As meat giants face scrutiny, small and niche producers capitalize

Belcampo, a producer of organic, pasture-raised meats, saw sales more than double in its butcher shop and quadruple online during the pandemic.

Anya Fernald, co-founder and CEO of Belcampo, told Food Dive the company has its own supply chain that already focuses on being transparent with consumers by not including a middlemen to get its meat from farm to table, which helps it stand out as the industry faces increased criticism and strain on its supply and workers. 

As more consumers want to know where their meat came from, she said people are turning to companies like hers who have implemented a “very aggressive approach” for safety and already openly communicate about its supply chain through its website and app.

“Basically a lot of things that we’ve laid the groundwork for, for years, are finding an audience. People are caring about them, they want those values that we’ve invested in,” she said. “To be able to pivot and flex and meet consumer demand, this is a great time to do that. For us, it’s actually a really great moment for the brand and company, honestly, albeit in really challenging circumstances.”

As massive meat plants face challenges with tens of thousands of workers getting sick and criticism from the public about worker safety, smaller protein producers are using this opportunity to highlight their products, which have a more transparent food process, to consumers.

Tyson Foods, JBS SA, Cargill and National Beef are the four largest meatpackers in the country. Those four companies sell about 85% of beef and the pork in the U.S. and chicken markets are similarly controlled by large corporations, according to Ag Web. ​Although the market share will be tough to change dramatically, companies and analysts say that statistic could shift some as more consumers turn away from the big guys.  

“This is really the first time in modern history when we’ve seen any kind of a disruption at this level, so it will be interesting to see if there are some changes,” Cassandra Fish, a meat industry analyst, told Food Dive.

Consumers find alternatives to the meat giants

The issues with meat giants haven’t stopped consumers from buying meat, as sales have jumped as much as 112% across the category during the outbreak, according to Nielsen. But it has led more consumers to shop for local meat.

Mike Dunn, owner of Wormuth Farm, told Food Dive that he was angry when Tyson Foods’ chairman wrote in an advertisement that the supply chain was breaking as a result of plant closures due to the pandemic. Dunn decided to criticize the ad on Twitter, garnering hundreds of likes. 

“As a small poultry producer who services customers in a 100mile radius, the food supply doesn’t begin and end with Tysons. And it ain’t breaking,” Dunn tweeted.

He said he hopes that people will realize there doesn’t have to be just a few big companies in the U.S., and that consumers can have a more personal relationship and get better tasting food with smaller producers. 

“I think that the food giants are a cartel. And I think that cartel was in operation with lobbyists years ago, and they put the screws on small distributors of food, like small meat packers and small farms. And I think people realize that now. What has happened has thrust some of this into the spotlight,” he said. 

Dunn, who sells poultry and eggs in the New York area, said he is preparing to sell his chickens this season and expects more interest. He runs a small operation in White Lake, New York that sold 135 birds last year, but he expects to sell 300 this year. ​

Permission granted by Belcampo

 

More niche meat products are also garnering new interest after losing their traditional outlets. When restaurants and foodservice started to shut down because of quarantines and lockdowns, the lamb industry was hit hard. 

Rick Stott, president and CEO of Superior Farms, an employee-owned American lamb company, told Food Dive that 50% of the lamb goes to the foodservice side of the business and that disappeared in about a week’s time. 

“It has had a pretty dramatic effect. Fortunately, like many other packers in many other segments of the protein industry, the retail ramped up dramatically,” he said. 

The company has had to shift its production. It’s more expensive cuts of lamb, like the rack, is primarily a restaurant product and that demand and price has come down significantly, declining $30 to $40 per head for just one cut, he said. But Stott said it has found new outlets to sell the product at a lesser price, which they’ve had to absorb into their margins. 

“That’s been a big challenge, but at least we’re starting to see some movement of that product out of the packing plant rather than going into the freezer, it’s actually going out the door so that’s a bit of a positive dynamic having to move how we traditionally have sold that product,” Stott said.

