Omaha Steaks: Carving Out a 21st Century Sales Model

"Our mission is to bring exceptional experiences to bring people together. And we view our primary competitor as any other kind of family gathering around food," primarily restaurants, he says.

Omaha Steaks is in a tight-knit group of family-owned, direct-to-consumer steak companies including Allen Brothers, a Chicago-based family business and Kansas City Steak Company.

Gary Karp, executive vice president at consulting company Technomic, says Omaha Steaks attracts upscale consumers who are looking for more premium cuts.

"In general, consumers are looking at lots of different places. They're shopping at more locations, they're comparing prices, but there is that tier of shopper that wants premium and that's where Omaha Steaks seems to live and do well," he says.

Even if the company doesn't view itself as a grocer, Omaha Steaks' eager adaption to tech trends adds to the company's competitive advantage against grocery stores, discount bulk retailers like Costco (COST) and Wal-Mart Stores (WMT) and restaurants.

Omaha Steaks' busiest state for sales is New York.

"Many specialty food companies sell online as an adjunct to their wholesale business. Others, such as Omaha Steaks, have built their business model on direct-to-consumer sales," says Ron Tanner, vice president of communications at the National Association for Specialty Food Trade. "About 10% of specialty food consumers buy food online. They appreciate the opportunity to discover products which are not available in their geographic area."

Not just steak

Steak isn't all the company sells among its 400 premium products.

Particularly in today's health-conscious times, consumers are seeking not only "locally-sourced" products but leaner cuts of beef and other protein-filled alternatives.

The company answers that demand by offering gourmet chicken and pork. Omaha Steaks is also the largest direct-to-consumer seller of seafood, according to Simon. The company recently rebranded the product line to World Port Seafood in order to expand its distribution and appeal to customers who might not know that Omaha Steaks sells seafood.

"We haven't seen sales suffer because we've been able to answer that need," Simon says.

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