April 30, 2014
For most people, age 72 – or even younger – would seem like a good time to retire. In fact, most people today retire in their mid-60s, and quite a few at a lot younger age.
But not Eldon Roth. Roth, who’s just turned 72, and his wife, Regina, founders of Beef Products Inc. (BPI), have no intention of retiring anytime soon. The rest of their family, all co-owners of the company, have no plans to go anywhere either – far from it. For one thing, Eldon and Regina Roth have no desire to take it easy. And for another, they have a big job ahead of them – bringing the business back to where it was, or even beyond that. Right now they’re on the way to doing just that.
Two years ago, the Dakota Dunes, SD-based company was operating four ultra-modern plants in Nebraska, Texas, Kansas and Iowa. It was the nation’s top manufacturer of “lean finely textured beef” (LFTB) which is a low-fat meat product coming from beef and trimmings. Like many other food products, it was treated with very small amounts of ammonium hydroxide to destroy pathogens that might be there. The meat product was used in fast-food restaurants, school lunches and other at-home beef products.
But during the past two years, the company’s annual revenues dropped from $650 million to $130 million. Sales declined from 5 million lbs. of LFTB to 2 million lbs. per week. The only plant now in operation is in South Sioux City, Neb.; the other three are closed for the time being. More than 700 employees have lost their jobs. Blame is put on an ABC News report two years ago that called the LFTB product “pink slime.” Last year, the company filed a $1.2 billion lawsuit against the network and three reporters, including Diane Sawyer, for knowingly and intentionally publishing false and disparaging statements regarding BPI, including BPI Technology Inc. and Freezing Machines Inc., regarding its product, LFTB.
BPI alleges that ABC and others have launched a concerted disinformation campaign against the companies, which had a significant adverse effect on BPI’s reputation, as well as a significant negative financial impact on the companies. The case has turned into one of the biggest defamation lawsuits in American history. In fact, it’s the latest battle between American agriculture and the increasing number of critics of how farming, meat processing and other agribusiness is carried out in this country. After the case is finally settled, the mainstream media’s coverage of LFTB will be scrutinized and debated for years to come and will likely not be the last case of its kind.
And while the lawsuit is an important issue to the company, Roth has other important issues on his mind – like getting BPI beyond where it was financially two years ago. “We think we will re-open these three other facilities,” Roth says. “We belong to industry trade associations, and they’ve been very helpful to us. But I’m a very strong believer that when you own and run a company, when you’re in business, you have to help yourself.”
One way Roth believes that can be done is to be as honest with people as he can, even people who don’t have your best interests at heart. “We’ve had a very open door ever since I started BPI, and that’s not changing now,” he says. “We’ve been very open and honest with consumer advocacy groups, for example. We’ve brought them into the plant to see what we do – also we’ve brought academics in, meat scientists and microbiologists.”
Roth and his wife began Beef Products Inc. 34 years ago in the San Francisco Bay Area. But Roth had grown up on a farm near Dimick, SD.
Roth just didn’t jump into the meat-processing business. His father also had a processed cream business in the early 1960s in California that processed milk into Grade A or Grade B product, depending on whether the eventual product was butter, cheese or milk. Roth did that for a while, too, including operating his own ice-cream plant in the Bay Area. He then started his own machinery company and refrigeration businesses.
“That’s how I got into the meat business. I worked for meat companies by setting up refrigeration operations for them, mostly around San Francisco. I set up freezing machinery – freezing machines,” he says.
But the big breakthrough for Roth came when he figured out how to take raw beef materials that were full of fat, and de-fat it into lean ground beef. In essence, he’s spent the last 30 years reinventing the way lean ground meat is separated from fatty beef and pork trimmings. And while some people say Roth has a genius for invention, the man himself is much more modest. “I’m not an inventor,” he says flatly. “I have no education, I didn’t go to college. I’m not an engineer by any means. I am able to innovate things – take something that’s already been invented, and maybe improve on it, make it better.”
He was able to create a business adding lean meat that had been defatted from beef and trimmings to ground beef, especially for fast-food restaurants and QSRs. Roth and BPI also created a grinding system that stabilizes the knife pressure for meat processing. By using a minimum knife pressure on the meat, the system produces the same meat results all day long.
