After Patrick Montgomery returned home from serving as an Army Ranger in Afghanistan in 2014, where he tragically lost his fellow ranger and brother-in-law SSG Jeremy Katzenberger, he decided a career in veterinary medicine was his calling.
In preparation, he enrolled in college to get an undergraduate degree in Animal Science. However, after completing his studies, he found that becoming a veterinarian wasn’t calling him as much as it did before.
Trying to figure out his next step, he flirted with working in security since his military background made him a prime candidate for that line of work. But he couldn’t see the mind and body-numbing routine of such a career was a good fit.
After much soul searching and leaning into his college minor in entrepreneurship, he decided starting a business was the right path. With his animal experience and living in rural Missouri, a direct-to-consumer ranch-to-table meat business was it. A trip to a local cattle auction where he purchased a full-blooded Wagyu cow and her calf got the K.C. Cattle Company off the ground in 2016.
“I started the company, so I didn’t have to sit behind a desk. And now I spend the majority of my day sitting behind one,” Montgomery quipped. However, he’d escaped the desk drudgery the day we spoke. His truck driver called in sick and he took the wheel to do the day’s deliveries.
Hot Dog As Hero
As is typical for any entrepreneurial venture, the early days were tough going. “I was literally slinging steaks out of the back of a pickup truck and selling a couple of local restaurants, but we didn’t really have a viable business yet,” he said.
Then the New York Times
NYT
“All of our cash was tied up in the form of ground Wagyu beef in the freezer,” he said. Out of necessity, he decided to turn some of that ground beef into hot dogs, not expecting much but thinking the curiosity factor might help make room for more steaks and premium cuts.
To his surprise, its gourmet uncured all-Wagyu beef hot dog with just a smidgen of natural seasonings became an overnight best-seller after Food & Wine magazine named it one of the nation’s best specialty hot dogs, and the only one that tastes like a steak.
“This hot dog blew us away. The umami! The spice! The beefiness! It was basically like eating a steak in a bun, or an elevated “tube steak,” if you will. The flavor had real depth and smoky undertones, and the texture and color (darker, more brown than red) were different than most hot dogs — in a good way,” editor Bridget Hallinan wrote.
“On August 1, 2019, our phones blew up. We got 4,000 orders rolling in over a ten hour period. We were thrilled but not ready for the onslaught,” Montgomery shared.
Quickly running out of supply, the company was forced to put hot dog orders on back order. The company came clean to customers that it couldn’t meet demand immediately, but most customers were happy to wait. And in the meantime, they also placed orders for steaks and other cuts.
It took eight weeks to work through the backlog of orders, and customers discovered the hot dogs were worth the wait.
“They’ve kept coming back since they knew we keep our word. They were happy to do business with a good company,” he said.
Pandemic Tailwinds
The company got a lucky break from Food & Wine’s recognition, then immediately got another: the pandemic.
Consumers were introduced to the concept of ordering meat online and sales continued to grow for KCCC and across the category. In 2019, only about 14% of consumers had ordered meat online; participation increased to 35% in 2022, according to The Food Industry Association and The North American Meat Institute.
And the category continues attracting converts, especially for specialty producers like KCCC. U.S. e-commerce sales of fresh meat and fish are expected to reach $7.6 billion in 2023 and grow at a compound rate of 13.6% through 2027 to reach $12.6 billion, according to ECDB, a research company that specializes in e-commerce market data.
Should the economy falter in the new year, KCCC is well-positioned to withstand any potential downturn, as it appeals primarily to higher-income customers who have greater financial cushioning than those at lower-income levels. Its four-pack Wagyu hot dogs sell for $12.50, plus shipping, compared with less than $4 for a ten-pack of Oscar Mayer’s at Walmart
WMT
While KCCC specializes in Wagyu beef, it also offers a selection of pork and chicken from high-quality local suppliers, plus a variety of spice rubs, sauces and other accessories to enhance the customers’ dining experience.
About 70% of company sales are made online, some 15% in the company’s Kansas City store, and the rest via wholesale orders. And it’s been testing the waters in grocery stores and sees significant opportunity there.
“Restaurants are not our ‘jam,’ but we have some awesome plans to scale drastically in the grocery direction next year,” Montgomery shared.
As a veteran-owned company that only employs veterans, KCCC has built a strong following in that community. The company also donates funds to Benilde Hall, which serves veterans with emergency housing and other programs. And it invites its customers – called Wagyu Warriors – to include with their purchases an order for a pound of ground beef to be donated to feed the Hall’s in-program residents.
Unpredictable Turns
Setting out, Montgomery couldn’t have imagined a simple hot dog would become an instant hit and become the flagship product for his company which set out to specialize in finer, choice meat cuts. But in hindsight, hot dogs were a perfect disruptive item for the fledgling company selling luxury meats.
Hot dogs are mature product category dominated by a handful of major players that have trained successive generations to their flavor profile. And because hot dogs are so ubiquitous, the concept of a gourmet, luxury hot dog is a non sequitor; a bratwurst sausage, perhaps, but not a hot dog.
K.C. Cattle Company took the ordinary, taken-for-granted hot dog – Americans consume an estimated 20 billion hot dogs per year, according to the National Hot Dog and Sausage Council – and made it extraordinary.
“The meat industry is a convoluted, stuck-in-the-mud market. It’s one we’re trying to shake up and change, including the genetic lineage of our Wagyu beef, our vertically integrated business model and the quality of our meat,” Montgomery said.
“People want quality meat that is responsibly raised. They’re sick of buying commercially-raised meat in the grocery store. A palatable difference comes through in how our animals are treated in our pastures standing on four legs,” he concluded.
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