Stott said consumers are already turning to lamb when traditional meat on shelves is depleted because of the circumstances. He said 40% of consumers have never tasted lamb and the average consumption is one pound per person per year, but more are giving it a try. 

“We know that because some of our bigger retailers that track their loyalty cards are telling us that new consumers are eating lamb, and that they’re coming back for more,” he said. “The silver lining of this, quite frankly, is that more people are experiencing lamb… we think we’re getting a whole new group of consumers into our product that will be there for many years to come.”

Higher prices during an economic downturn

However, when it comes to cost, smaller meat producers tend to offer more expensive products. Business Insider reported that buying four pounds of organic chicken each week would cost you about $105 more than buying non-organic over the course of a year.

With the economy in a downturn and nearly 40 million Americans on unemployment, not everyone will be willing to pay more for protein. But companies say the pandemic could push people to pay for higher-quality products in the long term and realize the low cost isn’t worth it. 

“I think [the industry] made a deal with the devil on the efficiencies and it’s incredibly cheaper than it’s ever been in history, but I think that comes at a cost: a cost to humans, a cost to animals and a cost to environment. So I’d like to be an agent of change to break up that system because I don’t think it’s serving a long-term picture of human health,” Belcampo’s Fernald said. 


“They’re going to read these horrible stories about how the workers are being treated and be like do I want to pay for that system, do I want to support that, do I feel safe eating that?”

Anya Fernald

CEO, Belcampo


Fernald said that she thinks more people are going to recognize how consolidated the meat supply is and consider the trade-offs that consumers are making to get the incredibly competitive price.  

“They’re going to read these horrible stories about how the workers are being treated and be like do I want to pay for that system, do I want to support that, do I feel safe eating that?” she said.

Across the food industry, at least 22,000 plant workers have tested positive for coronavirus and at least 76 workers have died as the virus has spread among the facilities where people often work shoulder-to-shoulder. 

Dunn said that not everybody will want to pay more than 99 cents a pound for chicken, but he hopes there will be more people who realize they don’t need to buy from the giants. At his farm, he said a customer can meet him, and see how the chickens are raised and treated in an outdoor environment — vastly different from factory farming. 

Unlike chicken and other more common household meats, Stott said the lamb industry doesn’t really see a decline in consumption in recession periods because it’s still such a small consumption in the U.S. and people who people who buy lamb often buy it for a specific purpose so the price sensitivity is less impacted.

Could more small meat producers pop up as a result? 

Fish, the meat industry analyst, said she has heard more people talking about potentially opening smaller chains, butcher shops or packing plants, and there could be some “really good interest” from the consumer in that for the time being. 

Although niche producers could gain more shoppers as a result, it will still be challenging because of the sheer volume and geographical distribution of the major meat producers. “Not just anybody can accommodate that,” she said.

“The majority of people in the United States purchased their protein, either in foodservice or retail, something that came from one of the four largest packers,” she said. “It could be an opening, but I think it would be difficult for, like, Kroger to go that direction just because of their sheer size, just using them as an example.”

Fish said the national supply chain is complex and challenging for smaller, niche meat producers. 

“One of the biggest challenges for niche marketing has really been ‘How do I get that in front of my consumers 52 weeks out of the year.’ It’s that consistent supply that’s challenging for smaller operations as opposed to the big ones,” she said. 

There have also been reported challenges with smaller meat producers being able to keep up with the increased demand. But across the globe, some grocers and e-commerce outlets have been looking into more local meat options for retail. 

As small meat producers rise to the occasion, could this pandemic also change how the big producers act? Fish said the large meat companies are already being “more transparent today than they’ve ever been” as they face COVID-19 challenges and criticism. 

“I’ve been in this business a very long time, they’ve been more forthcoming with information than they normally have been. They’re typically pretty closely held with information. So it has already had the effect of making them more transparent,” she said.​ “So if the question I guess would be will they continue to be more transparent. I would guess they will be to some degree.”



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