HUNTIN' DAYLIGHT -- CONSUMERS ARE DRIVING PACKER CHANGES

by: Wes Ishmael

Ultimately, consumers determine what enters and exits the harvest facilities of the nation's largest meat packers. Consumer demand determines which meats they'll consume in terms of quantity and price, or if they'll consume meat at all.

Consider that last October Tyson Foods, one of the largest beef and meat packers in the nation, took a five percent stake in a company called Beyond Meat, which is a plant-based protein producer. Think here in terms of a company aiming to make products that feel and taste like ground beef, for instance, made from plant products and no actual meat.

“We're enthusiastic about this investment, which gives us exposure to a fast-growing segment of the protein market,” said Monica McGurk, Tyson Foods' Executive Vice President of Strategy and New Ventures & President of Foodservice. “It meets our desire to offer consumers choices and to consider how we can serve an ever-growing and diverse global population, while remaining focused on our core prepared foods and animal protein businesses.”

According to the Beyond Meat website, current products include the Beyond Burger, “the world's first plant-based burger that looks, cooks and tastes like fresh ground beef…” There's also the Beast Burger, Beyond Chicken Strips and Beyond Beef Crumbles, all claiming ingredients that are GMO-free.

A couple of months after purchasing the stake in Beyond Meat, Tyson made $150 million available to launch Tyson New Ventures LLC. At the time, the company described it as, “a venture capital fund focused on investing in companies developing breakthrough technologies, business models and products to sustainably feed a growing world population.”

“This fund is about broadening our exposure to innovative, new forms of protein and ways of producing food, while remaining focused on our core fresh meats, poultry and prepared foods businesses, which are also experiencing tremendous consumer demand and growth,” McGurk said.

You can likely think of a number of reasons why one of the nation's largest meat purveyors might be interested in non-meat protein. Everything from catering to fringe consumers like vegans and the anti-everything crowd, to developing protein that's more affordable, if in fact that is the case.

Antibiotic Use is a Current Lynchpin

Far as that goes, there's plenty of angst among some mainstream consumers, those who want meat. They continue to want to know more about the product that ends up on their dinner plate, everything from how the livestock was raised to how it was harvested.

“We're currently in the midst of a shift in the marketplace where the culture and conversation around conventional food, particularly online, is changing as consumers navigate which foods to adopt, moderate or abandon,” says Charlie Arnot, CEO of the Center for Food Integrity (CFI). He said that in January, announcing a new research approach—digital ethnography—to, “identify influential consumer groups and the motivations that not only dictate food trends, but drive conversations that impact the decisions of others as they make choices at the grocery store or form opinions about the products, processes, people and brands that define today's food system.”

For the past 10 years, CFI has conducted annual consumer trust research to better understand public opinion and how to engage with consumers to earn trust. The use of antibiotics in food production continues to be a primary issue driving consumer distrust in animal agriculture, according to CFI research.

Meat and food companies like Tyson are responding.

Since 2011, Tyson stopped using human antibiotics in its 35 hatcheries and reduced use in its broiler chickens by more than 80 percent.

Related, insofar as their efforts to reduce the use of medically important antibiotics, Cargill—another of the nation's largest packers—is also making changes.

Last August, Cargill ended the use of gentamicin—an antibiotic used in both human and animal healthcare—for disease prevention in turkeys harvested for its two largest brands. The company emphasized turkeys will continue to receive antibiotics for control and treatment of disease.

Later that month, Cargill introduced the Honest Turkey™ product line, which comes from turkeys that were never treated with antibiotics. You and I could wax philosophic about choosing to describe one product line as honest, thereby suggesting all other product lines are dishonest, but the company left little doubt as to the direction it's heading.

“Eliminating antibiotic use for disease prevention purposes is the next logical step after ending the use of antibiotics for growth promotion purposes, which we began in 2014,” said Jan Hood, head of marketing for the Cargill turkey business. “Based on consumer research and their desire for transparency in food production, we developed the Honest Turkey™ product line, which communicates the turkeys are raised without antibiotics.”

“When needed, we believe the judicious use of antibiotics in animal agriculture helps assure a safe food supply,” said John Niemann, president of Cargill's Wichita-based turkey business. “At Cargill, we remain committed to exploring fact-based technologies as alternatives to antibiotics, and to the reduced use of shared-class antibiotics when the efficacy of a given technology has been proven effective and economical.”

Era Shifting

As for cattle and beef, you might recall that Cargill sold its two Texas-based yards at Bovina and Dalhart to Friona Industries in July last year. The company's last two yards in Leoti, Kansas and Yuma, Colo., were sold in April—pending completion of a definitive agreement and regulatory review—to Omaha-based Green Plains Inc. (GPI), a vertically integrated ethanol producer with existing feedyards at Kismet, Kansas and Hereford, Texas. The Cargill yards being acquired by GPI have a one-time capacity of approximately 155,000 head.

Thus ends what was once known as Caprock Cattle Feeders.

“Selling our two remaining feedyards aligns with our protein growth focus by allowing us to redeploy working capital away from cattle feeding operations to other investments,” says John Keating, president of Cargill's Wichita-based protein business operations and supply chain. “By partnering with Green Plains in a multiyear supply agreement, the Yuma and Leoti yards will continue to supply cattle to our beef processing facilities at Fort Morgan, Colo., and Dodge City...”

In March last year, before selling its feedyards, Cargill announced a 20 percent reduction in shared-class antibiotics—those used for human and animal health—used at its yards, as well as five additional feed yards owned by alliance partners that provide Cargill with cattle. That's about 1.2 million head of cattle annually.

“Our decision to eliminate 20 percent of the antibiotics used in our beef cattle, which are also used for human health, took into consideration customer and consumer desires to help ensure the long-term medical effectiveness of antibiotics for both people and animals,” Keating said.

Keating emphasized animal welfare while reducing antibiotic use.

“We need to balance those desires with our commitment to ensure the health of animals raised for food, which contributes to the production of safer food,” Keating explained. “We have an obligation to ensure that sick animals do not suffer, and that we prevent them from becoming ill, and we will use ongoing research efforts as the basis for any future additional reductions in antibiotic use. We've listened to consumers and our customers, we've taken this first step, and we believe there are more steps coming in the not-too-distant future.”

At the time, Cargill also announced it would increase to 90 percent by 2018 the Beef Quality Assurance (BQA) certified feed yards that supply it cattle.







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