Could Local Meat Processors Be the Next Craft Breweries?

By
Zacary Smucker-Bryan
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America’s meat industry is a lot like how beer was in the 1980s, with a handful of giant corporations controlling the lion’s share of the market. That’s how Rod Ofte of Nordik Meats describes it in the latest Edible-Alpha® podcast. Four decades ago, Anheuser Busch, Miller and Coors were the undisputed beer kings. Similarly, today, JBS, Smithfield, Tyson, Cargill and National Beef sell the overwhelming majority of the protein in the U.S.

But neither industry started out that way. Once upon a time, “every little town used to have a butcher—and every little town used to have a brewery,” Rod explains. Consolidation and monopolization overtook both markets over time, forcing most local meat processors and breweries out of business.

But then the craft beer revolution happened. Over the last few decades, we’ve seen microbreweries pop up nationwide. It started slowly, but as more consumers discovered they prefer craft beer over Budweiser and began championing locally brewed, the pace of openings accelerated. Now, as Big Beer’s market share dwindles, it seems we’re back to every little town boasting a brewery and larger towns having several.

Could the same phenomenon happen with meat? That’s Rod’s dream—for the market to shift back to allowing mom-and-pop processors to thrive. He acknowledges that meat processing facilities face bigger hurdles than craft breweries, which are much cheaper to build, not as heavily regulated and fun destinations to visit. Yet he insists meat could undergo a similar transformation—“if consumers insist that their meat doesn’t travel thousands of miles.”

Will they, though? Sure, some consumers already choose locally raised and processed meat, but will demand ever reach critical mass?

It’s certainly possible, especially now that the COVID-19 pandemic has exposed the ugly realities of the meat industry. Last year’s sparse meat counters and coronavirus-riddled meatpacking plants opened people’s eyes like never before, and interest in locally produced and direct-to-consumer meat skyrocketed. Small-scale ranchers and processors nationwide reported unprecedented sales spikes while struggling to keep up with demand.

Although some consumers have resumed buying commodity meats in the waning days of the pandemic, many have not. There is still significant interest in meat that’s both raised and processed locally—and there is still a shortage of local facilities to handle it all.

Logically, heightened demand should beget new processing operations—just like craft beer craze spawned more craft breweries. But as we’ve discussed throughout our meat-focused podcast mini-series, meat processing is a tricky, costly and barrier-filled business, both to break into and make work financially. In the past, these factors have precluded many otherwise-interested parties from making a go at it.

However, over the last year, state departments of agriculture report an uptick in inquiries from people wanting to start meat plants. Meanwhile, legislative changes are opening more opportunities for existing and prospective local meat processors. For example, Wyoming passed a law last year allowing ranchers to sell meat direct to consumers without needing USDA-inspected slaughter. Iowa launched the Meat Processing Expansion and Development Program with $2 million in CARES Act funding.

At the federal level, USDA’s Cooperative Interstate Shipping Program—which allows some state-inspected plants to operate as federally inspected facilities that can ship products from state to state and internationally—just expanded to include a ninth state, South Dakota, last week. Additionally, the bipartisan Strengthening Local Processing Act was reintroduced in Congress this past February. If passed and signed into law, it would provide training, education and technical assistance to help develop and streamline small meat and poultry processing plants. It would also allow state-inspected meat products to be sold across state lines without USDA inspections.

While nobody knows what the future holds, the combination of surging consumer interest, a promising market opportunity, more readily available funds and more workable regulations may provide enough incentive and support for small processors to effect real change in the meat industry. Maybe we’re on the cusp of every little town having both a brewery and a butcher.

Wisconsin grass-fed beef producer and business consultant Rod Ofte helped launch Nordik Meats last summer, just as COVID-19 was ramping up and demand for local meat processing intensified. He joins Tera to share his experience starting the small plant during such a crazy time, explain its sustainable business model, discuss the issues facing meat processing and offer advice for other entrepreneurs in this space.

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