Before taking the bold leap of starting a new meat processing company, most stakeholders who’ve “been there, done that,” would likely recommend that entrepreneurs do exhaustive due diligence and take advantage of the resources available to ensure they are committing to the venture with wide-open eyes.
Academic programs, such as The Ohio State University’s (OSU) Meat Science Extension service, are just one of many sources of information for those exploring the possibility of a meat processing startup. OSU offers an online business toolkit, which includes questionnaires and a range of considerations as resources designed to help entrepreneurs in the decision-making processes before taking the leap of faith to start any of several startup scenarios.
South Dakota State University’s meat science extension specialists also offer step-by-step initial measures to consider as guidelines for aspiring meat processing plant operators. SDSU Extension regularly offers cohort programs to provide immersive, year-long networking experiences for new and current livestock producers or processors to give them information and resources that they need to survive and thrive in their ventures.
Additional academic resources with tools to give meat entrepreneurs an advantage by offering outreach programs include: Montana State University, Colorado State University, University of Idaho, Washington State University, University of Wisconsin-River Falls, Cornell University, Iowa State University, Texas A&M University and others.
Outreach experts
Funneling the academic expertise of these institutions and more, the Niche Meat Processor Assistance Network (NMPAN), based at Oregon State University, is billed as an extension-based community focused on helping small meat processors thrive by offering tools and technical guidance to processors, farmers and marketers.
David Zarling, NMPAN program director said working with smaller meat processing entrepreneurs at any stage of their business lifecycle, from startup to longtime family-owned operations is the bread and butter of the organization. With a background in meat plant operations, Zarling works with processors on issues that include quality control, operational efficiencies, food safety, humane handling and leadership development.
Zarling’s counterpart at NMPAN is Rebecca Thistlethwaite, who has served as director of the organization since 2019, having worked as program director the previous three years. She brought a background in ranching to the role, as the former co-owner of a California-based pasture-raised poultry and livestock operation in addition to being an author of books focused on sustainable farming and ethical meat production. Thistlethwaite’s perspective helps processors navigate bigger-picture issues in their businesses, including supply-chain planning, marketing and business development.
The outreach program offers resources across numerous categories of companies, including those that are existing meat processing companies seeking opportunities to scale their business, companies that are facing financial challenges, livestock producers with aspirations of processing and selling their brand of products directly to consumers or via wholesale and even small, regional stakeholders of CPG brands hoping to grow their market share. NMPAN offers peer-to-peer consulting, educational opportunities in both short course formats, more in-depth long courses and educational boot camps designed for small processors, producers and meat brands.
“We also offer a couple of mastermind programs, where we work alongside processors in a cohort environment, getting our hands dirty and looking at real-life situations,” Zarling said.
Source: Northwoods Group LLCGrant aid
Currently, and for most of 2023, NMPAN’s attention has been drawn toward the Meat and Poultry Processing Capacity Technical Assistance (MPPTA) program, which is comprised of officials from the US Department of Agriculture’s Agricultural Marketing Service (AMS), the American Association of Meat Processors (AAMP) and NMPAN. This program is designed to provide consulting and guidance to current or aspiring processors that are applying for any of the federal grant programs, to ensure they are following the best path and ensure they are as competitive as possible in being considered for the financial awards that are being doled out at an increasing pace. It is a free resource that is currently very popular due to the many federal programs that have been launched by the government to bolster opportunities for small businesses.
“We have operations experts, grant-writing experts, financial experts, business planners; people with different expertise that they can book time with to make their grant [campaign] more competitive, and it’s basically unlimited,” Zarling said.
Somewhat related to the MPPTA program, a common category of entrepreneurs NMPAN works with are cattle ranchers seeking to grow their operations via integration. The typical inquiry comes from producers who want to start their own direct-to-consumer or wholesale business. They want to understand, ‘how do we do this?’
Others, said Zarling, are startups that have recently begun selling to consumers and experience a rude awakening.
“Maybe they’ve started and they’re realizing, ‘Marketing isn’t just as easy as getting on Facebook. Sales aren’t as easy as just sticking a sign out at the end of the road anymore.’”
