The endurance of Niman Ranch

by MEAT&POULTRY Staff
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It’s been an interesting few of years for Niman Ranch, the beef and pork brand that’s iconic in the so-called "alternative" retail and restaurant trade – those stores and kitchens that offer organic, natural and/or sustainably raised products. Personalities have clashed over plans and investment, expansions have been made, investors have come and gone, an acquisition was made the original partners are gone, the founder has even left, yet the company lives on.

Niman Ranch traces its origins to a 200-acre ranch in Bolinas, Calif., that former schoolteacher Bill Niman, whose family had been in the grocery business in Minnesota, bought in 1977 in partnership with journalist Orville Schell. After several years of small-scale operation, the company gained huge publicity in the late 1980s when Alice Waters, the renowned founding chef at Chez Panisse, the famous restaurant in Berkeley, Calif., endorsed Niman-Schell beef and offered it by brand name on her menus. By 1997 the company posted annual sales of $3 million but distribution was still limited. Investors Rob Hurlbut, who came from the coffee business, and Mike McConnell became owner-partners with founder Niman as Schell left to become dean of the graduate school of journalism at the University of California-Berkeley. Investment was also taken from Pacific Community Ventures, and by 2000 sales at the company, now called Niman Ranch, had climbed to $20 million. Sales in 2008 were about $65 million.

But Bill Niman is gone. After growing unhappiness and a shrinking presence at the company bearing his name, he left for good earlier this year after Natural Food Holdings LLC, based in Chicago, which had made a major investment in Niman Ranch in 2006 (and received four seats on the seven-member board of directors in return), acquired what it didn’t already own of the company. At the time of Natural Foods’ initial investment, Niman Ranch was losing approximately $3 million a year despite a sterling reputation and a brand-name presence on some of the finest restaurant menus in the United States. Bill Niman recently told the San Francisco Chronicle that in those years he "consciously deferred profitability to expand the brand," admitting that the plan was "a strategic error."

A big problem was Niman Ranch’s beef side, which according to reports was draining cash even as the company’s pork business grew and thrived. Cattle came from Bill Niman’s own ranch in scenic, coastal Bolinas, Calif., as well as from 35 other ranches; all the cattle were then shipped to a company feedlot in Idaho for finishing. The system was expensive but was the only way, Bill Niman believed, to maintain the beef’s quality.

Jeff Tripician, who is now Niman Ranch’s executive vice president and chief marketing officer, told MEATPOULTRY.com that the new owners have made already made significant changes to the beef side. "The company already had a cutting-edge, industry-leading hog and pork program, but frankly, the beef operation had nowhere near the standards of the hog program. What we’ve done is taken five or six things that weren’t up to those standards and upgraded them."

Niman’s beef is now produced to grade USDA Choice or Prime (no Select). Antibiotics had been used previously, albeit sparingly and only for sick animals; now the company operates on a "never, ever" protocol – sick animals are removed from the program. Perhaps most importantly, at least in economic terms, Niman Ranch now finishes cattle at 25 different feedlots, including some operated by ranchers. The company also source-verifies all of its cattle.

Some of the changes, Tripician admitted, "caused Bill significant distress. But all we did was basically mirror what Bill had been doing already in hogs."

Attempts by MEATPOULTRY.com to reach Bill Niman by telephone and email for comment were unsuccessful by press time.

He recently told The Point Reyes Light newspaper in his home county in California: "Although I left Niman Ranch nearly two years ago, I suspected that something like this would happen as steps that I considered imprudent were initiated by the new owners’ hand-picked management team. This was among the reasons for my departure." He added: "Our goal was always to restore a much more sensible, sustainable, and humane way of producing animal-based foods and without using any man-made compounds to replace good animal husbandry. Regrettably, I do not believe that is the goal of the current management team and owners."

He felt that he had been fighting the battle for a while. In a memo he wrote to the company’s board in 2007, Bill fumed: "The bottom line… is that we once had the strictest feed standards in the industry as well as the highest humane animal treatment protocols. Our standards were always based on several major concerns including: the health and well-being of the animal, human health and the environment." A particular sticking point had become the use of antimicrobials, which the board was pushing over Niman’s strenuous objections. Antimicrobials are not antibiotics – original partner Orville Schell had written the book "Modern Meat" back in 1984, one of the first indictments against feeding subtherapeutic doses of antibiotics and hormones to livestock as growth-promoters – but Niman thought the difference was negligible and told the board so.

Tripician emphasized that "from a quality standpoint, there’s not been one change. And we still are in the business of supporting U.S. family farms and ranches. We don’t do corporate farming. Two and a half years ago we had about 400 hog farmers in our pork program; now we’ve got more than 650. And we will continue to expand that mission, because it drives the company."

He said that the founder’s public unhappiness with Niman Ranch "does put us in an awkward position, especially when we believe we’ve done nothing but enhance the program. First and foremost, Bill Niman built a wonderful company. Nothing he does is ever going to change that."

Bill Reed, CEO of Estancia Beef in San Francisco, which supplies grass-fed beef, some of it imported from South America, to the same market segment that Niman Ranch services, told the Light that Niman Ranch will always be regarded as an important pioneer. "Their greatest contribution to the industry is that they brought a lot of attention to the way animals were raised, and not just from an animal welfare perspective, but also from a quality perspective -- your product is much better tasting," he said.

Since leaving his namesake company, Bill Niman has become involved in goat production; he also raises hogs and maintains an interest in cattle. He sells some of his goat meat to restaurants in Marin County, but the terms of his departure from Niman Ranch require that he not use his last name to sell meat.

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