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KANSAS CITY, Mo. – Grass-fed beef commands premium prices, but Dana Ehrlich, co-founder and CEO of Verde Farms believes his company can bring grass-fed beef to within the financial reach of more consumers; and he’s leading the charge to “democratize” grass-fed beef by expanding his company’s product lineup to include more moderately priced cuts of beef.
Founded in 2005, Woburn, Massachusetts-based Verde Farms is a leading supplier of pasture-raised, grass-fed beef for both retail and foodservice customers. The company leverages a network of family farms in Uruguay, Australia, the United States and Canada that raise cattle without growth hormones and while adhering to humane animal welfare standards.
In September, the company launched Never Ever and Grass-Fed beef product lines. Verde Farms Never Ever meats are sourced from pasture-raised cattle that were not placed in feedlots and never treated with growth hormones or antibiotics. The company’s Grass-Fed products include beef sourced from cattle that have received antibiotics only when necessary to treat a specific condition.
Verde Farms counts Wegmans Food Markets and Whole Foods Market Inc. and other national retailers as customers for the company’s organic, grass-fed beef line.
“As we progressed, we noticed that there was a big gap between the conventional and grain-finished beef — where the cattle are finished in feedlots — and our organic grass-fed beef,” Ehrlich said.
For example, the difference in commodity retail beef prices and grass-fed retail beef prices in September were as low as $2.22 for short ribs to a high of $21.43 for filet mignon, according to the US Dept. of Agriculture’s National Monthly Grass Fed Beef Report.
To address the price premium, Verde Farms developed its Grass-Fed line as an entry-level grass-fed program for foodservice and retail customers, while the Never-Ever line is a middle-range program within the grass-fed sector. Verde Farms also offers a Reserve line, which is a steak-house quality, 100-percent grass-fed, grass-finished line. Ehrlich believes the premium between commodity beef and grass-fed beef will narrow over time.
“Grass-fed beef doesn’t have the corn-based subsidies that are so predominant within the feedlot-based system,” he said. “So, overtime there probably will be some premium, even at the entry-level grass-fed program. But as we scale up and we use the economies of scale that the rest of the sector uses we can pass on those cost savings to the consumers.
“So our entry-level grass-fed price point, while above conventional (beef) is still accessible to the vast majority of Americans,” he added. “Then, there are other things that we can do such as distribution. The wider our footprint gets on distribution the more accessible not just within the Northeast, mid-Atlantic and West Coast, but throughout the middle parts of America.”
The company sources predominantly Hereford and Angus breeds of cattle. Live weights are between 1,100 lbs. to 1,200 lbs., and weights vary by season. The meat is typically leaner compared to grain-finished beef, but Ehrlich said leanness is an attribute that goes well with the consumer who’s looking for healthier product.
“Ground beef leads the category regardless of the tier within grass-fed, but Verde Farms is well-balanced by using the whole carcass,” he said. “So, that means using everything from your middle-meats to end cuts to ground beef.” Ehrlich added that Verde Farms currently is engaged in some value-added beef production and the company will focus on that segment going forward.
Verde Farms relies on a network of producers and processors for finished products. The company’s partners are held to rigorous animal welfare and food safety standards, Ehrlich said. For example, all ground beef is subject to test-and-hold.
“We have a stringent set of requirements for folks throughout the supply chain,” Ehrlich explained, “and that goes down to the farm level in terms of animal welfare, raising protocols. We even go so far as not allowing any dairy or tropical breeds into the program to ensure good quality of the meat. We have other requirements such as SQF or BRC certifications of our plants. So, there’s a long list of protocols and certifications that we require of all of our partners within the chain.”
Growing on grass-fed
Ehrlich said all the pieces are in place to scale up the company for the next three years and beyond. The company recently expanded its executive team to include Paul Boulanger as CFO and COO; Joe Koch as vice president of sales; and Pete Lewis as vice president of marketing. Pablo Garbarino, Verde Farms co-founder and Ehrlich’s classmate at Dartmouth, heads operations in South America.
“After 10 years and exponential growth, it was readily apparent that there were only so many hours in the day and so far that I could scale the organization,” Ehrlich said. “I saw a tremendous amount of potential still within the sector, not just for the next year or two but far beyond. It was clear to me that bringing on both very talented individuals that could complement my own skill set with their own knowledge base that they bring as well as just the horsepower to drive the various teams.”
Verde Farms continues on a growth trajectory but not only in sales. The company also relocated to a new space that is double the size of the former office to accommodate the company’s growing staff; foster product development and enhance client services. “Even outside of our senior management team, our employee base has grown considerably over the last few years, and I expect that to increase,” Ehrlich said.