The typical company type NMPAN works with are meat processors with anywhere from 20 and 50 employees, companies of which have survived the startup pains, but are established and facing new challenges.
“Maybe the ownership has changed hands; maybe someone has purchased a company that’s been in business for a long time; maybe they’re going from custom exemption to [federal] inspection.
“Usually there’s some reason why they’re making a leap,” Zarling said, which could mean the company is considering investing in modernizing its plant, becoming more profitable or in some cases, coping with a labor challenge.
“Whether it’s workforce, whether it’s operations, whether it’s sales or financial viability, they come to us for those resources. And we either have an off-the-shelf solution or we have an upcoming course or we have an expert that we can pair them with to get those answers.”
Reality check
Lately, many livestock production operators come to NMPAN with questions about how they can add meat processing to their portfolio, but often the answers to those questions aren’t what they want to hear. This has become an increasingly common request.
“There are a lot of livestock producers that are in for a rude awakening in the next three to five years,” Zarling said. “Many are of the mentality that ‘it’s just cutting meat. What’s the big deal?’”
The fatal flaw in that thinking is in approaching a meat processing operation as just a side hustle.
He said that often, aspiring entrepreneurs don’t realize that meat cutting and meat processing is a manufacturing-based business.
“Manufacturing is a science; it’s not farm work. And to be a profitable enterprise of any size you need to treat it as a manufacturing operation and implement those best practices, regardless of scale, regardless of if you only have three employees — you still need to treat it like a manufacturing facility.”
In those scenarios, Zarling said, NMPAN focuses on being the voice of reality to those whose hopes and dreams might cloud good business decisions.
Source: ©Rawpixel.com - STOCK.ADOBE.COMFamily dynamics
Family-owned-and-operated companies present a whole other set of dynamics when it comes to surviving or thriving as a meat processing company.
Zarling said family-owned businesses might consult NMPAN for a variety of reasons, including succession planning and exploring options for passing the torch to the next generation or options if there is nobody in the family interested in taking that torch. Other challenges family businesses navigate involve failing to achieve some predetermined metric for success and the stakeholders get to the point where the blood, sweat and tears are simply not worth it and perhaps there is no exit strategy. In those cases, owners are often willing to cash out and sell for pennies on the dollar.
“They’re exhausted. It has affected their relationships and more, and they just want to be done,” he said.
The common denominator in these scenarios, he added, is usually a case of a family owner or owners devoting all of their time and energy working extremely hard in the business but not on the business. Times have changed and continue changing, and some companies aren’t equipped to survive in today’s business climate.
“We don’t just have person-to-person freezer beef sales the way that we used to for these smaller processors,” said Zarling. “I think that there’s a certain level of financial hygiene and acumen [required] and a lot of folks maybe didn’t have access to the resources that it would take to be viable today and it just ran out of steam.”
In some family businesses, family members opt to first work outside the company in an unrelated field and come back home later in life to join the business. In those cases, they’re coming to NMPAN asking, “‘The business world outside of small agriculture functions this way. We want to bring some of these principles in, but how do we do that?’” Zarling said.
Bright ideas
Regardless of an entrepreneur’s background and even when they hear what sounds like a viable and promising business idea, Zarling said he and Thistlethwaite make every effort to not squash dreams but encourage them to pause and look at all the possibilities.
“I see it all the time: ‘I’m an entrepreneur and now I’m going to get into the meat industry and we’re going to knock this out of the park.’
“Rebecca and I tend to try to tell them to pump the brakes,” Zarling said.
Instead, the team encourages aspiring startups to first identify who their target market is, which includes recognizing the labor pool available and if there are enough people to work for the company.
A common refrain, Zarling said is “‘We’re just going to hire migrants.’ And that doesn’t make any sense, and that’s not going to happen; it’s not reality, so you really need to identify the target markets and one of the markets are the employees.”
He says early-stage planning can be enhanced by enlisting the expertise not only of NMPAN and other university outreach programs but advisors like Kitchen Table Consulting LLC, Bala Cynwyd, Pa., which “helps farmers, artisans and food system businesses build lasting, profitable locally focused operations.”
