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How granular should I get with Keyword research?

Keyword Research

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clarasboutiqueusa Subscriber last edited by
I'm doing KW research for a new business. My understanding from KW research guides:
1. Use tools to create a list of thousands of keywords
2. Analyze difficulty and search volume
3. Reduce your list and do on page optimization for your select KWs
My dilemma with this approach is that it seems "keyword based" rather than "intent" or "category" based. e.g. Let's say I have a grocery store. Ignoring SEO, I know that these are my main categories:
- Produce
- Meat
- Dairy
- Canned Goods
- Baked Goods
In other words, the above categories are the general "intents" and "categories" that I'd really want to rank for. Keyword tool shows that they have high volume and high difficulty.

Let's say that after doing keyword research, I discover "Low Fat Chicken Breasts" and "Turkey Sausage" and "Cheap Meat Wholesale" have decent search volume and low competition. I don't quite understand how I'm supposed to utilize these fringe keywords in my on page SEO plan because it doesn't make sense as a human to categorize my site that way.

Not sure if this is clear. Basically I'm trying to figure out if I should really be getting this granular on keywords to help guide my store categories or if I should just be picking broader terms.
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