Sept. 4, 2012
by Larry Aylward
Tyson Foods, one of the largest meat and poultry processors in the world, has gone local.
Earlier this year, the Springdale, Ark.-based company announced that its fresh meat facility in Pasco, Wash., was producing its Open Prairie Natural Angus Beef within 60 miles of where the cattle are raised to meet growing demand for local foods in the Pacific Northwest. Tyson jumped on the “locally grown food” bandwagon, which has been rolling happily down the road for the past several years.
“Increasing the supply of Open Prairie Natural Angus beef will help us meet the growing demand for premium-quality natural beef that has had no hormones administered and no antibiotics added,” Kent Harrison, Tyson’s vice president of marketing and premium programs, said when the new was announced. “We are especially pleased to produce beef so close to where it’s sourced. Keeping things local reduces transportation, minimalizes animal stress and helps produce high-quality beef, naturally.”
Darren Tristano, executive vice president of Technomic, a Chicago-based food research firm, says Tyson’s move is “an indication that the company wants to be a leader rather than a follower” in the burgeoning locally grown food segment.
Many consumers believe locally grown foods, including meat and poultry products, are healthier, better tasting and safer to eat. However, what they base those beliefs on may be pure subjectivity.
Nobody knows the true definition of “locally grown food.” Does the food come from 10 miles away? 100 miles? Wal-Mart considers food locally grown if it comes from the same state as one of its stores. (Incidentally, the eastern and western borders of Texas are nearly 900 miles apart.) According to a report by Technomic, most people think of locally grown food as having come from no more than 50 miles away.
No matter where it’s from, one can’t deny that the locally grown food movement is thriving. According to a recent US Dept. of Agriculture report, sales of locally grown food were expected to total $7 billion in 2011, up from $4.8 billion in 2008. The total includes local foods that are sold directly to consumers at farmer’s markets, through grocers and at restaurants.
Method behind the trend
There are several factors driving the movement, but the biggest reason is that consumers want to know where their food originates, Tristano says.
Spencer Grundhofer, owner of Grundhofer’s Old-Fashioned Meats in Hugo, Minn., says consumers are more interested in knowing where their meat and poultry came from than they were five years ago. When buying beef, many of his customers want to know how the beef was fed and finished, says Grundhofer, whose business sells steak, sausage, ground beef and bratwurst, among other items. Customers want to know if the cattle received any antibiotics or hormones, two factors that they also associate with being locally raised.
Grundhofer’s chicken processing business is flourishing, especially for people raising their own chickens.
“We offer custom processing where we go out to people’s houses and do the processing,” Grundhofer says. “We have more people than we can service.”
The business is bursting because people know exactly where the poultry comes from — their backyards.
Medina, Ohio, consumer Ed Hoegler, who is also a chef, doesn’t raise chickens, but prefers refrigerated chicken because he says it tastes better than frozen. For that reason, Hoegler buys from a local brand — Gerber’s Amish Farm — because it looks better and has a better color, he says. Occasionally, Hoegler will buy frozen chicken from Tyson or Perdue Farms because it’s cheaper and he believes in the quality of their brands.
“I trust Tyson and Perdue because chicken is their business,” Hoegler says.
The second reason that consumers buy local is to support the local community, Tristano says. The third reason is to reduce the nation’s carbon footprint.
“With the [struggling economy], I think a number of consumers are feeling more strongly about their local economy and how it has impacted their family, friends and relatives, and the fact that buying local will have a positive impact on the community,” Tristano says.
Hoegler, who lives in a town of about 27,000, is willing to buy local to keep the money in the community. He also believes local meat is better tasting, but not because it might be organic.
“I’m not into organic,” Hoegler says. “I think the studies are inconclusive as to whether or not the nutritional value is better.”
A small percentage of consumers prefer to buy local because they believe that local meat and poultry is produced using less energy, Tristano says.
Grundhofer says consumers don’t know as much about product origination as they think they do. For instance, a customer once told him that he wanted to buy organic beef. When Grundhofer told the customer he could sell him beef that was raised with no antibiotics and no hormones but that it was fed on high-moisture corn, the customer said he would take it.