Birth of a business
That was the birth of BPI, a business he soon moved back to his native South Dakota, in part because the Midwest and Prairie were becoming the headquarters of the huge consolidations going on in the beef industry. And this process that separates lean meat from fat was used when the company began. “The process was already out there and we made improvements to it. The trimmings go through a specially designed centrifuge. It spins at high speeds to separate heavier materials, like lean beef, from lighter materials, like fat. Once the fat is removed, the beef from these trimmings is 95-percent lean. That’s how BPI began and it continues to this day,” Roth says.
In addition to developing the grinders that do the work of separating the lean meat, Roth also developed frozen technology for his products. This technology includes roller-press freezers that convert meat from a hot 105° F to hard frozen chips of meat in only a few seconds. The quick freezing locks in both the meat’s flavor and moisture.
Roth came up with boneless lean beef when he was helping small plants with refrigeration. “They didn’t have access to trimmings, and I saw how I could improve the existing technologies. Not by myself, you understand. There were a number of people involved in my company helping me with this.”
In order for Roth to perfect his formula, it was important to start with good raw product. “The raw product is very important when making this lean finely textured beef. That’s why we went to the big packers for our material, only USDA establishments. I knew I could get lean beef there.” Roth also knew consumers wanted leaner beef, going from 73-percent lean to 90-percent lean. “So, being able to change, adapt to what people want, is very important.”
Roth explains lean finely textured beef. It is basically lean beef trimmed from sirloins, ribeyes and other whole-muscle cuts of beef. No organs, tendons, bones or filler are used. “It’s simply starting with beef trimmings, then taking the fat out of it,” he says. “It is very lean meat, typically 93- to 97- percent lean. Mixing with other whole-muscle cuts of beef creates the wide variety of ground beef lean points you can find on grocery store shelves, from 73/27 to 93/7. This makes ground beef more affordable and available.
“A little ammonium hydroxide is added, which is the best food-safety processing aid there is, and which is used in many foods, including many baked goods. As far as USDA is concerned, it’s just ground beef.
“We are putting LFTB on the package as information to consumers, but not on the label, it doesn’t have to be there because ground beef is a single-ingredient product – beef – and LFTB is 100-percent beef. We believe USDA’s decision to allow companies to voluntarily include information in their packaging regarding LFTB content is an important step in restoring consumer confidence in their ground beef,” Roth notes.
“We start with beef trimmings 50-percent lean or less, we centrifuge it to separate the lean meat from the fat. The process is very similar to what a dairy does when it is separating cream or fat from milk,” he adds.
Roth further emphasizes the safety of the product. “LFTB is 100-percent beef and all beef is strictly regulated and inspected by the US Dept. of Agriculture,” he explains. “USDA’s Food Safety and Inspection Service makes sure it is wholesome, unadulterated and correctly labeled and packaged.”
Roth also points to the fact that experts, including university professors of food safety, microbiologists, animal scientists and others, have reaffirmed the wholesomeness and safety of LFTB. “Many meat scientists, academics, food and safety experts, government officials and consumer-advocacy organizations have spoken on behalf of the food-safety record and quality of LFTB.”
Factors for success
But there is more to success than the technical aspects of operating a business or even the product produced itself. Roth points to four success factors in his business – or any business. “You have to be able to communicate. You must be able to cooperate. You must be dedicated to what you’re doing. And you must be committed to doing it.”
He’s very optimistic about the future of BPI – his business is coming back. “Our business bottomed out in 2012. But the demand for our product is growing again and continues to grow. We’re getting into more of the market.”
And he has a simple philosophy based to a great degree on how he was brought up by his family. “I grew up in poverty, like a lot of people did – and like a lot of people still do today. But that’s not what determines how your life will evolve,” he says.
“You see, I had wonderful parents, and I knew they cared for me and about me very much. But do you know what was the biggest thing they did for me and my eight siblings, all who became successful? They gave all of us responsibility at an early age. Thanks to that, we’d all be able to take care of ourselves and eventually be successful.”
Bernard Shire is M&P’s Washington correspondent contributing editor based in Lancaster, Pa. He also works as a food safety consultant and writer for Shire & Associates LLC.