Before launching into today’s snarky commentary about industry developments, let me confess that I am as guilty as anyone alive of the transgression I’m about to dissect.
Over the years — okay, let’s be honest and call them decades — I’ve written dozens of stories almost exactly like the ones that appeared on several industry-specific websites this week: A recap of well-meaning presentations at some regional conference outlining the challenges facing smaller producers and meat processors.
Only one problem: These stories are long on the analyses of those challenges, but short on practical ways to overcome them.
In this case, the conference was the Ohio Meat Industry Marketing Summit, and the main topic, judging from the reports, was exploring the marketing channels that connect local producers to consumers, grocers and foodservice operators.
According to an article in the Ohio Country Journal, Jamie Graham of R.C. Packing, a custom butcher shop in Bidwell, Ohio, told the audience that, “The locally grown food product (sic) is such a rapidly growing niche market and awareness is needed on both sides of the supply chain. Consumers are more interested in where food comes from and the story behind the farm producing that food.”
He’s right, he’s accurate, and that’s exactly the quote I would have captured had I been one of the reporters attending that summit.
Here’s the problem, as explained in the rest of Mr. Graham’s statement: “The struggles that come with doing what the consumer wants on a small scale include logistics, packaging, facility space, equipment and product development.”
What else is there for any business to confront in terms of accessing any customer base? I guess you might add “marketing, advertising and public relations,” but honestly, those additional “challenges” are rather like the sprinkles on the frosting on the cake.
Indeed, no matter what industry might host a summit on how small businesses access the consumer marketplace, it would be difficult to identify a bigger list of challenges beyond logistics, packaging, facility space, equipment and product development.
Those considerations are the very fundamentals of a business operation, no matter its size or sector. Any one of them represents a significant challenge for a business, no matter its size, no matter its access to capital, no matter the expertise its management might possess.
A Downward Spiral
There are several reasons why smaller producers and processors are facing challenges in the marketplace. One of them is the imposition of food-safety requirements that the same consumer activists who’ve been shouting about the importance of family famers and local processors have long demanded that USDA impose.
The rollout of HACCP alone put thousands — and that’s not an exaggeration — of smaller packing plants and processing facilities out of business, otherwise profitable operations that couldn’t afford to make the necessary changes to their physical plants (the “facility space and equipment” referenced above) or who couldn’t (or wouldn’t) access the resources needed to develop the sophisticated food-safety plans required by the new regulations.
Even larger companies with revenues in the multi-millions disappeared in the wake of mandatory HACCP, either selling out to larger competitors or “merging” with bigger players to avoid getting caught in a product recall or a food-safety incident that could sink the entire ship.
The fallout from the disappearance of hundreds upon hundreds of local and regional meat plants then caused thousands of small-scale producers to exit the business when it no longer became feasible to drive a trailer load of cattle 600 miles to the nearest packing plant still in business.
Which, in turn, put even greater pressure on the remaining small packers to ensure a consistent supply of livestock that would allow them to operate on a predictable schedule and keep a qualified work force on staff.
It’s been the classic case of a vicious circle, and while consumer interest in locally grown food is real and impactful, the bottom line is that access to that segment of the purchasing public requires participants to be equipped with talent, resourcefulness, determination and loads of expertise in the areas of logistics, packaging, facility space, equipment and product development — just to have a shot at gaining a piece of the marketplace.
It’s not like all that is impossible, but for more than a handful of entrepreneurs to succeed in that endeavor it’s going to take a lot more than just talking about the challenges.
It’s going to take a huge public investment in facilities, technology and research — not to mention a massive infusion of private capital.
Anyone planning a conference on how to get all that done, please let me know. I’ll be there in a heartbeat.
The opinions in this commentary are those of Dan Murphy, a veteran journalist and commentator.