“But it wasn’t organic beef that I was selling him,” Grundhofer adds. “The high-moisture corn was treated with pesticides.”
The cost factor
Locally grown food is also perceived to be more expensive, which is often the case. As many consumers are watching their budgets because of the economy, they are looking for good deals on meat and poultry products, which they can find from the larger packers and processors, says Mike Martin, director of communications for Cargill’s US Animal Protein Business. But if others can afford locally raised meat and poultry products, more power to them, Martin says.
“If people can afford to purchase these foods that typically tend to cost more because they are from a smaller volume and in some cases have higher input costs, they have the right to do so,” Martin says. “That’s their decision, and we respect it.”
Hoegler will buy local products that are of good quality and competitively priced. “But sometimes those two things don’t always line up,” he says.
But Hoegler knows other consumers are willing to pay more. He says chefs who operate their own restaurants like to sell locally raised meat and poultry because they have sellable products with higher price points.
“It also gives them a higher cost which equates to a higher check average, which they’re driving for,” Hoegler adds.
Often, consumers have no idea how much locally grown meat and poultry can cost, especially if it’s raised naturally. Grundhofer says some of his customers request natural beef, which Grundhofer doesn’t carry because of its high cost. Even if they want it, Grundhofer says most people won’t pay $23 a lb. for an all-natural rib eye.
Tristano says consumers expect suppliers or retailers to bear the added cost of production for farm-raised and natural products. “And that’s where there’s a disconnect,” he adds.
Product recalls have helped fuel the locally grown food movement. In the wake of the lean finely textured beef issue and other negative reports involving big packers and processors, have consumers become less trusting of such companies and their production methods?
“You would have to ask consumers,” Martin says.
Prime-time media and social media fueled the “pink slime” controversy involving Beef Products Inc. and other processors, including Cargill. Unfortunately, they inaccurately portrayed that LFTB was treated with ammonia and served to school kids for lunch, Martin says.
“That was a hard message to overcome,” he adds. “Facts and science were trumped by perceptions and emotion in the court of public opinion. It speaks to the fact that there’s probably a lot of confusion in the consumer world and … people are having a hard time wading through it and determining what’s fact and what’s fiction.”
But, fact or fiction, what happened with LFTB helped the locally grown food movement. Grundhofer says the controversy helped increase his ground beef sales 20 percent. Grundhofer’s ground beef comes from heel meat, which he says produces a low-fat product with good body and low bacteria.
Hoegler buys 85-15 lean ground beef, and says he’s not concerned where it comes from. He says disease outbreaks are bound to happen on occasion, considering how much food is passed around from day to day.
“The beef industry is heavily regulated, but sometimes things will happen,” he says. “I trust the big beef packers, professionally and personally.”
Grundhofer believes the locavore food movement will grow.
“The biggest thing is that people want to know where [meat and poultry] come from,” he adds. “But it’s not just [meat and poultry]; people also want to know where the vegetables they eat come from.”
Martin says there’s a place in the market for locally raised protein.
“But will [these products] replace the large-scale production that feeds the vast majority of Americans? We’re certainly not seeing that,” he adds.
Martin says that any product that builds positive awareness for a category tends to grow that category.
“But at the end of the day, whether it’s organic, grass-fed or locally produced, one has to make more money than it costs to produce it or else it’s not sustainable,” Martin says.
Hoegler predicts the locally grown food movement will get bigger but eventually plateau.
“[The] small companies will never overtake the big boys,” Hoegler says. “They can’t because then [those suppliers] become what they don’t want to be.”
The perception that locally grown food is superior could create a food class system that could lead to food elitism, Hoegler believes.
“If you buy chicken breast for $1.99 a lb., will there be a stigma because you’re being more frugal?” Hoegler asks.
Martin points out that Cargill began as a single grain elevator in rural Iowa in 1865 before growing and prospering into the giant company it has become.
“Just because an organization becomes bigger and more efficient, doesn’t mean it’s less desirable,” Martin says. “There are a number of consumers brands out there that have proven that.”
Larry Aylward is a longtime contributing editor to M&P, based in Cleveland, Ohio.