Wagga, there were 28 butcher shops serving a local population of 28,000. There are now only 18 butcher shops and meat outlets - including six supermarkets - serving 56,000 people. Michael Knight directs operations at one of the largest free-standing butcher shops in the southern hemisphere. From a partnership with his father, which began in an old warehouse near an industrial section of the city, the business has grown into an operation that sells 8-10 tons of beef each week and six tons of lamb. Asked about a local claim that Knights is the largest butcher shop south of the equator, Knight will only say that he isn't 100 percent sure his shop is even the largest in Australia. But tradespeople who travel the country extensively tell him it's the biggest they have ever seen.

Meat is big business in Australia, which is the largest exporter of beef and veal in the world. Despite restricted access to world meat markets through tariffs and sheer distance, Australia - producing about 4 percent of the world's beef and veal - claims almost a fifth of the world's total exports of all types of meat, including beef, lamb, mutton and goat.1 Most of the 20 million Australians also take time to enjoy some of those products, particularly beef. They spent more than $7.7 billion Australian (about U.S. $5.85 billion) on red meat in 2003, the value of the domestic market increasing by 45 percent in the last five years.2 Meat & Livestock Australia, an industry group, said the increased demand is driven by higher quality products, improved retail presentation, better promotion and the fact that consumers are feeling better about eating red meat.

These factors, and some key entrepreneurial decisions, seem responsible for a history of success at Knights Meats. In 1973, the Knights bought an old building on the north side of Wagga Wagga, commanding a location near an old bridge over the Murrumbidgee River on one of the main roads out of town. The decision to open away from the city center in an industrial area was crucial. Many country and small-town people made the butcher shop their last stop on the way home after a day's shopping. Knights prospered, selling a week's worth of meat to many such families.

Technology changed the way meat was processed, allowing butcher shops to purchase cuts of beef in vacuum packages. This shift gave butchers more flexibility in their marketing and sales techniques because it was no longer necessary to buy an entire carcass from the local abattoir. In the past, carcasses had arrived at the butcher shop containing two of each cut: rump, topside roast, briskets, tenderloin (eye filet, porterhouse), scotch filets, blades and so on. With vacuum packages, the butcher bought greater quantities of what the shop could sell and not purchase cuts customers did not want.

This change also aided the butcher's competition: Supermarkets, which began to gain traction in Australia in the 1970s, could offer pre-packed meat and one-stop convenience for busy consumers. As happened earlier in North America, the traditional Australian butcher shop suffered. In 1984, butchers were the fastest declining segment of Australia's retail industry.3 In Wagga Wagga, supermarkets opened within a few blocks of Knights. The industrial area eventually became the site of homes and apartments for young professional people. These new customers - some health conscious, some in a hurry - demanded more variety in the offerings.

Knight and his father had to adjust the business to meet the shifting environment. Their building (selling floor, cutting area, and storage facilities) has been expanded six times since 1973. …

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