The ‘billionaire beat’ reporter for Forbes talks about her new book, why she thinks consumers should be paying more attention to meat industry consolidation, and the starting points for systemic change.
April 17, 2013
The rise in consumer interest in local, sustainably raised meat has meant a world of difference for local ranchers and the restaurants and retailers that source from such operations. Many restaurants in the Bay Area, for example, proudly promote the farms and ranches they work with, and entire butcher shops have sprung up dedicated to the task of selling locally raised beef, pork, chicken, and more. Yet this is only half the story. Getting locally raised meats from the farm or ranch to the butcher shop or restaurant is a complicated logistical undertaking.
Here’s the 30-second supply chain story. First, a local rancher raises a grass-fed steer. The animal is taken to a slaughter facility and now you have a beef carcass – about 500+ lbs. of meat hanging in two big pieces on hooks in a walk-in cooler. From there, it can either go as a half or quarter carcass to a wholesale customer (restaurant, retailer or food service) or be processed (cut and packaged for sale direct to individual consumers or wholesale clients) depending on the needs of the end customer and the type of processing facility used.
For restaurants and butcher shops that specialize in high quality meats, whole, half, and quarter carcasses are the only way to go. With a whole, half or quarter beef carcass, they can dry age the meat for as long as they like and then process it into the exact cuts their clientele demands.
Herein lies the problem: As of February 2013, there is not a single meat processing facility in the Bay Area that will deliver a whole, half or quarter beef carcass to a restaurant or butcher shop. Ranchers aren’t really equipped to make the deliveries themselves. One needs a refrigerated box truck with a meat rail inside of it – something that very, very few ranchers have. Same for restaurants and butcher shops – most chefs and butchers are not in the business of going out and picking up the products they purchase, particularly large bulky items that need to be kept cool at all times.
In addition to the headaches this situation creates for local ranchers, butchers and chefs, a huge educational opportunity is lost by not being able to deliver whole carcasses to local restaurants and butcher shops. John Richter, of Harley Richter Meats, is a butcher who specializes in working with whole carcasses.
He described how detrimental it would be to his business if he had to now start relying on pre-cut packages of meat, or “boxed meat,” for the sausages, pates and other specialties that he prepares for sale at the Marin Farmers Market. “There is always going to be an element of education in a butcher shop,” said Richter, “and the more people who know how to butcher the better.” He works with other butchers and chefs who want to learn the art of butchery and be able to utilize every part of the animal.
The ability to deliver whole carcasses is also critical to local ranches like the Magruder Ranch in Potter Valley, CA. Grace Magruder, fifth generation on the ranch, explained how their “whole animal program” (i.e., selling whole carcasses to restaurants and butcher shops) is an important part of her family’s business.
“When we first started selling whole animals to butcher shops and restaurants, like Chez Panisse, about 12 years ago it was maybe one third of our business,” she said. “Now, it easily accounts for 75 to 80 percent of the ranch’s sales.” Previously, they were able to get half and whole beef carcasses delivered to their restaurant and butcher shop clients.
Now, those carcasses are arriving cut up into smaller pieces because there is no processor that is willing to deliver them whole. Magruder Ranch has had to field complaints from unhappy butchers and chefs that can no longer age and process the meat the way they used to be able to when whole carcass delivery was available. “The care factor is really important to us. We want to work with someone who takes these animals as seriously as we do, who keeps that level of investment, pride and responsibility that we put into them on the ranch all the way through to the finished product,” said Magruder.
So what can be done? The most logical solution is for an existing slaughter facility or meat processor to offer whole animal distribution to local butcher shops, restaurants and retailers. These operations are already in the meat business and used to dealing with carcasses, and it would be a natural extension of their services. However, the profit margins on deliveries are slim and distribution might not be an attractive endeavor for many meat processors.
If distribution isn’t a terribly profitable enterprise, maybe it should just be seen as a cost of doing business. For example, wineries don’t make money off of putting their wine in bottles – it is just something that has to be done to get the wine to the customer. In addition, a cooperative of ranchers, chefs and butchers could take on distribution and fold those costs into the price of the meat.
While this could be difficult to set up, in the long run it would be a business designed by and operated by those who know the product best – local ranchers, butchers and chefs. Here’s to the entrepreneur who solves the distribution conundrum! Your local ranchers, butchers and chefs will be eternally grateful.
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