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Image credit: Wholesome Meats

Mooove it or lose it: Why Soilworks launched its own regenerative beef brand

September 17, 2020

Texan VC Soilworks hit the ground running when it debuted in June with its acquisition of Pasture Map. Co-founders Lew Moorman and Ed Byrne don’t show any signs of stopping.

The San Antonio-based, regenerative ag-focused firm recently unveiled its own ‘regenerative beef’ company called Wholesome Meats that provides ground beef to restaurants and grocery retailers throughout the Lone Star State. 

“The number one feedback we got from farmers was we need the customer to know about these techniques, we need the demand to happen, and we didn’t see much happening,” Moorman tells AFN.

A number of companies have created online direct-to-consumer meat purchasing platforms in the US like Butcher Box, Primal Pastures, and Moink. Recently launched Blue Nest Beef has also thrown its hat in the regenerative ring by partnering with the conservation-centric National Audubon Society to produce what it describes as “bird-friendly beef.” Although Wholesome Meats offers direct-to-consumer sales through its website, Soilworks believes consumers will continue to do the majority of their shopping at the supermarket.

When Soilworks looked around the supermarket, the only section that didn’t have premium-branded, pasture-raised products was the meat counter, Moorman says. From cheese to dairy to eggs, consumers now have a wide variety of options when it comes to premium goods produced according to specific agricultural practices, such as grazing animals on pasture rather than feeding them in confinement.

In order for regenerative ag to scale, he continues, consumer demand has to increase. One of the biggest challenges it has faced is educating consumers about what ‘regenerative’ means and the benefits that it has to offer. The grass-fed movement has helped pave the way for more complex discussions about how ruminant animals can offer more than just meat; they can also come with benefits in terms of ecosystem rehabilitation and management. 

Part of the reason Wholesome Meats opted for restaurant and supermarket sales was due to the brand recognition opportunity these channels afford. It chose to start out with ground beef because of the greater consistency it offers compared to muscle cuts – and after noting that many beef producers have more trouble selling ground compared to steaks and roasts.

Scaling is another big challenge. That’s down to the unique aspects of finishing cattle on grass alone, as opposed to feeding them grains and other agricultural byproducts. In a feedlot, young cattle can be finished on grain in a few months, whereas grass-finished animals usually require 24 to 30 months before they’re ready to be processed. And without grain as the equalizer, there is more variability in the resulting taste, texture, and carcass weight. While some consumers will welcome this variability, others may perceive it as an inconsistency in the product. 

“If we ended up in Walmart nationwide tomorrow, we couldn’t supply it,” Moorman concedes. “But we feel like we can grow from Texas, and Pasture Map has provided us with a database of regenerative cattle producers that will help us expand state to state. We hope to tap into that and see if we can build relationships.”

Then there’s processing. Tackling the many problems that plague livestock producers at this stage of the supply chain is a high priority item for Soilworks. It’s interested in decentralized processing systems in lieu of existing large-scale plants that primarily process beef for large meatpacking companies.

For small and medium-sized ranchers who sell direct-to-consumer, processing also tends to add substantial costs to their margins.

“One of the ways we are going to get cost down is by figuring out processing,” Moorman says.

“I think there is a role for mobile processing. I don’t know if that will be part of the Wholesome Meats business or whether Soilworks will invest in another model for processing. But this is absolutely forcing us to figure it out.”

Competing with the plant-based protein movement

Wholesome also has to compete with plant-based protein, which has centered much of its marketing and branding around climate and other environmental impacts of cattle.

For his part, Moorman is outspoken about what he views as the negative effects of the plant-based protein industry, describing its approach as “misguided.”

“I think feedlots are bad, but cows are needed,” he says. “I view plant-based producers as feedlots, meaning a model based on crops filled with chemicals and fertilizer. Nitrous oxide is much worse for the environment than methane, and lasts in the atmosphere a lot longer. They’re destroying more soil and making our problems worse.”

Less discussed than carbon dioxide, nitrous oxide’s concentration in the atmosphere has increased in recent decades due in large part to an increase in the use of synthetic fertilizer. Moorman also claims that plant-based proteins are highly processed and suggests that the science behind the health claims made about them is becoming outdated.

“Margarine was created because we thought saturated fat was bad for you. Now, what are we all doing? Going back to real butter because we realized that those natural saturated fats, particularly with grass-fed cows, are extremely healthy for you,” he claims.

“Cows are the most efficient protein-creating machines on the planet, while helping to create healthy grasslands and soils.”

Among consumers, however, plant-based products are resonating. About half of consumers report consuming more plant-based foods because it makes them feel healthier, according to a study by DuPont Nutrition & Biosciences. Growth of plant-based protein sales is projected to increase from $4.6 billion in 2018 to a staggering $85 billion in 2030, based on data from investment firm UBS.

Investors are showing a strong appetite for innovative food ingredients, too. Startups in the segment, which includes cultured meat, novel ingredients, and plant-based proteins, raised $1 billion last year according to AgFunder’s 2019 Agrifoodtech Investing Report, doubling its total dollars raised in 2018. It raised even more in the first half of this year alone.

Still, Moorman is undeterred. 

“I think we should check in after a few months. We’ll have a lot of bruises and our packaging might be different, our words might be different, but we’re gonna go out there and try to figure out how to do it.”

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